11. ECONOMIC SURVEY 2025-26: TAMIL NADU’s Industrial and Reform Leadership

The Economic Survey of India (2025-26) recognizes Tamil Nadu as a cornerstone of India’s macroeconomic resilience. Amidst global geopolitical fragmentation, the State has emerged as a high-performing \'industry-first\' economy, transitioning from traditional sectors like textiles to high-tech manufacturing and green energy. This growth is anchored in a unique blend of structural reforms, infrastructure development, and social equity. • Exponential Economic Growth: Tamil Nadu recorded a real GSDP growth of 11.19% in 2024-25, making it the fastest-growing large state economy in India. This performance is primarily spearheaded by a robust secondary sector, which grew by 13.43%, with manufacturing alone recording a staggering 14.74% growth—triple the national average. • National Leader in Employment: The State contributes 15% of India’s total manufacturing employment, the highest in the country, surpassing industrial giants like Gujarat (13%) and Maharashtra (13%). This is attributed to a high density of large-scale units and superior labor productivity. • Export and Cluster Excellence: Merchandise exports nearly doubled from $26.15 billion (2020-21) to $52.07 billion (2024-25). The Survey highlights the Sriperumbudur electronics cluster and the autocomponent ecosystem as global benchmarks for successful industrial policy and cluster-led development. • Pioneer in Green Economy: Tamil Nadu is central to India’s National Green Hydrogen Mission, with V.O. Chidambaranar Port (Thoothukudi) designated as one of only three national green hydrogen hubs. The State also leads in environmental monitoring through proactive common effluent treatment plants (CETPs) for textile and tannery clusters.• Social and Urban Innovation: The Survey lauds the \'Thozhi Hostels\' (Working Women’s Hostels) as a national blueprint for increasing women\'s workforce participation. Additionally, Chennai’s Metropolitan Area Parking Policy 2025 and the state’s dominance in higher education (17 institutions in NIRF Top 100) underscore its urban and human capital strengths. • Inclusive and Resilient Governance: Initiatives like the Climate Resilient Villages and the Blue Economy Project (TN-SHORE) demonstrate how climate adaptation is being institutionalized at the grassroots level, protecting the state’s 1,076 km coastline while supporting local livelihoods. CONSTITUTIONAL AND LEGAL PROVISIONS • Article 246 (Seventh Schedule): While \'Industries\' is primarily a State subject (Entry 24, List II), \'Development of Industries\' declared by Parliament to be of public interest falls under the Union List (Entry 52, List I). Tamil Nadu’s success reflects effective cooperative federalism in these overlapping domains. • Ease of Doing Business (BRAP 2024): Under the Business Reforms Action Plan, Tamil Nadu has implemented digitized single-window clearances, aligning with the Centre\'s vision for a \'National Single Window System.\' • National Green Hydrogen Mission: A policy framework aimed at producing 5 MMT of green hydrogen by 2030, where Tamil Nadu acts as a primary implementation hub. • Section 17 of the MSME Development Act, 2006: Legal framework supporting the growth and recovery of MSMEs, where Tamil Nadu ranks 2nd in national registrations. KEY DEFINITIONS • Real GSDP Growth: The growth in the value of all goods and services produced within a state, adjusted for inflation (calculated at constant prices). • Secondary Sector: The sector of the economy concerned with manufacturing and construction. It is currently the primary engine of Tamil Nadu\'s growth. • Secondary Manufacturing Employment: Employment in organized industrial units; a key indicator of economic formalization and productivity. • GVA (Gross Value Added): The measure of the value of goods and services produced in an area, industry, or sector of an economy. 

COMPARATIVE MANUFACTURING EMPLOYMENT (%)

CONCLUSION The Economic Survey 2025-26 validates Tamil Nadu\'s \'Dravidian Model\' of development, which successfully integrates high-octane industrial growth with social safety nets. By leveraging its skilled manpower and diversifying into medical devices, green hydrogen, and GenAI, the State is not just a regional leader but a vital engine propelling India toward its Viksit Bharat 2047 goals. UPSC RELEVANCE • GS Paper III: Indian Economy (Growth, Planning, and Mobilization of Resources); Industrial Policy; Infrastructure (Energy, Ports, and Urban development). • GS Paper II: Federalism (State-specific economic models); Governance (Ease of doing business reforms); Social Justice (Women’s workforce participation). • Prelims Focus: 16th Finance Commission context; National Green Hydrogen Mission hubs; MSME registration rankings; Export data (Merchandise exports growth); NIRF rankings leadership.