CHENNAI: Industries Minister TRB Rajaa on Thursday reiterated that the foreign direct investment (FDI) figures alone cannot be used to assess the actual investments flowing into Tamil Nadu, responding to repeated queries from leader of the opposition Edappadi K Palaniswami.
Speaking during the debate on the interim budget, Rajaa said that when a foreign company brings investment into India, the funds are first recorded at the company’s headquarters, which are often located near the national capital or financial hubs such as Delhi, Gurugram, Noida or Mumbai. As a result, FDI data tends to be “skewed” in favour of these locations, even if the actual manufacturing units and industrial operations are set up in other states.
“What matters is not where the investment is recorded, but where it finally materialises as an industry, generates production and creates jobs,” he said, adding that FDI is not an appropriate metric to quantify investments into a state.
Rajaa asserted that a significant share of investments ultimately translates into industrial activity in Tamil Nadu, which he said has emerged as the number one state in manufacturing. He claimed that while India’s growth rate stood at 6.9%, Tamil Nadu had recorded a higher growth rate of 11.19%, attributing this to the “Dravidian Model” of governance. He urged the opposition to refrain from repeatedly citing FDI numbers as the sole indicator of investment performance.