2.14.

Industries
Industries-Medium & Large
Tamil Nadu is one of the well-developed states in terms of
industrial development. It has enjoyed a significant position in India's
geopolitical space and economic progress. Logistical advantages due
to presence of three major seaports, an international airport and
several domestic airports, quality of human resources, a peaceful
industrial climate and a positive work culture have added value to
Tamil Nadu's standing in the industrial world. The State’s business-
friendly policies and proactive initiatives have played a key role in this
resurgence. The State has a diversified industrial profile in the
manufacturing sector. Even before the liberalisation wave hit Indian
shores, Tamil Nadu had established itself on the industrial map of
India as a hub for Automobile and Auto components, Textile, Leather,
Cement, Sugar and Engineering industries which contribute
significantly to the State’s output. In the post-liberalisation era, the
State has witnessed a significant growth not only in the automobile
sector but also in new knowledge-based industries such as
Information Technology (IT), Information Technology Enabled Services
(ITES) and Biotechnology. The State has emerged as one of the front-
runners in attracting a large amount of domestic and foreign
investments in all these areas.

New Industrial Policy

While the State Government is keen on optimising the
State's competitiveness in these new growth sectors, the Government
is also determined to ensure the revival of the traditional industrial
sectors with a declared vision to make Tamil Nadu a regional gateway
to Asia and a top-ranking exporter of manufactured goods. The focus
of the State policy has been to facilitate and incentivising large mother
industries to locate within Tamil Nadu. Balanced development of both
traditional and modern industries is emphasized in the new industrial
policy. In the traditional industrial sector, promotion of SEZs for
footwear and leather processing, agro-processing and export of agro-
products and establishment of co-generation Plants and ethanol units
in sugar mills are some of the initiatives stated in the new industrial
policy. Promotion of industries in high-tech areas like semiconductor,
electronic hardware and nanotechnology are given high priority in the
policy statement.

Foreign Direct Investment

Foreign Direct Investment has had a direct and positive
impact on industrial growth of the State. Long gestation projects for
the strengthening, modernising and reinforcing of infrastructure
facilities such as highways connecting airports and sea ports,
railways, IT Expressways and communication facilities are the
preferred targets for attracting Foreign Direct Investment. The
proactive transparent policy, availability of world class infrastructure,
conducive industrial atmosphere and abundant supply of skilled and
technical manpower have enabled the State to be one of the fore-
runners in attracting Foreign Direct Investment into projects which
play a major role in overall industrial growth.

Between August 1991 and March 2006, totally 2758

projects have been proposed for the State comprising of 631 technical
and 2127 financial projects. The total FDI approval for the state
during the reference period was Rs.23094 crore, which accounts for
8.86 per cent of the total amount of Rs.260596 crore proposed at the
national level. In terms of amount of FDI approval, the State ranks
third, next only to Maharashtra and Delhi.

The major industries in Tamil Nadu are Sugar, Fertilizer,

Cement, Paper and Automobile Industries.

Overview of State Public Sector Enterprises

The State Public Sector Undertakings (SPSU) have been
engaged in providing industrial infrastructure, financial services,
manufacturing and mining etc. apart from playing a significant role in
providing the basic services like water supply, transport and
electricity. There are 47 SPSUs functioning in the state. The major
ones are Tamil Nadu Newsprint and Papers Limited (TNPL), Tamil
Nadu Minerals Ltd., (TAMIN), Tamil Nadu Tea Plantation Corporation
Ltd. (TANTEA), Tamil Nadu Industrial Investment Corporation Ltd.
(TIIC), Electronics Corporation of Tamil Nadu Ltd. (ELCOT), Tamil
Nadu Industrial Guidance and Export Promotion Bureau (Guidance
Bureau), etc.

The State-owned Corporations have been entrusted with the

task of developing infrastructure and providing institutional, financial
escort support to boost industrial growth of the State. The activities of
the major Corporations are given below.

Promotional Agencies – Tamil Nadu

Sl. No. Agency Main Objectives Activities
1. SIPCOT Promote medium and As on 31.3.06, SIPCOT has
large scale industries acquired 22072 acres of land
through developing, out of which 9622 acres have
marketing and been allotted to 1410
maintaining industrial industrial units. It has
complexes, parks and developed 17 industrial
growth centres and complexes/parks/growth
implementing centres in 12 districts.
infrastructure
development schemes.

