The Hindu Business Line : TN prefers investments spread across the State

The Tamil Nadu Government is focussed on attracting investments across the State, particularly in the southern districts and especially in areas where there have not been major investments.

Spreading investments is important for even economic development across the State and easing the pressure on resources in specific areas.

According to official sources, as the State attracts increasing industrial investments, making land available in a structured and planned manner is increasingly a challenge. Chennai and Hosur have been the two major destinations of big-ticket investments. The investors’ interest in specific areas has led to a pressure on demand for land in the vicinity of Chennai up to a radius of over 100 km.

For instance, the State Industries Promotion Corporation of Tamil Nadu, which handles allocation of land for industrial use, finds that the proposed 1,000-acre industrial estate at Pillaipakkam, near Sriperumbudur, is fully booked even as it is being set up. There is no land left for further allocation.

The situation is similar across all its industrial estates up to 100 km from Chennai. Whether it is the 1,300-acre Gummidipoondi Estate 45 km to the north of Chennai, or the Irrungattukottai, Oragadam and Sriperumbudur cluster together constituting over 6,000 acres, about 35-60 km west of Chennai or Ranipet about 100 km away, there is no land for allocation in the industrial estate.

The Government is trying to persuade some of the investors to move to one of the southern districts. The reason it has announced additional sops to those planning to set up industrial units in one of the nine southern districts: Madurai, Theni, Dindigul, Sivagangai, Ramanathapuram, Virudhunagar, Tirunelveli, Tuticorin and Kanniyakumari.

While elsewhere in the State a structured investment incentive is on offer to those bringing in more than Rs 250 crore over three years, in the south the incentives are available for investments over Rs 50 crore.

For investments up to Rs 250 crore, depending on the size of investments, the VAT payable for 3-5 years is deferred and treated as a soft loan that can be paid from the eighth year. Those investing more than Rs 250 crore can avail themselves of a facility to pay the VAT spread over a 21-year period instead of taking the soft loan.

It is in the context of bringing in investments to new locations that officials say the proposed investment of Rs 2,512 crore by Cethar Vessels in Tiruchi district is a significant development. The unit for manufacturing industrial boilers and power generation equipment was one of the many projects representing investments of over Rs 9,000 crore approved by the State Cabinet last Saturday.

Officials say that this is one of the largest investments – other than BHEL – in Tiruchi, about 300 km south of Chennai, to happen in the last few decades outside of the traditional destinations of investment like Chennai and Hosur.

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