Chennai, Feb 16 (IANS) Tamil Nadu can achieve its ambitious $1-trillion economy milestone by 2031 if it sustains its 2024-25 nominal growth rate of 16 per cent, according to the Economic Survey of Tamil Nadu 2025-26.

The projection assumes a medium-term 2 per cent annual appreciation in the value of the US dollar against the rupee.

If the dollar strengthens at a higher short-term rate of 3.5 per cent annually, the milestone could be delayed by a year, the Survey noted.

The 263-page report, prepared by the State Planning Commission (SPC) with inputs from the Finance Department and subject experts, was handed over to Chief Minister M.K. Stalin on Monday.

In his foreword, SPC Executive Vice Chairman J. Jeyaranjan described Tamil Nadu’s development model as one that balances economic growth with social justice, resulting in sustained double-digit growth led by the secondary sector.

Despite global trade uncertainties, including multiple rounds of US tariff hikes since February 2025, Tamil Nadu’s economy remained resilient.

The state’s Gross State Domestic Product (GSDP) at current prices reached Rs 31.19 lakh crore in 2024-25, registering a nominal growth of 16 per cent and a real growth of 11.2 per cent — the highest among major states.

Tamil Nadu contributed 9.4 per cent to India’s GDP, despite accounting for just 4 per cent of the country’s land area and 6 per cent of its population. Per capita income rose to Rs 3.62 lakh in 2024-25, 1.77 times the national average of Rs 2.05 lakh, making Tamil Nadu the third-largest state in per capita income terms.

However, the Survey flagged challenges, particularly in textile exports, which face headwinds due to a 50 per cent hike in U.S. tariffs. Nearly 30 per cent of the state’s textile exports go to the US. While the Centre’s suspension of 11 per cent customs duty on cotton offers temporary relief, diversification of export markets and recent India-EU and India-US trade agreements are expected to cushion the impact.

Fiscal consolidation remains steady, with capital expenditure between 2020-21 and 2025-26 touching Rs 2.54 lakh crore. Social sector spending increased significantly, supporting flagship schemes such as Naan Mudhalvan, Pudhumai Penn, and Kalaignar Magalir Urimai Thittam. Inflation has moderated sharply, with urban inflation falling to 2.5 per cent and rural inflation to 2.1 per cent in 2025-26.

The Survey concludes that disciplined fiscal management, sustained investment, and inclusive welfare policies will be key to realising Tamil Nadu’s trillion-dollar aspiration.

–IANS

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