2. TIDCO Promoting Infrastructure TIDEL Park – Chennai East

Projects Coast Road – Chennai
IT Express way- Chennai
Naagarjuna Oil Corporation –
Cuddalore
Mahindra World City –
Chengalpattu
Ennore SIA Multi Product,
SPECIAL INDUSTRIAL AREA
(SIA) in Hosur and
Denkanikottai
Hi-Tech Industrial Park,
Nanguneri are some
prestigious infrastructure
projects of TIDCO

3. TANSIDCO 1.Promotes SSI Units So far SIDCO has developed

by establishing Industrial 43 Industrial Estates
Estates besides managing 35
Government Industrial
Estates on agency terms.
2.Distribution of Raw It distributes raw-materials
materials to SSI units such as iron
and steel & potassium
chlorate and paper.
3. Marketing Assistance It assists SSI units to market
their products.
4.Strengthening and Infrastructure Upgradation
Developing at Hosur Industrial Estate,
Infrastructure for Ambattur Industrial Estate &
 4. TIIC Promoting Small Scale Total disbursement is Rs.
Industries through 247.34 crore out of loan
financial assistance sanctioned Rs. 350.30 crore
during 2005-06. Share of
disbursement of SSI sector is
95.35 per cent. Textile
industry has the largest
share of Rs.88.60 crore and
engineering industry
Rs.82.22 crore. Expected
direct employment to 15461
persons. Cumulative
sanction as on 31.3.06 is
Rs.5082.45 crore.

1. Major investment projects of TIDCO

Tamil Nadu Industrial Development Corporation (TIDCO)
promotes large and medium scale industries in Tamil Nadu through
new joint venture projects in the manufacturing sector. With the
liberalization of industrial licensing and controls, TIDCO has shifted
more towards infrastructure projects. It promotes Special Industrial
Areas (SIA) and Agricultural Export zones (AEZ) through joint
ventures.

The Government of India is planning to establish Petroleum,

Chemicals & Petroleum, Chemicals and Petrochemicals Investment
Regions (PCPIR) in the country. A detailed report on two sites in Tamil
Nadu has been submitted to Government of India. The PCPIR as and
when it is established would attract investments in the Petroleum and
Petrochemicals sector upto about Rs. 15,000 crore.

To augment the oil refining capacity of the State, Nagarjuna

Oil Corporation Ltd. (NOCL), a joint venture of TIDCO & Nagarjuna
Group is constructing a 60 lakh tonnes per year capacity of petroleum
refinery project in Cuddalore district with a total investment of Rs.
4790 crore. This is the single largest joint venture investment first in
the State.

Tamil Nadu Iron Ore Mining Corporation Limited (TIMCO) is

implementing Iron Ore Mining, Beneficiation and Pelletisation projects
at a cost of Rs. 400 crore at Kanjamalai in Salem District and
Kauthimalai/Vediappanmalai in Thiruvannamalai District.
 TIDCO is implementing various investment projects in the
year 2007-08 with an estimated outlay of Rs. 107.60 crore. In the year
2008-09, TIDCO proposes to invest a sum of Rs. 5.00 crore.

2. Modernization of Co-operative Sugar Mills

Though Co-operative and Public Sector Sugar Mills
expanded their capacity, modernization could not been undertaken
subsequently due to poor financial position. Further most of the mills
are more than 25 years old and have to be modernized in order to
achieve better recovery and better sugar quality. This will enable the
mills to get increased realization so that they can pay the cane price to
the growers within the stipulated period. In the year 2007-08 a sum of
Rs.1.07 crore was allocated for modernisation of the sugar industries
and the same is under progress. During the year 2008-09 also it is
proposed to undertake modernization work in Sugar Industries to the
tune of Rs. 1.36 crore.

