Tamil Nadu’s first Economic Survey indicates State likely to maintain 8%+ growth rate

The first Economic Survey, which was prepared by the State Planning Commission with the Finance Department and several other departments, was handed over to Chief Minister M.K. Stalin on Thursday (March 13, 2025)
| Photo Credit: Special Arrangement

Tamil Nadu’s first Economic Survey 2024-25 has indicated that the State is expected to maintain a growth rate of above 8% in 2024-25. “The global economy posted a real growth rate of 3.33% in 2023. India’s economy recorded 7.61% growth in 2022-23, 9.19% in 2023-24, and 6.48% in 2024-25. Building on a strong foundation of inclusive policies, Tamil Nadu has demonstrated remarkable economic resilience, consistently achieving growth rates of 8% or more since 2021-22,” the report said.

The survey also pointed out that Tamil Nadu’s per capita income growth has consistently outpaced the national average over the years. In 2022-23, it was ₹2.78 lakh — 1.64 times the national average of ₹1.69 lakh. This makes Tamil Nadu the fourth-largest State in per capita income. The State’s per capita income is significantly above the national average.

Read highlights of Tamil Nadu’s Economic Survey here.

The first Economic Survey, which was prepared by the State Planning Commission with the Finance Department and several other departments, was handed over to Chief Minister M.K. Stalin on Thursday (March 13, 2025). The survey provides a detailed analysis into key sectors such as agriculture, industry, and services. The survey examines trends in inflation, employment, and select social sector indicators, along with the medium-term growth outlook. It also addresses the challenges highlighted above, analysing their impact across various chapters. Additionally, it outlines government policies, assesses their effectiveness, and presents growth prospects for 2024-25 and 2025-26, suggesting remedial measures to address short-term challenges and support sustained economic growth.

‘Union govt. limiting State’s growth’

J. Jeyaranjan, Executive Vice Chairman of the State Planning Commission, in his foreword, mentioned that ever since the new government took over the reigns of governance in May 2021, it has taken the State through successive years of high economic growth, overcoming the onslaught of the pandemic in 2020 and 2021 and the natural disasters of cyclone and flooding in the three years thereafter. “The Union government has not been cooperative in sharing financial resources that Tamil Nadu deserves, and limiting its growth through policy compulsions like NEET, NEP 2020, and fiscal caps on borrowings to name a few,” he mentioned.

The survey highlighted that Tamil Nadu’s progressive social policies, robust infrastructure facilities, and large skilled labour force have enabled the State to place itself on an elevated economic development trajectory. With just 4% of India’s land area and 6% of the country’s population, Tamil Nadu contributed 9.21% to the national GDP in 2023-24. Its Gross State Domestic Product (GSDP) at current prices reached ₹27.22 lakh crore in 2023-24, posting a nominal growth rate of 13.71% and a real growth rate of 8.33%.

‘Even distribution of growth’

According to the survey, unlike States like Maharashtra, Karnataka, or West Bengal, where economic activity is concentrated around a single metropolitan hub, Tamil Nadu’s economic development is more evenly distributed across multiple urban centers. Cities like Coimbatore, Madurai, Tirupur, Tiruchirappalli, and Salem contribute significantly to the State’s economy, helping bridge the urban-rural divide.

For instance, the northern zone, with 31.8% of the State’s population, contributes the highest share of GSDP at 36.6%. The western zone, accounting for 22.8% of the population, generates 29.6% of the GSDP. In contrast, the southern zone holds a 20.5% population share but contributes 18.8% to the GSDP, while the eastern zone, with 25.5% of the population, has the lowest GSDP share at 15.1%.

Road map to $1 trillion economy

After the DMK government came to power, Mr. Stalin had said that Tamil Nadu would become a $1 trillion economy by 2030. To achieve the $1 trillion milestone, Tamil Nadu will need to sustain an annual growth rate of over 12%, driven by industrial expansion, infrastructure development, and digital transformation, the economic survey mentioned.

As of 2023-24, the State’s GSDP stood at ₹27.22 lakh crore, registering a real economic growth rate of 8.23%. “Achieving this target will require sustained public and private investments, enhanced ease of doing business, and inclusive growth strategies that ensure all regions of the State benefit from economic expansion,” the survey said.

It also said that Tamil Nadu needs to concentrate on developing rural entrepreneurship to spread growth across all the districts of the State. “The State should leverage its demographic advantage by increasing the skill endowment of the youth, encouraging women to participate in the workforce, and promoting high-value manufacturing and services, including frontier technologies,” the report said.