With just over six months to go for her current term, Tamil Nadu chief minister J Jayalalithaa pulled off a stunning global investors summit recently, attracting a massive Rs 2.6 lakh crore in investment commitments.
The figure is double the amount the state was expecting to garner.
The chief minister and her ‘babus’ were happy with the turnout of domestic and foreign investors. Their strategy of roping in local industrialists and businessmen to sell Tamil Nadu as an investment destination in south India had paid off, at least in terms of the pledges.
Indeed, the global meet has brought investor focus back on Tamil Nadu at a critical juncture. It had recently begun to losing out to other states for an assortment of reasons, including power shortages and difficulty in doing business, a fact highlighted in the latest World Bank report that put Tamil Nadu at number 12 among states in ease of doing business.
Tamil Nadu’s woes were compounded by the perception that the government was missing in action for close to a year when CM Jayalalithaa was fighting a corruption case in the courts. Worse, standby chief minister O Panneerselvam (OPS) was seen as merely keeping the seat warm for ‘Amma’, while governance suffered from paralysis.
“Nothing is happening in secretariat,” was the common refrain of industrialists and businessmen in the days when OPS was running the show -- perhaps one reason why automobile major Ford shifted to Gujarat for expansion of its capacity.
Jayalalithaa’s return to power may slowly reverse that trend. With the much-touted single-window clearance as the buzzword, she has promised project clearance within a month and elimination of bureaucratic hurdles for investors.
Still, Jayalalithaa needs to do more. “There is a single window system in the state, but one major problem we face is of accessibility to the decision-maker,” said an investor who didn’t want to be named. He was clearly alluding to the near impossibility of getting an audience with the CM.
Contrast this with neighbouring Andhra Pradesh, where chief minister N Chandrababu Naidu regularly invites investors for breakfast meetings.
Yet, Tamil Nadu’s old-timers are upbeat. The TVS Group’s Venu Srinivasan, a doyen among the local industrialists, was confident of the state’s potential as it had good physical infrastructure and human capital.
Another son of the soil, Shiv Nadar of HCL, who promised to invest Rs 6,000 crore now and another $1 billion in five years, said Tamil Nadu was the brain centre for his company with half of its employee strength located in the state.
Ganapati Ramachandran, who runs a global IT company, said the meet was a good start, but investor sentiment could have lifted further if someone like Bill Gates was also invited. Besides, he pointed out that holding the meet at the fag end of her tenure did not increase investor confidence, “even if the chief minister is the most popular one”.
On the positive side, Tamil Nadu was the destination of choice for the powerful Adani group. “We are now investing in a port and non-renewable power projects (thermal) and are looking at investing around Rs 15,000-Rs 20,000 crore in the state,” said group head Gautam Adani.
Others like Dalip Sharma, MD of Delta India Electronics, felt that “Tamil Nadu made sense as there was easy availability of engineering talent, power for industry and an investor-friendly government”.
ITC chairman YC Deveshwar summed up the sentiment of the investing community thus: “Investing in Tamil Nadu is both a matter of the heart and the head.”