Economy of South India

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Economic and demographic indicators[1]
Parameter South India National
Per capita net state domestic product (SDP) 29,027.75 (US$430)y 23,222 (US$350)
Percentage share in total FDI approved (1993–2003) 5.48 NA
Average annual growth of SDP 5.6 5.6
Percentage of population below poverty line 17.41 26.10
Percentage of urban population 32.82 27.81
Percentage of households with electricity 89.32 67.4
Literacy rate 72.87 61[2]

Economy of South India after independence in 1947 conformed to a socialist framework, with strict governmental control over private sector participation, foreign trade and foreign direct investment (FDI). Through 1960–1990, South Indian economies experienced mixed economic growth. In the 1960s, Kerala achieved above average economic growth, while Andhra Pradesh's economy declined during this period. Similarly, Kerala experienced economic decline in the 1970s while the economies of Tamil Nadu, Andhra Pradesh and Karnataka consistently exceeded national average growth rates after 1970. Andhra Pradesh, Tamil Nadu and Karnataka were noted by some to be more reform-oriented in terms of economic policy when compared to other Indian states.[3] Over the last decade South India has grown at 8% annually. Future economic growth will be shackled by relatively low proportion of active age population to the number of dependents.

Over 48% of South India's population is engaged in agriculture, which is largely dependent on seasonal monsoons. Some of the main crops cultivated in South India include paddy, sorghum, pearl millet, pulses, sugarcane, cotton, chilli, and ragi. Areca, coffee, tea, vanilla, rubber, pepper, tapioca, and cardamom are cultivated on the hills, while coconut grows in abundance in coastal areas. Information Technology is a growing field in South India. Bangalore is India's Information Technology hub, and is home to over 200 software companies. It is often referred to as the Silicon Valley of India. Five of the country's top seven exporters of software viz. Bangalore, Chennai, Thiruvananthapuram, Hyderabad and Coimbatore are located in South India.

Chennai houses the automobile manufacturing giants in the country. More than 65% of heavy vehicles produced in the country, such as cars, buses, lorries, trains and bicycles, are produced in Chennai, and it is referred to as the Detroit of Asia. Coimbatore (also known as "Cotton City" and "Manchester of South India") in Tamil Nadu is the source of nearly 35% of India's cotton production. Erode and Tirupur are the largest producers of cotton vests and textiles in India; it exports much of its production to South East Asian and European countries. Erode is also known as the "Turmeric City", since it has the Asia's largest market for Turmeric. Gobichettipalayam is one of the largest producers of White silk with the country's first automatic silk reeling unit established here. Namakkal is one of the largest producers of poultry in the country.

Andhra Pradesh[edit]

In 2012-13, the GSDP of Andhra Pradesh at current prices stood at 419,391 crore (US$62 billion).[4] Guntur district is the major contributor 15,082 crore (US$2.2 billion) to agricultural sector during the same fiscal year. While, Visakhapatnam district leads in Industrial sector and Service sector, which contributed 17,598 crore (US$2.6 billion) and 31,372 crore (US$4.7 billion) respectively. The per capita income of the state for 2012–13 was 42,186 crore (US$6.3 billion).[4]

Agricultural sector is one of the chief sector contributing to the economy of Andhra Pradesh. Two important rivers of India, the Godavari and Krishna, flow through the state, which provide fertile soil favourable for agriculture. The state is the main producer of Rice and hence, it is also known as Rice Bowl of India.[5] Poultry is another sector in the state contributing to the economy of the state. The state is a leading egg producer and also nicknamed as Egg Bowl of Asia.[6][7]

The state has also started to focus on the fields of Information technology and Biotechnology. Cities such as Visakhapatnam and Vijayawada have shown growth in IT exports. During 2012–13, the contribution of Visakhapatnam was 1,445 crore (US$210 million) while it was 115.26 crore (US$17 million) for Vijayawada. This is a chart of trend of gross state domestic product of Andhra Pradesh at market prices by Ministry of Statistics and Programme Implementation with figures in crores of Indian Rupees. Accordingly, the state ranks fourth in terms of overall gross state domestic product and fourth in per capita gross state domestic product among the major states of India.[8]


