Saturday, April 23, 2016

Tamil Nadu - What do the numbers say?

With the state election set to take place on May 16, 2016 - election speeches in Tamil Nadu (India) are spiked with rhetoric, lies, and hatred. So, out of curiosity, I collected data to get an objective view of Tamil Nadu's economy.
How well has Tamil Nadu fared in the past 5 years (2011-16)?
TN ranks 8th in Human Development Index (HDI), an index measured on 3 factors - income, education, and health - a reflection of the standard of living. The top 3 are Kerala, Delhi, and HP (Source: Institute of Applied Manpower Research).
In Agriculture, TN was the largest food grain producer in India in 2012, producing 102 lakh metric tonnes. When DMK left, it was 82 LMT. Food grain production reached 128 LMT in 2015 and the government has set an even higher target of 147 LMT for 2016. As per India Today's Best of States report, TN comes next only to Maharashtra in food grain production at 1,626,000 tonnes per sq km.
When it comes to Industrial growth, TN was the 2nd most industrialized state in early 2015 (Source: Business Standard); Maharashtra and Gujarat were at 1st and 3rd positions respectively. In 2014, its growth rate of 3.53% in Manufacturing sector surpassed the national average of 0.71%.
What about debt? With a debt of roughly 211 crores, TN is the 6th largest debtor, next to Maharashtra, UP, WB, AP, and Gujarat. However, debt alone doesn't give the full picture of an economy. If the borrowed debt is put into good investment, it is beneficial. So, a true picture is given by the (Debt / State GDP) ratio; the lower the ratio the better. TN's Debt / GSDP is 20%; lower than national average of 21.2%, indicating that there is economic growth in parallel with rising liability.
So, where did TN under-perform?
Power sector? While the CM announced in mid 2015 that the state had then met its power demand of 13,000 MW per day, it is yet to be widely acknowledged. The Adani group's investment on solar power generation is another ongoing project of interest.
Although the government had the Global Investors meet in 2015 with a lot of fanfare, TN has been slipping down in converting proposed investments to actual investments (Source: TOI, March'16). In 2015, out of 19.5 Crores proposed, only 5.01 Crores materialized (Source: Dep of Industrial Policy & Promotion). There are also complaints of less transparency.
And bad news to manufacturing sector: some companies are moving out of TN and expanding elsewhere, like Ford, ISuzu, and Saint-Gobain.
When Jayalalitha was not the CM (Sep'14 - Apr'15), the state's progress almost stalled. This sort of risk is bad for any investment.
So, the question is: who can perform better than this? 

No matter who you vote for, make sure that your candidate can beat these numbers! At the end of the day, it is numbers that speak the truth.