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Jayalalithaa acquittal: verdict lifts investor sentiment in T.N.

AIADMK cadres celebrating near the Poes Garden residence of party chief Jayalalithaa in Chennai on Monday. Photo: B. Jothi Ramalingam  

Tamil Nadu’s industry leaders welcomed the acquittal of AIADMK chief Jayalalithaa in the disproportionate assets case on Monday, hopeful that her return as Chief Minister would help remove investor uncertainty and revive the State’s sluggish economy.

Industry bodies such as the Confederation of Indian Industry (CII), the Madras Chamber of Commerce and the Southern India Chamber of Commerce and Industry welcomed the Karnataka High Court’s verdict.

The industrial climate in the State has been troubled especially since last September, when Ms. Jayalalithaa resigned as Chief Minister after a special court found her guilty of corruption.

The industry has had to face a slew of disappointments, including the postponement twice of the Global Investor Meet and the closure of factories run by Nokia and Foxconn. This at a time when States such as Gujarat, Rajasthan, Telangana and Andhra Pradesh have been making aggressive pitches to attract investors.

B. Santhanam, president and managing director, flat glass, South Asia, Malaysia and Egypt, Saint-Gobain, said, “The industry can now look at accelerated and favourable decisions towards industrial progress. The power situation has improved and the economic signs are good and we [Tamil Nadu] should leverage on this.”

An upcoming event which will be seen as the first test of business sentiment after Ms. Jayalalithaa’s comeback is the Global Investor Meet, scheduled for September after being postponed twice. S.N. Eisenhower, chairman of the CII’s Tamil Nadu State Council, said, “The political uncertainty has been removed. This will pave the way for the Global Investor Meet to be a success.”

Gujarat has used Tamil Nadu’s crippling power shortage to its benefit, wooing potential investors with the promise of uninterrupted power supply.

An analyst, wishing anonymity, pointed out that the power situation continues to be a big challenge. The deficit situation remains but with the southern grid connectivity and improved transmission infrastructure, the State can buy power from other States.

The government’s ambitious solar plan of adding 3,000-megawatt capacity has not taken off.

Industrialists are hoping that Ms. Jayalalithaa’s return will make the process of getting project approvals easier. “We had to wait for weeks to get approvals. It was a three-tier system,” said the chief financial officer of a textile firm, which will be announcing an investment at the investor meet.

Most of the IT parks have been lying idle for years now. “Many IT firms from here are slowly looking at places like Sri City near Tada [in Andhra Pradesh], which is a concern for us. With Andhra Pradesh and Telangana split, many firms are moving away from Tamil Nadu,” said an official from the IT sector.

K. Purushothaman, regional director, Tamil Nadu and Kerala, Nasscom, said, “We expect a more vibrant and dynamic ecosystem from the government which will make the State a number one investment destination in IT and ITES.” Though one of the most industrialised states in the country, Tamil Nadu has in recent years lagged behind the national average in growth. Muted industrial recovery and the poor monsoons have not helped matters.


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