Karnataka's net state domestic product is of $47 billion. Between 1992–2002, Karnataka attracted the fourth highest total Foreign Direct Investment approvals in India, to the tune of Rs.21,566 million. Karnataka accounts for one third of India's Information technology exports. For the year 2006, the state is expected to bring in 37% of all IT revenues amounting to Rs.370 billion ($8.2 billion). Nearly 35% of IT companies and 40% of bio-technology companies are based here. Agriculture in Karnataka, like most of India, employs 80% of the population. Agriculture and its allied activities account for 49% of the state's income. The coastal plains of Karnataka, which include Uttara Kanara and Dakshina Kanara are cultivated with rice and sugarcane. Coffee and Tea are also grown on the slopes of the Western Ghats in the district of Kodagu, Chikmagalur and Hassan. Karnataka produces 70% of India's coffee, of which about 50% is exported. The black soil in the northwest of the state, is hospitable for the growth of cotton, onion, course cereal, sunflower and peanuts.

The forests of the Malnad region produce timber, bamboo and sandalwood. Karnataka is the only exporter of sandalwood in the country. Most of the world's sandalwood oil is produced in Karnataka. All of India's gold comes from the Kolar district of Karnataka. Karnataka is also rich in minerals which form the bulk of the raw materials for iron and steel industries in the state such as the one at Bhadravati. All of India's Iron ore comes from the Malnad region. The first power station in Asia was set up in Karnataka at Shivanasamudra in 1902 to produce hydroelectric power. Karnataka has 18 power stations which generate annually 16,513 million units. The state, however generates insufficient power and is forced to buy electricity from neighbouring states.

Bangalore, the capital of Karnataka, is home to several public sector undertaking aircraft companies, such as Hindustan Aeronautics Limited (HAL), HMT Hindustan Machine Tools, Bharat Heavy Electronics Limited (BHEL), National Aeronautics Limited and also Indian Space Research Organisation (ISRO). Bangalore, often referred to as the Silicon Valley of India has the largest number of international and local Information Technology and business process outsourcing (BPO) companies in the country. A number of "IT Parks" have been set up by the Karnataka State Electronics Development Corporation Limited including Bangalore's "Electronics City" and IT parks in Mangalore, Mysore and Hubli. Bangalore is also home to prestigious higher institutes of learning such as the Indian Institute of Science (IISc) and the Indian Institute of Management (IIM Bangalore).

Hubli-Dharwad is the second largest city in Karnataka and is one of the 49 Metropolitan clusters selected by McKinsey & Company as growth hotspots in India.[9] it is also the most important city in terms of Administration,Business and Commerce in Karnataka after Bangalore and Mangalore.[10][11][12] It is the nerve centre for North Karnataka region. It is the fastest growing city after the capital, Bangalore and Mangalore.[13] It is the Headquarters of South Western Railway, and the Hubli Division of SWR is one of the highest revenue generating railway divisions in India. The High Court Of Karnataka is situated at Belur in Hubli-Dharwad, it also has the largest number of government offices outside Bangalore. The Agriculture Produce market at Amargol in Hubli is one of the largest markets in Asia and the cotton market is among the largest cotton markets in India. The city is a major industrial centre, the railway workshop set-up in 1880 is one of the oldest workshops in India and is also the largest holder of EMD locomotives of Indian Railway, the city is home to Tata Motors, Marcopolo, Hitachi Construction Equipments, Telcon, Sankalp Semiconductors etc. Infosys is about to start its operations from Hubli with a campus of over 50 acres.

