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Resource centre on India's rural distress
 
 

The arithmetic for Tamil Nadu as a $1 trillion economy -C Rangarajan and KR Shanmugam

-The Hindu

Reaching the target by 2030-31 has to be ruled out, as it requires a nominal annual growth rate of 18.2%; instead, the scenario can be 2033-34, with the required real rate of growth at 9%

The Chief Minister of Tamil Nadu has set Tamil Nadu the goal of becoming a trillion dollar economy (by 2030), as he has indicated over the past year. This is a good aspirational goal. Tamil Nadu’s GDP this year is expected to be equivalent to $0.31 trillion. To reach the goal set by the Chief Minister, Tamil Nadu has to triple the size of its economy. If this is the goal, we need to examine what the required annual rate of growth will have to be in conjunction with the period over which this rate should be maintained.

At the outset, the possibility of achieving the status of a trillion dollar economy by 2030-31 has to be ruled out. It requires a nominal annual growth rate of 18.2%, and on the assumption of inflation of 5% a real growth rate of 13.2%. This is not in the realm of possibility. 

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