3. Capital Subsidy to Mega Industries

TIIC provides financial assistance by way of term loans for
purchase of land, Plant and machinery and construction of building
for new industrial units as well as for expansion / modernization /
diversification of the existing units including to the service sector. It
also operates the National Equity Fund (NEF) Scheme and the
Technology Upgradation Fund (TUF) scheme as well as various
subsidy schemes for the benefit of entrepreneurs to reduce their
financial burden in setting up industries and undertaking expansion /
modernization of the existing units. TIIC is also implementing the
Back Ended Interest Subsidy Assistance Scheme of the state in the
following items: a) term loans obtained for technology up gradation /
modernization, b) term loans obtained under National Equity Fund
Scheme; and c) term loans obtained for ISO certification and Research
& Development. A maximum of 3% reduction in interest rate is given
as back ended interest subsidy against benchmarked interest rates.
 During the year 2007-08 a sum of Rs.5.00 crore was
allocated for this purpose. Out of this, a sum of Rs.1.00 crore is
anticipated to be disbursed by way of subsidy.

4. Capital Projects of Tamil Nadu Newsprint and Papers Limited

(TNPL)
TNPL is producing newsprint and printing and writing paper
using Bagasse as the primary raw material. It has already undertaken
a major expansion scheme with the financial resources from issue of
equity shares and loan from financial institutions and World Bank.

TNPL is also taking major initiatives in the area of non-

conventional energy. It has set up a 15 MW wind farm at Devarkulam
and Perungudi in Tirunelveli District at a cost of Rs.47.69 crore. TNPL
is implementing a Mill Development Plan at a capital outlay of Rs.5.00
crore to achieve further excellence in the environmental standards
and to improve the Company’s competitive edge in quality and cost of
production.

5. Assistance to Guidance Bureau

The functions of the Guidance Bureau are to attract
industrial projects and promote investments in Tamil Nadu, to
function as Single Window documentation Centre for major
investment proposals, provide comprehensive information support to
investors about federal and State Government policies, infrastructure
support, taxation, investment opportunities, etc and monitor
implementation of Foreign Investment proposals proposed by FIPB,
Government of India.

Guidance Bureau also assists in investment promotion

campaigns conducted in key locations in India and abroad. It also
serves as a nodal agency for the ASIDE programme of the Government
of India for funding infrastructure projects for export projects or
zones. Currently, the Special Industrial Area (SIA) Scheme is also
monitored and supported by GUIDANCE, which also assists the
Government in assessing Special Industrial Area proposals before
being sent to the Government of India.

Information Technology
Tamil Nadu is emerging as a hub for software, hardware and
R&D. The number of Indian and Multinational Companies (MNCs)
who have established their presence in TN is a testimony to this. IT
exports from the State are rising exponentially and have crossed the
USD 3 Billion mark in the year 2006. The thrust of the State in the
11th Plan period is to sustain this momentum and emerge as the most
favoured destination for ICT investments. The basic objectives of
Information Technology for Tamil Nadu are: a) To establish Tamil
Nadu as an Information and Communication Technology (ICT) hub of
South Asia by creating a knowledge driven ecosystem, leveraging
entrepreneurship and promoting socially inclusive growth to achieve a
25% production share of the Indian ICT industry. b) To develop a
culture of entrepreneurship and create business-friendly environment
in the State by focusing on nurturing talent among the students, c) To
upgrade the ICT infrastructure in the State, so that the benefits of
development of ICT is enjoyed by everyone in the State, d)To improve
the existing strength of the State like good human resources, presence
of R & D, manufacturing and software development activities, better
infrastructure and pro-active Government, and focusing on building a
sustainable eco system.

Tamil Nadu was the first state in India to announce an IT

Policy in the year 1997, which was instrumental in bringing the
Information Technology revolution to Tamil Nadu. Tamil Nadu has
witnessed substantial growth in IT, ITES, BPO and IT Hardware
manufacturing sectors in the past few years. The Software exports
from Tamil Nadu had touched Rs.14,115 crore during 2005-06. The
depth and range of the IT sector can be gauged from the wide based
portfolio of its export basket - Application Software and System
Software (70%); IT Enabled Services (ITES) and Business Process
Outsourcing (BPO) (13%); Communication Software, VLSI Design and
Web Solutions (8%); IT Consultancy (6%) and Product
Development (3%).