Mysore is the third largest and a very important city in Karnataka. Being tagged as 'the Heritage City', tourism is a major economic driver and while it is among the top tourist attractions in India, it is said to rank next only to Madame Tussauds in London in the list of most-visited tourist attractions receiving more than 3 million tourists per year.[14] On the IT front, Infosys has developed the world's largest corporate training centre in the city.[15] Mysore is the second largest exporter of IT in the state[14] and it houses nearly 60 major and minor IT players registered with the Software Technology Park of India [STPI], Mysore[15] and this includes Infosys, WIPRO Technologies, IBM software, Paradigms India, WIFI Net, Logrosoft, Excel soft and Larsen & Toubro Infotech, Theorem etc.[16] Mysore figured high in the vibrancy index survey of Morgan Stanley India last year.[15][17] Mysore & Bangalore account for more than 60% of the incense stick manufacture & export.[18]

Mangalore is one of the biggest business centres in Karnataka.It is the best city to do business, after the capital Bangalore.It is the largest city in the Coastal (Tulunaad) and Malnad regions of Karnataka, besides being a leading commercial, industrial, educational, healthcare and petrochemical hub on the West Coast. It is also the 13th best business destination in India and 2nd best in Karnataka.[19] One of the largest SEZ's in India, the ONGC MSEZ is in Mangalore. The way in which the city is growing can be gauged by pace of growth of real estate industry.[20][21] Mangalore's economy is dominated by the industrial, commercial, agricultural processing and port-related activities.[77] Karnataka's 2nd biggest industrial area-Baikampady IE is in Mangalore. The New Mangalore Port is India's seventh largest port, in terms of cargo handling. It handles 75 per cent of India's coffee exports and the bulk of its cashew nuts.[9] The city's major enterprises include Mangalore Chemicals and Fertilizers Ltd. (MCF), Kudremukh Iron Ore Company Ltd. (KIOCL), Mangalore Refinery and Petrochemicals Ltd. (MRPL), BASF, Bharati Shipyard Limited and Total Oil India Limited (ELF Gas). Mangalore is one among the only 5 cities in the country to have both a Major Port and an International Airport. Mangalore also has an IT Park called Soorya IT Park in Mudipu. The park offers state-of-the-art infrastructure for IT/ITES companies, offering 2.4 lakh sq. ft leasable area. Mangalore is also known as the educational hub of Karnataka with colleges such as MIT, NITK and KMC.[22] Major information technology (IT) and outsourcing companies like Infosys, Cognizant Technology Solutions, MphasiS BPO, Thomson Reuters, Endurance International Group have established a presence in Mangalore.[9] Plans to create three dedicated I.T. parks are underway, with two parks (Export Promotion Industrial park (EPIP) at Ganjimutt and Special Economic Zone (SEZ) near Mangalore University) currently under construction.[81] A third IT SEZ is being proposed at Ganjimutt.[82] Another IT SEZ, sponsored by the BA group, is under construction at Thumbe and spans 2 million square feet (180,000 m²).[83]

The Oil and Natural Gas Corporation (ONGC) plans to invest over ₹35000 crore (US$5.15 billion) in a new 15 million tonne refinery, petrochemical plant and power, as well as LNG plants at the Mangalore Special Economic Zone. Indian Strategic Petroleum Reserves Ltd, a special purpose vehicle under the Oil Industry Development Board, is developing strategic crude oil reserves in Mangalore and two other places in India.[84][85] Out of the proposed 5 million metric tonnes (MMT) storage, 1.5 MMT would be at Mangalore.[86] According to an International edition of India Today (28 November – 4 December 2006), Mangalore is the fastest growing non-metro in South India.[87]

Corporation Bank,[88] Canara Bank,[89] and Vijaya Bank[90] were the three nationalised banks established in Mangalore during the first half of the 20th century. Karnataka Bank, founded in Mangalore, was one of the largest banks to have not been taken over by the Government.[91] The Mangalore Catholic Co-operative Bank (MCC Bank) Ltd.[92] and SCDCC Bank[93] were the scheduled banks established in Mangalore. Mangalore city is the one of the best connected cities in South India with 4 National Highways (17,48,13 & 169; all old numbers), apart from other roadways, railways, waterways and airways. Udupi the temple city is contributing towards the higher education with large number of professional colleges in Manipal. It is also the home of the software company Robosoft Technologies.


