Economy

New industrial policy puts more districts on investment map, not just Chennai

G Balachandar Chennai | Updated on February 22, 2021 Published on February 22, 2021

Neeraj Mittal, MD & CEO of Guidance Tamil Nadu

Package gives more weightage for investments in southern TN and other industrially backward areas

The new industrial policy of Tamil Nadu government has added more measures and incentives to ensure balanced industrial development across the State, says Neeraj Mittal, MD & CEO of Guidance Tamil Nadu, the State nodal agency for investment promotion.

Apart from being a manufacturing hub for automobiles, chemicals, petrochemicals, food processing and electronics, the State also has a strong base in software and IT services. The manufacturing sector contributes to about 25 per cent to the State economy. Also, in recent years, Tamil Nadu has been attracting investments in new segments – in what are called sunrise sectors.

But, Chennai and its surrounding corridors have always been the preferred destinations for global companies for setting up manufacturing plants due to several advantages.

‘Promoting South’

Despite the measures undertaken by successive governments in the past decade or so, the State has not been successful in diverting some big investments to other areas – particularly industrially-backward southern districts -- in order to ensure inclusive development.

To address this, the Tamil Nadu Industrial Policy 2021, which was unveiled last week, has put in place more attractive sops for investments in regions other than Chennai.

“One of the key objectives of the new industrial policy is to achieve inclusive industrial growth. Of course, investment decisions are taken by the companies based on several factors – not just attractive sops. Some want to stay near cities and some want better air connectivity. A few others look at social infrastructure. But we keep showing the other districts and their advantages to convince investors to go there,” Mittal said.

The team at Guidance has made 50-odd visits to places like Tiruchi and Tuticorin even during the lockdown to promote investments in these locations and work out the incentives.

“There were occasions when people took a call to go to these places. But they later changed their decision to be in Chennai or nearby locations,” said Mittal.

‘Need one big investment’

The State government has introduced a flexible capital subsidy framework in its Tamil Nadu Industrial Policy 2021.

If a company invests ₹1,000 crore, it will get up to ₹400 crore worth of incentives in the best circumstances based on the new package of sops that give more weightage to investments in southern districts and other industrially-backward ones.

“Lands are available in southern districts and private industrial parks are also coming up. Labour is available. Power will not be an issue and port connectivity is there. Only social infrastructure needs to improve. We just need one big-ticket investment to come up in this area as it will completely change the scenario,” he said.

An industry representative said the new Ennore-Tuticorin natural gas pipeline may also make investments attractive for some industries that will use natural gas as feedstock, while port connectivity will be an added advantage.

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Published on February 22, 2021
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