The number of Software Units in the State is also growing

rapidly. So far 1437 Software units have established their facilities.
The rapid rise in the number of national and international players
that have chosen to establish their business establishments and
manufacturing facilities as well as the expansion of the activities of
the established firms in this State is a firm indication that Tamil Nadu
has emerged as a preferred destination for domestic as well as foreign
direct investment. Leaders in the Indian IT sector like Tata
Consultancy Services (TCS), Infosys, Wipro, Satyam, HCL, Patni
Computers, I-Flex, Polaris and Hexaware as well as a galaxy of
international majors - Accenture, Verizon, Xansa, Office Tiger,
Standard Chartered Bank, ABN Amro, Alcatel, Cognizant Technology
have established their operations in Tamil Nadu. To add to the
leadership role that the State has in the Software sector, large
international Hardware manufacturers like NOKIA, Foxcon,
Flextronics and Motorola have already located their facilities in Tamil
Nadu.

E-Governance for a Smart Society

a) Tamil Nadu State Wide Area Network (TNSWAN)
Tamil Nadu State-Wide Area Network (TNSWAN) is a project
jointly implemented by the Government of Tamil Nadu and the
Government of India aimed at providing broadband connectivity of
minimum 2 Mbps linking State Headquarters at Chennai with all the
30 District Headquarters. The project will also link Districts
Headquarters to the Divisional Headquarters, Taluk Headquarters and
Block Headquarters. The Project is in an advanced state of completion
and is expected to be commissioned by June 2007. Tamil Nadu is
among the very few States in India that will have this advanced
facility.
b) State Data Centre
A model State Data Centre is being set up in Chennai with
assistance from the Government of India. The establishment of this
key infrastructure will give a big boost to the implementation of e-
Governance projects in the State. The cost of this unique project
including infrastructure and operating costs will be Rs.9 crore during
the Plan period.

c) Disaster Recovery Centre

A Disaster Recovery and Business Continuity Centre is
proposed at Madurai. This is an essential infrastructure for
maintaining a data back up for computer based data in the event of a
disaster or any other eventuality.

d) Citizen Service Centres (CSCs)

In order to empower the people in the rural areas and to
bridge the digital divide, a programme for rural service delivery
through Common Services Centres is being under taken with
assistance from the Government of India. 5440 CSCs are proposed to
be set up on a Public-Private Partnership mode. These CSCs will
enable the common man to access a large number of Government as
well as private services through the computer at his doorstep.

National e-Governance Programme (NeGP)

Tamil Nadu Government is committed to implement e-
Governance in all sectors of the Government. 15 Mission Mode
Projects have been selected under the National e-Governance Plan
(NeGP) in Tamil Nadu such as Land Records, Commercial Taxes,
Registration, Agriculture, Food and Civil Supplies, Health,
Panchayats, Education, Treasuries, Municipalities, Transport,
Employment, Industries, Social Welfare, Secretariat Computerisation.

Detailed Project Reports (DPR) have been formulated for all

the above Projects. The Government proposes to hasten
implementation of the Mission Mode Projects under the National e-
Governance Plan (NeGP).
Capacity building within the Government at all levels
A scheme to enhance the capacity of Government servants
for the implementation of the e-governance projects has been
submitted to the Government of India. The Government have proposed
formation of e-Governance Training Centre at Chennai. The
maintenance and conducting of training to Government employees
and officials requires funds, for which an allocation of Rs.0.65 crore is
sought for in the Plan. As a first step, the Government will take steps
to build skills and manage change in order to make e-Governance
sustainable.

Government IT Parks
a) Chennai
A world-class IT facility is being promoted on a joint venture
basis at Taramani in Chennai. The estimated cost of the project is
Rs. 850 crore. It is expected that work on this project will commence
in mid-2007 and will be completed in early 2009. Another project to
develop an IT-ITES Park with an Integrated International Convention
Centre is also being Planned in Taramani, Chennai. The project is
estimated to cost Rs. 800 crore. It is expected to go on stream in
January 2009. An IT-ITES SIA developed by ELCOT at Sholinganallur
near Chennai is also fast taking shape with large IT Companies
commencing construction. Similarly, the IT Park at Siruseri on the
outskirts of Chennai, developed by SIPCOT is developing at a fast
pace. 62 large and medium sized IT-ITES companies are putting up
their facilities at this IT Park. In addition to these, an integrated IT
Township spread over 213 acres consisting of IT Buildings as well as
Housing and Social amenities will be established on a Public-Private
Participation (PPP) mode at Sholinganallur-Perumbakkam Villages in
Kancheepuram district, which is on the outskirts of Chennai.

