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Tamil Nadu can reach a nominal GSDP (gross state domestic product) of $2.6 trillion by 2047. The State grew at an average of 11 per cent annually for 10 years till the pandemic year. At this growth rate, the State could reach the above size. However, the State requires an additional capital investment of $111 billion over the next 24 years to reach the $2.6 trillion size, according to a report by Knight Frank India and CREDAI Tamil Nadu.
Tamil Nadu stands as the second-largest State economy in India, contributing 8.8 per cent to the nation’s GDP. In FY2023, the State GDP is estimated to have expanded to $294 billion (at current prices).
Over the 10 years before the onset of the Covid-19 pandemic (FY2009-2019), Tamil Nadu’s economy experienced an average annual growth rate of 11 per cent. At this pace of growth, by FY2047-48, when India attains its centenary of independence, Tamil Nadu’s GSDP is likely to expand to $2.6 trillion, making the State one of the key contributors to India’s overall economy, it added.
To meet the economic aspirations, it is important for State infrastructure to set the stage for future development. Currently, Tamil Nadu’s connectivity network includes 73,187 km of road network, multiple ports, and airports.
Currently, the State government of Tamil Nadu has been allocating 4.8 per cent of its GSDP towards Capital expenditure, which largely includes allocation towards infrastructure development in the sState (At a national level, the Indian government allocated 61 per cent of its capital expenditure towards infrastructure development in FY2022-23).
It is essential to enhance the allocation of capital expenditure to 5.7 per cent of the GSDP. Over the cumulative period spanning from FY2025-48, the state should undertake a total capex of $111 billion, it added.
Shishir Baijal, Chairman and Managing Director - Knight Frank India, real state consultants, said Tamil Nadu is a powerhouse in India’s economic landscape, known for its resilience and innovative spirit. From manufacturing to services, the various sectors driving Tamil Nadu’s economy highlight the importance of a comprehensive growth strategy.
“To realise its potential, the State must strategically invest in industrialisation and urbanisation and an additional capital investment of $111 billion during 2025-48 will facilitate the envisioned economic growth across sectors including real estate,” he added.
Agriculture, services, manufacturing, and others play crucial roles in driving the State’s economic prosperity. At present, the services sector stands out as the primary catalyst, contributing 53 per cent to the overall economic growth of Tamil Nadu.
Services and agriculture sectors are expected to expand to $1,417 billion (or 165 trillion) and $56 billion (or ₹8 trillion), respectively by FY2047-48.
The manufacturing sector, which accounts for 19 per cent of the State’s economy, is expected to expand to $374 billion by FY2048. To cater to the expansion of the manufacturing sector in the State, there would be a requirement of 2,25,728 hectares (557,786 acres) of industrial land in Tamil Nadu. As of 2021, Tamil Nadu has 19,520 ha (48235 acres) of industrial land.
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