Chennai, Feb 16 (NationPress) Tamil Nadu is on a promising path to reach its ambitious goal of a $1 trillion economy by 2031, provided it maintains its nominal growth rate of 16 percent for the fiscal year 2024-25, as stated in the Economic Survey of Tamil Nadu 2025-26.

This forecast is based on the assumption of a 2 percent annual appreciation of the US dollar against the rupee over the medium term.

However, should the dollar appreciate at a sharper rate of 3.5 percent annually, reaching this milestone could be postponed by a year, according to the Survey.

The detailed 263-page report, compiled by the State Planning Commission (SPC) with contributions from the Finance Department and domain experts, was presented to Chief Minister M.K. Stalin on Monday.

In his foreword, SPC Executive Vice Chairman J. Jeyaranjan lauded Tamil Nadu’s development model, which successfully merges economic advancement with social equity, yielding a sustained double-digit growth driven by the secondary sector.

Despite facing global trade challenges, including multiple rounds of US tariff increases since February 2025, Tamil Nadu's economy has shown remarkable resilience.

The Gross State Domestic Product (GSDP) of the state reached Rs 31.19 lakh crore in 2024-25, achieving a nominal growth rate of 16 percent and a real growth of 11.2 percent — the highest among major Indian states.

Tamil Nadu contributes 9.4 percent to India's GDP, while only occupying 4 percent of the nation’s land and 6 percent of its population. The per capita income surged to Rs 3.62 lakh in 2024-25, which is 1.77 times the national average of Rs 2.05 lakh, positioning Tamil Nadu as the third-largest state in terms of per capita income.

Nevertheless, the Survey has highlighted several challenges, particularly in textile exports, which are facing difficulties due to a 50 percent increase in US tariffs. Nearly 30 percent of the state's textile exports are directed to the US. While the Centre's suspension of an 11 percent customs duty on cotton provides temporary relief, diversifying export markets, along with recent trade agreements between India and the EU and the US, are expected to mitigate the impact.

Fiscal consolidation remains robust, with capital spending projected to reach Rs 2.54 lakh crore between 2020-21 and 2025-26. There has been a significant increase in social sector expenditure, benefiting flagship initiatives like Naan Mudhalvan, Pudhumai Penn, and Kalaignar Magalir Urimai Thittam. Inflation has notably declined, with urban inflation recorded at 2.5 percent and rural inflation at 2.1 percent in 2025-26.

The Survey concludes that disciplined fiscal management, sustained investment, and inclusive welfare policies will be essential for Tamil Nadu to realize its trillion-dollar aspiration.