From: Athinarayanan
Sanjeevraja
Date: March 11, 2013
RE: Tamilnadu State Budget FY 2013-2014
Suggestion: Tamilnadu State budget 2013-2014 should
strong focus on manufacturing industry which is vital to the State’s economic
growth and a major generator of jobs, exports and investment.
Good Evening Ms. Chief Minister. As you knew that Tamilnadu has nearly
700,000 registered micro, small and medium enterprises units (MSME), which is the
highest in India. Also, your desire is to see increase in the Manufacturing
Sector’s share in GSDP to 23 percent by 2023 to make Tamilnadu is powerhouse
for manufacturing in India. Also your desire is to make Chennai the world
largest auto hub. If you want to achieve these two, your budget focuses more on
manufacturing. If I am not mistaken, manufacturing sector has contributed
Tamilnadu’s overall economic growth. In my opinion, the health of our state
economy is critically dependent on the health of the manufacturing sector. Global
trade is also based on goods not on services. According to WTO (World Trade
Organisation) 80 percent of world trade is in goods, just 20 percent is in
services. So I request the Tamilnadu government budget 2013-2014 will focus on
supporting both global and domestic manufacturing firms to raise their levels
of productivity, innovation and competitive.
Ms. Chief Minister, in my opinion, Tamilnadu manufacturing policy is
still vain because there is no growth of manufacturing machinery output and
technological improvements in that machinery. These are the main drivers of our
state economic growth. In an effort to revive the manufacturing sector, first, focus on
raising the productivity because a successful and dynamic economy must be
productive. It is not just enough simply to have factories and produce more
goods. We need to make the machinery that makes goods. I suggest Tamilnadu
government should work closely with manufacturing companies to produce high
quality of machineries. For that manufacturing firms are to invest in capital
equipment and R & D. We should ensure that our budget try to reduce the
input costs of power, freight and commodities, create quality of infrastructure
and legal systems and remove barriers to growth for new entrants such as land
use restrictions, licenses, clearances to make the Tamilnadu is the
most attractive place for both global and domestic manufacturing. Besides we
need to revise R & D tax credit to encourage manufacturing sector
investments. Moreover, the government should stimulate SME which are among the
most innovative or research orientated businesses by lowering their tax
thresholds and giving some special capital allowances or adequate credit flow.
The idea is to create an environment where it makes sense for SME to reinvest
their profits in Tamilnadu in new plants and new equipments to turn
promising SME into large successful ones. Our government assistance
particularly to SME’s to help local manufacturers connect with supply chains. In
addition, our universities and technical training colleges and institutions must
be funded to provide best practice programme and encouraging more students to
enter the field of engineering and relevant technology that can supply the
future needs of the industry. Finally, we need to invest in our State
infrastructure and the application of environmentally sustainable technologies.
Let me conclude it Ms. Chief Minister, there are many drivers
owed to government policy help to shape the competitiveness of Tamilnadu
manufacturing such as talent – Science & Technology, Innovation, cost of
labor and materials, supplier network, energy cost, legal and regulatory
system, trade policy and financial but corporate tax reform remain the heart of
Tamilnadu manufacturing competitiveness. I hope that our budget FY 2013-2014
will play a key role to make Tamilnadu, the most attractive location for both
domestic and global manufacturing companies.
Ms. Chief Minister, prosperous and sustainable economy relies on
manufacturing sector.
Thank you very much for your kind attention and I wish you all
the very best for your budget presentation.
Sincere Regards,
Athinarayanan
Sanjeevraja.
Athinarayanan
Advisory Authority
Athinarayanan
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