The interior of a building in the Technopark, at Thiruvananthapuram (Trivandrum). 70% of the state's IT exports are from Technopark

Kerala's economy is predominantly agrarian. In terms of industrialisation, Kerala lags behind many of the Indian states, but in terms of Human Development Index and life standard of the people, Kerala is ahead of all other states in India. In fact, in certain development indices it is on a par with some of the developed countries. This peculiar paradox is often termed as the "Kerala Phenomenon" or Kerala model of development by experts.

Kerala follows a socialist welfare economy. Kerala's emphasis on social welfare also resulted in slow economic progress. There are few major industries in Kerala, but the per capita GDP is higher than the national average. Remittances from Keralites working abroad, mainly in the Middle East, makes up a large share in Kerala's Gross Domestic Product.

However, today, the state is emerging as a future IT centre of India, owing to its high internet connectivity (undersea cable landing points at Kochi), along with skilled labour. The government has established three IT Parks in the state are Technopark in Trivandrum and Infopark in Kochi and Cyberpark Calicut. The Technopark at Trivandrum is the third largest IT park in Asia, and the largest in India.[23] In addition to Inforpark in Kochi, an IT park named as Smartcity by Dubai Internet City is under construction. Kochi is a safe natural harbour, and hence one of the most important ports of India. A new International Container Transshipment Terminal is commissioned at Vallarpadam, which is expected to be a major transshipment port in India.[24][25][26][27] In addition, the construction of the proposed mega Deep Water Container Transshipment Port at Vizhinjam near Trivandrum is expected to boost up the economy of the state.

Agriculture is still the most predominant economic activity in the state. Coconut, tea and coffee are grown extensively, along with rubber, cashew and spices. Spices commonly cultivated in Kerala include pepper, cardamom, vanilla, cinnamon and nutmeg. Much of Kerala's agriculture is in the form of home gardens.

Dusk in Kovalam beach, Trivandrum

Unemployment is typically high in Kerala,though a recent study by centre for development studies in trivandrum have shown unemployment rate down to 9%.Traditional low-wage cottage industries such as the processing of coconut fibre and cashew or weaving employ most workers. More than a fourth of Kerala's workers provide service.

One of the major ship building yards of India is in Kerala at Kochi. The Southern Naval Command of India has its headquarters in Kochi, and the Southern Air Command headquarters is in Thiruvananthapuram(Trivandrum). There are three international airports in Kerala. They are Trivandrum, Cochin and Kozhikode. Cochin International Airport is the first International Airport in India that has been built with private participation, without the Central Government's stake.

Kerala is also one of the tourist hot-spots of India. It was proclaimed as one of the ten paradises on earth by the National Geographic traveller. The state has also won a large number of awards for its ecotourism initiatives.[28]

Tamil Nadu[edit]

Tidel Park in Chennai is Asia's largest IT park.
Tidel Park— in Coimbatore one of the largest IT park in India.

Tamil Nadu's net state domestic product is the second largest in India. Tamil Nadu is the second largest state economy after Maharashtra. It is second most industrialized state in India next to Maharashtra. It ranks second in per capita income (2004–2005) among large states. It ranks third in foreign direct investment (FDI) approvals (cumulative 1991–2002) of Rs.225,826 million ($5,000 million), next only to Maharashtra (Rs.366,024 million ($8,100 million)) and Delhi (Rs.303,038 million ($6,700 million). The State's investment constitutes 9.12% of the total FDI in the country.[29] According to the 2001 Census, Tamil Nadu has the highest level of urbanisation (43.86%) in India, which accounts for 6% of India's total population and 9.6% of the urban population.

