The Indian economy has been growing at a faster pace than many developed and developing economies. India has a massive goal of becoming a developed nation by 2050. Ascertaining the current status of economies is crucial for planning. Hence, the document of the Economic Survey report plays a vital role in bringing, a nuanced sectoral analysis that is fully packed with qualitative and quantitative data on the overall Indian economy and the regional economies of states.

The latest economic survey 2024-25 focuses on “Driving domestic growth and resilience through deregulation” and deals with a wide range of segments like enhancing the productivity in agriculture and manufacturing; targeted measures of climate mitigations; decentralised urban governance; environmental protection by blending of technological innovations, MSMEs, etc. There is essential to understand that there is more need for the deregulation of governance itself as centralized governance in a country like India would be inefficient compared to decentralized local governance.

The Survey Report notes, “The demand for state capability and capacity to respond to these developments and make progress on social and economic indicators amidst rising geopolitical conflicts will be unlike anything we have experienced since independence. Meeting that demand is a priority above all else.”

Economic Survey also highlights the best practices, good governance, and innovative initiatives of regional economies of states. This exercise helps for replications by other states and bridge the gaps in welfare efforts to improve the lives of people. This analysis focuses on the case of Tamil Nadu whose many works have been highlighted in the Economic Survey 2024-25 as a success stories.

Good governance at the regional level provides necessary fillip to growth and development of the region. The survey report highlights that “States have also participated in deregulation by reducing compliance burdens and simplifying and digitising processes. States have tried to reduce the cost of regulations by engaging with businesses to identify pain points. For example, Haryana and Tamil Nadu amended their building regulations 12 times in the past decade to make it easier to build”.

In the age of digital revolution, ease of regulations for business operations especially financial operations helps industries to innovate for faster growth of MSMEs. The economic survey highlights that “The Governments of Goa and Tamil Nadu have set an example by adopting the TReDS platform to ensure timely payments to their MSME suppliers. Goa, heavily reliant on tourism, leveraged TReDS during the COVID-19 disruption to enhance supplier liquidity, facilitating payments for over 250 MSMEs since October 2020, with invoice discounts. Tamil Nadu joined TReDS in 2022 under the Raising and Accelerating MSME Performance (RAMP) program, supporting MSMEs in significant numbers. Their proactive adoption has inspired other states to follow suit.”

Share of Value Additions

• Regional economies of states are emerging with competitive edges. About 43% of the total industrial Gross State Value Added (GSVA) during the financial year of 2022-23 at constant 2011-12 prices, comes from just four states such as the western states of Gujarat and Maharashtra and the southern states of Karnataka and Tamil Nadu.
• For the financial year 2022-23, more than one-fourth of the total services sector GSVA comes from Karnataka and Maharashtra. More than 50% of the total service sector GSVA comes from just a few states like Karnataka, Maharashtra, Tamil Nadu, Utter Pradesh, and Gujarat. These states also have more than 50% of the total industrial GSVA, suggesting that both feed into each other.
• Financial, real estate, and professional services have very high levels of concentration in a few states. Within the service sector, financial services are highly concentrated with Maharashtra (Mumbai), Tamil Nadu, Gujarat (GIFT City), and Karnataka accounting for more than 50% of total financial services GSVA. Further, more than one-third of real estate, ownership of dwelling, and professional services value added (GSVA) are from Karnataka, Maharashtra, Telangana, Haryana, and Tamil Nadu.
• Dual strengths–industrial and service: Maharashtra and Tamil Nadu typically represent states with reasonably strong industrial and service sectors. Their diversified economies integrate manufacturing with trade, financial services, real estate, and professional services.

Among the larger states, “Tamil Nadu leads the pack with the highest concentration of factories per person, followed by Gujarat. Bihar hardly has any factories, while Uttar Pradesh hardly has any smaller enterprises.”

The survey highlights Tamil Nadu’s Strategic Initiatives to Foster Footwear Manufacturing Growth. According to the Economic Survey 2024-25, Tamil Nadu is a leader in the traditional leather sector and now championing the growth of non-leather footwear. The state contributes to a 38% share in India’s footwear and leather products output, contributing to about 47% share in India’s total leather export. This sector generates more than 2 lakh employments.

Agriculture and Transforming Rural Economies

• Economic Survey highlights, states have diversified towards crops where yield is high. For example, Andhra Pradesh diversified towards jowar, Madhya Pradesh towards moong, and Tamil Nadu towards maize.
• Diversity is also seen in inter-state variations in growth observed from 2011-12 to 2020-21. Andhra Pradesh was the leading performer with a CAGR of 8.8% in agriculture and allied sectors, excluding forestry and logging. Madhya Pradesh followed with 6.3%, and Tamil Nadu came in third with 4.8% among major states.
• The shift from cultivating traditional flowers to export-focused cut flowers highlights the industry’s transformation. Entrepreneurs across states like Tamil Nadu, Karnataka, Madhya Pradesh, West Bengal, Uttar Pradesh, and Maharashtra have capitalized on this opportunity, establishing sophisticated export-oriented floriculture units.
• The Rise of Horticulture India’s horticulture sector is more productive and profitable than traditional agriculture, emerging as a fast-growing industry. This can be seen from the fact that India is also a leading exporter, shipping 343,982.34 MT of fresh grapes worth Rs.3,460.70 crore (USD 417.07 million) globally in 2023-2410. Key grape-growing states are Maharashtra, Karnataka, Tamil Nadu, and Mizoram. Maharashtra leads in production, contributing over 67% of total output with the highest productivity in 2023-24.
• As referred to in the Economic Survey, the study by Narayanamoorthy et al, (2024) examined the impact of drip irrigation on five horticultural crops—brinjal, tomato, banana, watermelon, and mango—in Tamil Nadu. The study suggested that drip irrigation enhances agricultural outcomes. Compared to flood irrigation, it reduces water consumption by 39-55% and boosts crop yields by 33-41% due to targeted water delivery. This efficiency translates to substantial economic benefits for farmers, with profit margins increasing by 52.92-114.50% depending on the crop (e.g., brinjal, mango).

Education and Skills Development of Students

• Imparting life skills through innovative initiatives like The Tim Tim Tare (TTT) which was first started in Tamil Nadu in 2009. It has now been expanded to many states such as Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, etc. in a phased manner, reaching millions of students across India. In addition to empowering students, TTT has prioritised training thousands of teachers across these states, ensuring that the programme’s benefits are deeply rooted and widely disseminated.
• Tamil Nadu’s Illam Thedi Kalvi (Education at Doorstep) – Innovation in public education: The Tamil Nadu government launched a cost-effective remedial programme to bring education to students’ doorstep to bridge the learning gaps created by the covid 19 pandemic and ensure equity leading to improvements in learning. The State Planning Commission conducted a rapid assessment of the programme’s impact through a comprehensive survey in September 2022. This assessment involved the active participation of volunteers, teachers, headmasters, and parents from 362 schools across six districts: Ariyalur, Cuddalore, Nagapattinam, Salem, Thiruvarur, and Villupuram. Parents reported a noticeable improvement in their children’s learning experiences, noting that education has become a more enjoyable activity for them.

These are some of the key highlights of the latest economic survey 2024-25 with respect to success stories of major sectors in Tamil Nadu state. which is the most urbanized state in the country. However, the state has been facing multiple challenges like poor civic facilities and services, highly controlled urban mobility, degradation of the environment, flood and water-related pollutions, etc., which get less attention from a public policy perspective.

B.Chandrasekaran is an Economist and Founder Chairman of the AgaPuram Policy Research Centre, Erode.

Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.