b) IT Park in Coimbatore
An IT-ITES Special Industrial Area (SIA)measuring 29.08
acres has been established at Coimbatore. An extent of 10 acres in
this SIA has been allotted to Ms. WIPRO Ltd. for establishment of an
IT facility. Similarly, an extent of 5 acres has been allotted to Ms. TCS
Ltd. In the remaining extent, ELCOT and TIDCO (two Public Sector
Undertakings of the Government of Tamil Nadu) are jointly putting up
an IT Building. The work on this project has commenced and will be
ready by early 2009. This Park has been expanded by an additional
32.51 acres of land. An integrated IT campus consisting of IT
Buildings as well as Housing and Social amenities will be established
on a Public- Private Participation (PPP) mode in a part of the land at
this site.

c) IT Parks in Madurai
Two IT-ITES Parks are being established at Madurai, one
near Tiruchy, one in Salem and the last one in Tirunelveli. A portion
of the land in these parks will be converted as an integrated IT
complex consisting of IT buildings as well as housing and social
amenities, established on a Public-Private Participation (PPP) mode.
The remaining land will be allotted to IT-ITES companies who would
like to establish their own campuses.

The Government of Tamil Nadu proposes to constitute a task

force comprising representatives from industry, government and
industry experts to develop a comprehensive ICT branding and
promotion strategy for Tamil Nadu. This would also develop a regional
growth strategy for all regions of Tamil Nadu and identify ways and
means of promoting Tier 2 and 3 towns. The State will develop a time
bound action Plan for implementing this strategy and allocate
appropriate resources for implementing this Plan.

Tamil Virtual University

The Government of Tamil Nadu for providing Internet based
educational resources established the Tamil Virtual University (TVU).
It renders services not only for Tamil speaking communities living in
different parts of the globe but also for others interested in learning
Tamil and acquiring knowledge of the history, art, literature and
culture of the Tamils.

The Tamil Virtual University offers web based academic

programmes leading to award of Certificates and Degrees in Tamil,
through its various study centers located in different countries. It
offers Certificate Courses in three levels - Basic, Intermediate and
Advanced and B.A. Programme in Tamil. The Post Graduate
Programme M.A. (Tamil) has been proposed by the Tamil University
and the lesson writing is in progress. Tamil Virtual University has also
signed a Memorandum of Collaboration with Indira Gandhi National
Open University (IGNOU) for sharing their education resources for the
students of TVU. Their resources will be used for the optional
Language (English, Part – II) of B.A Degree Programme.

The Teaching/Learning methodology adopted for the

Academic Programme is E-learning through Internet based lessons
with multimedia support. A Virtual Class Room with video
conferencing equipments along with a streaming server and high
speed internet connectivity have been established in TVU for this
purpose.

The TVU has a Digital Library comprising of a rich collection

of Tamil Literature and also provides a view window into the culture,
history and heritage of the Tamils. The literature content includes
more than 300 Tamil books. It has also got Video clippings on folk
arts, architecture etc. Thirty Glossaries in different disciplines are also
available with more than 2,00,000 technical terms.

Scheme to provide free Colour Television sets

A unique scheme of free distribution of Colour Television
sets to the households not having Colour Television Sets was
commenced on 15th September 2006. A Committee of Legislators
comprising representatives of political parties represented in the
Legislative Assembly has been formed to ensure transparency in
procurement and proper distribution of Colour Television sets. The
procurement of 30,000 Colour Television Sets through National
Competitive Bidding in the first phase and 25 lakh Colour Television
Sets through International Competitive Bidding in the second phase
was done under the direct supervision and guidance of this
Committee. In the first phase, 30,000 Colour TV sets were procured
and distributed. The second Phase of free distribution of 25,00,000
Colour Television Sets was launched by the Hon’ble Chief Minister
on15.2.2007. The Government of Tamil Nadu proposes to continue
this scheme till all families not owning a Colour TV set are covered.

Plan outlay for 2008-09

An outlay of Rs. 311.53 crore has been approved for Large &
Medium Industries (inclusive of Information Technology) for the year
2008-09. Of this, an amount of Rs.225 crore is earmarked for
Scheduled Caste Sub Plan (SCSP).