There has not been much change in the investment climate in the State — which has not seen any big-ticket investment for a few years now — post Jayalalithaa’s death. However, the access to the government has improved and the cloud of uncertainty has lifted, say stakeholders.
In the 2016 ‘Business Reforms Ranking’ released by the Centre’s Department of Industrial Policy and Promotion (DIPP) and the World Bank, Tamil Nadu dropped six places to 18, the lowest among developed States.
In July 2017, the State Investment Potential Index data released by the National Council of Applied Economic Research (NCAER) showed the State slipping by three notches to the sixth position. A report by private research firm Kotak Institutional Equities showed that Tamil Nadu accounted for a mere 2.9% of the total Foreign Direct Investment (FDI) of $44 billion that flowed into India during the 2016 calendar year — the lowest in three years. The State’s manufacturing growth was just 1.65% in 2016-17, according data from the Reserve Bank of India.
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“The State has not attracted big-ticket investments. However, it cannot be blamed for the slump in manufacturing. This has been the case across the country. Even though new investments have not come in, existing investors have not left the State and they have been expanding,” P. Ravichandran, chairman, Confederation of Indian Industry, Tamil Nadu, said. He also pointed out that the State has been working towards improving the investment climate as well as the ease of doing business ranking with the recent launch of a single-window clearance system.
Improved access
“The access to bureaucrats and Ministers have improved. The State is hosting lot of investor shows. The political uncertainty is behind us. The brand-building exercise to offset negative perceptions would be the key,” Mr. Ravichandran said.
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The State has postponed the second edition of the Global Investors’ Meet to next year. In the first edition of the meet in 2015, 92 memorandum of understandings were signed with investment commitments of ₹2.42 lakh crore; the government has said 61 projects are under various stages of implementation and projects worth about ₹30,000 crore have been realised.“The period after Jayalalithaa’s death was disconcerting for business because of the political uncertainty. However, the bureaucracy and the State government have handled the situation well and worked to improve industry confidence,” Ram Venkataramani, president of the Madras Chamber of Commerce and Industry, said.
“Accessibility to all decision makers has been ensured and the political uncertainty seems to be behind us. With the State gearing up to launch the Global Investors’ Meet next year, the investment climate would improve,” he added.
N.K. Ranganath, managing director, Grundfos India, said policy-oriented actions have gained traction in the last three months which is a good sign and efforts like single-window clearance would boost confidence.