Tamil Nadu still way ahead of most states as favoured investment destination during pandemic

CHENNAI: Tamil Nadu is still way ahead of other states in the country as a favoured destination for private investors as it attracted 132 projects worth Rs 23,332 crore during the second quarter of the financial year 2020-21, according to a report released by Projects Today.

While Tamil Nadu is ranked second among the top 10 states which have attracted a large number of investments, official sources told The New Indian Express that Chhattisgarh rose above TN due to public sector investments. "Chhattisgarh managed to attract public sector investments worth Rs 22,653 crore including the Bodhghat irrigation project and a couple of mining projects worth Rs 8,197 crore by South Eastern Coalfields. This helped it top the investment table," official sources said.

The Solar Cells and Modules project of Vikram Solar in Tamil Nadu worth Rs 5,423 crore and a couple of data centre projects helped the state maintain the ranking of most preferred destination, the report said. Interestingly, the state continues to be in the top two for the second quarter highlighting that even during the pandemic, investors are vying to invest in Tamil Nadu.

During the first quarter, the state attracted 17 MoUs worth Rs 18, 236 crore cornering around 18.63 percent of the total fresh investment in this period, thus topping the the list of states in wooing investments.

Meanwhile, the report also highlighted that the Rs 83,608 crore fresh private investments across the country in the second quarter of financial year 2020-21 was far less than the average quarterly fresh investment of Rs 1,69,000 crore and Rs 1,32,000 crore seen in financial year 2018-19 and 2019-20 respectively.

The project implementation ratio (projects investment under execution as percentage of total outstanding investment) improved by a tad, from 37 percent in the first quarter of financial year 2020-21 to 37.53 percent in the second quarter. "It highlights that at ground level, project execution has not gained much traction in the second quarter. The pain issues like scarcity of labour, supply chain disruption and liquidity persisted in the second quarter too," said the report.

Among the major sectors, drugs and pharma, healthcare, roadways, e-commerce and social infrastructure will see increased investment in the coming months. Sectors like automobiles, steel, cement and capital goods will wait for revival in overall demand before chalking out fresh investment plans. Currently, hard-hit sectors like construction, tourism and aviation will need hand-holding from the government for posting some sort of recovery in the second half of the 2020-21 financial year.