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On March 13, 2025, the State Planning Commission, in collaboration with the Finance Department and other key departments, presented Tamil Nadu’s inaugural Economic Survey to Chief Minister M.K. Stalin. The Economic Survey for 2024-25 outlines an ambitious economic roadmap for the state.

Key Highlights of the Economic Survey

The survey provides a comprehensive analysis of critical sectors such as agriculture, industry, and services. It outlines medium-term growth prospects and examines employment trends, inflation, and select social sector indicators. Additionally, it reviews government policies, assesses their effectiveness, and forecasts economic growth for 2024-25 and 2025-26. It also suggests corrective measures to address short-term challenges and ensure long-term economic sustainability.

Economic Growth and GDP

Tamil Nadu, despite occupying only 4% of India’s land area and accounting for 6% of its population, contributed 9.21% to the country’s GDP in 2023-24. The state has demonstrated strong economic resilience, maintaining a growth rate of over 8% since 2021-22. The survey projects that Tamil Nadu will sustain this growth trajectory and aims to become a $1 trillion economy by 2030.

In 2023-24, Tamil Nadu’s Gross State Domestic Product (GSDP) at current prices stood at ₹27.22 lakh crore, marking a 13.71% increase from the previous year. The real economic growth rate during this period was 8.23%.

The state’s economic trajectory is more volatile than the national growth pattern due to its strong linkages with global markets. As a major exporter of vehicles, textiles, leather, and IT services, Tamil Nadu’s economy is highly sensitive to international economic fluctuations.

Unlike states such as Maharashtra, Karnataka, and West Bengal, where economic activity is concentrated in single metropolitan centers (Mumbai, Bengaluru, and Kolkata, respectively), Tamil Nadu’s economic growth is distributed across multiple urban centers, including Coimbatore, Madurai, Tirupur, Tiruchirappalli, and Salem. These cities play a crucial role in bridging the urban-rural divide.

The sectoral composition of the state’s Gross State Value Added (GSVA) in 2023-24 was as follows:

Services sector: 53.63%

Industry (secondary) sector: 33.37%

Agriculture (primary) sector: 13%

The survey suggests that increasing the secondary sector’s share by 5% could significantly boost employment opportunities, aligning Tamil Nadu with developed economies.

Per Capita Income

Tamil Nadu’s per capita income in 2022-23 stood at ₹2.78 lakh, which was 1.6 times the national average of ₹1.69 lakh. The state consistently outperforms the national average and ranks fourth in India in terms of per capita income.

Inflation

Price stability is a key objective of monetary policy, although state governments have limited control over it. Tamil Nadu manages inflationary pressures through supply-side interventions, such as the Public Distribution System (PDS). The government also provides: 100 units of free electricity to domestic consumers. ₹1000 per month to 1.15 crore eligible women under the Kalaignar Mahalir Urimai Thittam scheme.

These initiatives not only enhance purchasing power but also help moderate inflation. However, retail sales in Tamil Nadu declined from 6% in 2022-23 to 5.4% in 2023-24 and further to 4.8% in 2024-25 (as of January 2025). Between 2019-20 and 2023-24, Tamil Nadu’s average inflation rate stood at 5.7%, higher than India’s 4.85%. However, since 2020-21, the state’s retail inflation rate has witnessed a decline. In 2023-24, Tamil Nadu recorded the eighth-lowest retail inflation rate among the 20 major Indian states.

Agriculture and Allied Activities

Tamil Nadu’s agriculture sector remains heavily dependent on the monsoon, making it vulnerable to fluctuations that can lead to floods or droughts. Despite these challenges, the sector ranks fifth nationally and contributed ₹1.5 lakh crore (6% of GSVA) in 2023-24.

According to the Agricultural Statistics at a Glance (2024) report: Tamil Nadu is the leading producer of sugarcane, oilseeds, and groundnuts. It ranks second in maize production and third in paddy production.

Industry and Services

Tamil Nadu is a manufacturing hub, accounting for 12.11% of India’s total manufacturing GDP. The state has the highest number of factories in the country. The manufacturing sector recorded a growth rate of 8.33% between 2021-22 and 2023-24.

The services sector, which is diverse and resilient, rebounded strongly from the pandemic. It grew at a rate of 7.97% between 2021-22 and 2023-24. Key service industries such as education, healthcare, finance, tourism, hospitality, and entertainment continue to drive demand and contribute to economic stability.

Path to a $1 Trillion Economy

The Economic Survey outlines Tamil Nadu’s strengths, opportunities, and challenges in its pursuit of a $1 trillion economy. The state’s growth strategy emphasizes industrial expansion, infrastructure development, and digital transformation.

The survey states: “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.” To reach this target, the survey highlights the need for: Sustained public and private investments

A business-friendly regulatory environment

Inclusive growth policies to ensure widespread economic benefits

Conclusion

Tamil Nadu’s first Economic Survey presents a clear roadmap toward achieving a $1 trillion economy. While the vision is well-defined, effective policy implementation will be crucial for success. A business-friendly framework and inclusive growth strategies will be key to realizing the state’s economic aspirations.

Challenges such as inflation, extreme weather events, and supply chain disruptions pose risks to economic growth. However, proactive policymaking and strategic interventions can help mitigate these risks and keep Tamil Nadu on track to achieving its ambitious economic goal.