CHENNAI:Not many governments can hope to go into the last year of their tenure boasting of a multi-lakh crore locking in of investment. For Tamil Nadu Chief Minister J Jayalalithaa, this circumstance has come to pass—not due to some fortuitous twist of economic fortune, but because of a year and a half of focused effort. By the time the first-ever Global Investors Meet (GIM) concluded on September 10, a whopping Rs 2,42,160 crore in industrial promises had been put down on paper.
The consequences of this success are likely to be far reaching in both economic and political terms. If all 98 MoUs signed for GIM turn viable and translate into projects—the impact in terms of just employment generation is set to be along the tune of 4.7 lakh—which will add muscle to her re-election campaign. According to industry reports, Tamil Nadu accounted for 15.2 per cent of the total national figure for employment generation in manufacturing in 2012-13 —the highest in the country. Not added to that number is the additional thousands of employment generated by the Rs 16,532 crore investment in small and medium industries.
The Secretary of the Southern Indian Chambers of Commerce and Industry, S Raghavan, pointed out that it wasn’t just the direct investment in micro, small, and medium enterprise (MSME) projects that would contribute but the investment in larger projects that would in turn give rise to even more MSMEs and their own little pockets of employment generation. “This is a cascading effect and it will be hugely beneficial,” said CII-Tamil Nadu’s Chairman S N Eisenhower.
While employment would no doubt have a positive political consequence for Jayalalithaa’s election prospects in 2016, the strongest blow she has dealt her political rivals is in correcting the power crisis in the state. When she inherited the state in 2011, it was in the middle of a power shortage par none. By 2015’s beginning, the state had closed the demand-supply gap for the first time since 2006.
But if GIM showed anything, energy continues to be a priority for the government. The energy sector alone attracted MoUs worth Rs 1.04 lakh crore at the meet—Rs 56,600 crore of that in thermal projects that suffer none of the inadequacies of wind and solar. A very forceful political argument in a state where the power shortage has long been a recurring and influential election issue.
Lastly, the GIM has brought a veritable fount of promised investment to the southern belt which is a traditional fortress for the ruling AIADMK. By locking in Rs 97,181 crore for the southern districts alone, the government had firmly buttressed its political clout in the region. Of the five largest single projects for which MoUs have been signed, four are in this region. Some of the most ignored districts in the state, Ramanadhapuram, Virudhunagar etc, have also seen a series of MoUs signed for varied industries—from energy, IT and electronics to agriculture and aquaponics. IT giant HCL alone is planning to invest Rs 6,000 crore plus in Madurai and Tirunelveli, something that founder Shiv Nadar chose to reveal only at the inaugural event.
All said and done, even discounting the scepticism in some spheres over the actual viability of these MoUs, GIM has been, and is set to be, a tour-de-force for the reigning chief minister. A better springboard for an election campaign, the state has not seen in recent memory.