Tamil Nadu has most number of engineering Institutions in India. Chennai is referred as the Gateway of South India. Chennai is the second leading Software exporter in India. Companies such as Cognizant, Covansys, Xansa, Verizon, iSoft, Invensys, Schneider Electric and many others are Chennai based companies in India. Infosys has set up India's largest software development centre to house 25,000 software professionals at an estimated investment of Rs 12.50 billion (Rs 12.5 billion) in Chennai.[30] Coimbatore is growing as a preferred IT destination in India and ranks among the top 7 IT exporters in the country. Chennai has become the most preferred BPO hub in India and South Asia. Chennai is sometimes referred to as the Health Capital of India or the Banking Capital of India, having attracted investments from International corporations and the World Bank and it is called as Detroit of Asia.

Tamil Nadu has a network of about 110 industrial parks/estates that offer developed plots with supporting infrastructure.[31][32] Also, the Government is promoting other industrial parks like Rubber Park, Apparel Parks, Floriculture Park, TICEL Park for Biotechnology,[33] Siruseri IT Park, Agro Export Zones among others.

The heavy engineering manufacturing companies are centred around the suburbs of Chennai. Chennai boasts presence of global car manufacturing giants like Ford, Daimler, Hyundai, BMW, Mitsubishi, Komatsu, Yamaha, Nissan and Renault as well as home grown companies like MRF, JK Tyre, TI Cycles of India, Ashok Leyland TVS and Mahindra and Mahindra. Chennai is also home to one of the Indian Institutes of Technology, IIT Madras. The Koyambedu Bus Stand (Asia's largest bus stand) operated by CMDA is the first bus stand in India to get (The Global Positioning System) which will use sensors to track vehicles on the move.Kalpakkam nuclear power plant, Neyveli Lignite Corporation, and the Narimanam natural gas plants provide sources of fuel and energy for the nation. 55% of electricity from wind power produced in India from wind mills comes from Tamil Nadu. The Kalpakkam Mini Reactor(Kamini) is the only U-233fueled operating reactor in the world.

Coimbatore, also known as the Manchester of South India, is one of the fast developing cities in India and the second largest city in Tamil Nadu. It is the largest city in the Kongu region, which contributes to more than 50% of the state's GDP. Now, most of the Indian Software companies have started their development centres in Coimbatore and it is already among the leading exporters in the field. Coimbatore is also known for its textile factories, engineering firms, automobile parts manufacturers, health care facilities, educational institutions, wet grinders and water pumps. 76% of India's total textile market is from Erode (Loom City) and Tirupur (Textile City). It exports much of its production to South East Asian and European countries. Erode is also known as the Turmeric City, since it has the Asia's largest market for Turmeric. Gobichettipalayam is one of the largest producers of White silk with the country's first automatic silk reeling unit established here. Namakkal is one of the largest producers of poultry in the country. Salem is called as steel city and has many sago producing units, mineral wealth. Sivakasi is the leader in printing, fireworks, safety matches production in India. It contributes to 80% of India's total safety matches production, 90% of India's total fireworks production and 60% of India's total offset printing solutions and ranks as one of the highest tax-payer towns in India. Tamil Nadu is leading producer of kambu, maize, ground nut, oil seeds and sugarcane in India.

Biovalleys in Tamil Nadu include Biotechnology Incubator Park Near Chennai, Women's Biotechnology Park Kelambakkam,[34] Medicinal Plants Biotechnology Park, Madurai, Marine Biotechnology Park, Mandapam and Bioinformatics and Genomics Centre (BGC), Chennai.[31][35]



Telangana state has two important rivers of India, the Godavari and Krishna, flowing through the state where agriculture is one of the main source of economy. Rice, tobacco, cotton, chilli pepper, and sugarcane are the local crops. The state has also started to focus on the fields of information technology and biotechnology. Hyderabad, the capital of Telangana, is the sixth-largest cosmopolitan city in India, rich in culture, enduring history and industrial growth.

