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Tamil Nadu ranks third in FDI, favoured destination

S. Vydhianathan

World class facilities attract investors


CHENNAI: Tamil Nadu ranks third in the country in total foreign direct investment (FDI) with Rs. 22,582.64 crores, next only to Maharashtra (Rs. 36,602.41 crores) and Delhi (Rs. 30,303.79 crores). The State's investment constitutes 9.12 per cent of the total FDI in the country.

There is a quantum jump in FDI proposals in the last four years. The total proposals, which were 1,724 in 2000 and worth Rs. 18,940.898 crores, increased to 2,656 (Rs. 22,582.64 crores) by August 2004, according to Statewise details published by the Centre for Monitoring Indian Economy (CMIE) and the Secretariat for Industrial Assistance in the Department of Industrial Policy and Promotion, Union Ministry of Commerce and Industry.

Tamil Nadu has become a "favoured destination for foreign investors due to availability of world-class facilities" including quality infrastructure, uninterrupted power supply and skilled labour.

In terms of total investment, however, the State ranked sixth for the quarter ended January this year with Orissa, Maharashtra, Andhra Pradesh, Gujarat and Karnataka ahead of it. As on January, the total investment was Rs. 1,40,096 crores — 7.35 per cent of the country's share.

Fall in total investment

Unlike FDI, total investments showed a marked decline over the years. The State, once ranked third in total investments with Rs. 1,57,903 crores in April 2001, fell to the sixth place with 1,40,096 crores in January this year. Official sources attribute the decline to cancellation or completion of some projects.

According to CMIE methodology, total investments included both domestic (both private and public) and foreign investments and investments in the pipeline. CMIE deletes all projects that have been cancelled/stalled and completed. For instance, investments made in the Ford and Hyundai car projects, which have been completed, have not been included.

Similarly, some of the proposed projects such as TIDCO's Naphtha Cracker, the Chennai second international airport and the Cuddalore power project were not included in the total investment as they were either abandoned or stalled.

But in the manufacturing sector, Tamil Nadu occupies the second position, closely followed by Gujarat, Andhra Pradesh, Karnataka and Maharashtra. The investment in Tamil Nadu is about Rs. 45,193 crores .

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