The new government would have been in place for more than a month by the time this issue goes to press. A perusal of the ministerial berths allotted to various legislators shows a mix of heavyweights and newcomers, with the tilt in favour of the latter. While much has been debated upon the choices for the various portfolios, nothing has polarized opinion as much as the choice of a young woman (she must probably be amongst the youngest ministers ever in the history of the state) to head one of the state’s most important one’s, that of Industries and Investment Promotion.

Soon after the polls ended came the news that the state had clocked a double-digit real economic growth of 10.83 percent for 2025-26 as per statistics released by the Union Ministry of Statistics and Programme Implementation. Coming on the back of a 11.19 percent growth the earlier year, it represented a remarkable achievement of consecutive years of double-digit growth and reaffirmed Tamil Nadu’s status as the country’s second largest economy. The primary drivers of the growth story were the performance of the secondary sector, which registered nearly a 15 percent increase, and the services sector, which registered a 8.5 percent increase, both comfortably higher than the national average.

The economic development of the state, initially spearheaded by the manufacturing success story and its later transformation into a services-oriented economy by the late 1990s and 2000s has been well-documented. But let us be in no doubt that we are at a particularly testing time in history, faced with tremendous upheaval brought about by global headwinds at a macro economic level. We have already seen how the tariffs imposed by the USA mid-last year hit the state’s export economy hard, with the textile industry being particularly affected. Just as there were signs of some revival thanks to the tariff reset in early February came the West Asia crisis, which has again impacted a wide range of industries right from poultry to knitwear. As another article elsewhere in this issue points out, the industrial ecosystem is also plagued by problems of rising electricity tariffs, extensive cross-subsidization and structural inefficiencies of the power sector – all of which hinder growth of energy-intensive units. Yet another challenge that looms large is that of ensuring that the state is geared up for a smooth integration and eventually, a transition towards an AI driven economy.

The next phase of the state’s industrial journey is going to revolve around areas such as Artificial Intelligence, deep technology, cybersecurity, cloud computing, EV technology and semiconductors. These will bring with them associated challenges, primary of which would be upskilling of the existing workforce, which is an essential aspect to attract investments in these areas. The State Planning Commission has already warned that the state has a limited window of five to seven years to prepare its workforce for the age of AI, failing which it would end up losing its demographic advantage, as already 14 per cent of the population are above the age of 60.

Sustaining the growth of the industrial ecosystem will be a key performance indicator of the government. Taking cognizance of some of the common challenges faced by investors seeking to invest in the state, it has promised a 21-day clearance guarantee with single-window approvals and a direct escalation system to the chief minister for grievances relating to investments. While all these make the right noises, it is important that they don’t remain just as empty promises and are followed truly in spirit. Engineering giant Larsen & Toubro’s decision to invest Rs 18600 crores in the state across three locations and the signing of the MOUs (signaling the first major investment for the new government) would probably come as a relief for the young minister, who has been under fire for taking to social media reels to invite investments into the state. If she can show that she is capable of continuing to build on the industrial progress of the state, the means to the end will not matter. But the road is not going to be easy, and this journal wishes her a successful term ahead.