See also[edit]


  1. ^ Also A Head For Numbers. Outlook India. 16 July 2007
  2. ^ India. World Factbook. Central Intelligence Agency. 20 March 2008
  3. ^ "Working Paper No. 144 : Economic Growth in Indian States" (PDF). Retrieved 22 July 2015. 
  4. ^ a b "Economy" (PDF). AP state portal. pp. 64–65, 92. Retrieved 21 June 2014. 
  5. ^ India Today. ABC-CLIO. p. 36. ISBN 978-0-313-37462-3. Retrieved 15 November 2014. 
  6. ^ Sally, Madhvi (14 December 2012). "Egg production and consumption". the Economic Times (Ahmedabad). Retrieved 27 June 2015. 
  7. ^ Mohanty, Muktikanta (2010). Macmillan's General Knowledge Manual 2010. Macmillan. p. 72. ISBN 978-0-230-32874-7. Retrieved 15 November 2014. 
  8. ^ "MOSPI". 
  9. ^ Srivats, K. R. (30 October 2014). "McKinsey identifies 49 metropolitan clusters that could be growth hotspots". The Hindu Business Line (New Delhi). Retrieved 27 June 2015. 
  10. ^ "hubli Dharwad region". 
  11. ^ P.R. Sanjai. "Air Pegasus starts commercial operations".  External link in |work= (help)
  12. ^ "Business Hotel in Hubli - The Gateway Hotel Lakeside Hubli, part of The Taj Group". 
  13. ^ Air Pegasus Pvt Ltd. "Air Pegasus - Our Route Map". 
  14. ^ a b BS Reporter (24 October 2011). "Mysore too may host mass rapid transit system". 
  15. ^ a b c Kumar, R. Krishna (28 April 2012). "Welcoming the investor to Mysore". The Hindu (Chennai, India). 
  16. ^ "Bangalore IT majors eye Mysore option". 
  17. ^ "Morgan Stanley - Press Release - Morgan Stanley Launches India Urbanization Index; Bangalore, Hyderabad and Pune Ranked "Most Vibrant"". 
  18. ^ [1]
  19. ^ "India's 21 best cities for business, Bangalore tops". Rediff. 23 October 2013. 
  20. ^ "Real Estate Industry in Mangalore". 
  21. ^ "South India tops North for tier-III realty development". timesofindia-economictimes. 
  22. ^ Alsbridge (28 March 2007). "Alsbridge Names Next Top 10 Indian Cities for the Future of IT Outsourcing". 
  23. ^ "Technopark to become India's biggest IT park". INRnews. 15 February 2007. Retrieved 2007-02-17. 
  24. ^ "Kochi terminal handed over to Dubai Ports International". The Hindu (Chennai, India). 2 April 2005. Retrieved 2006-05-23. 
  25. ^ "Vallarpadam phase I by early 2009: DP World". The Hindu. 2 April 2005. Retrieved 2006-05-23. 
  26. ^ "Vallarpadam ICTT: Set to make Kochi a key hub". The Hindu Business Line. 27 October 2008. Retrieved 2008-11-14. 
  27. ^ "Statement by the Government of India" (PDF). Press Information Bureau, Govt of India. 27 October 2008. Archived from the original (PDF) on 25 February 2009. Retrieved 2008-11-14. 
  28. ^ "Kerala becomes first Indian state to win top UN Award in Tourism". IBNLive. 
  29. ^ "Tamil Nadu ranks third in FDI, favoured destination". The Hindu. 1 January 2008. 
  30. ^ "Infosys sets up center". Retrieved 1 January 2008. 
  31. ^ a b "Tidel Park". 
  32. ^ "International Tech Park Chennai". 
  33. ^ "Ticel Bio Park". 
  34. ^ "Golden Jubilee Biotech Park for Women Society: Existing units". Archived from the original on 26 February 2008. 
  35. ^ "Indian firms embrace biotechnology". BBC News. 1 January 2008. 

External links[edit]