If you ask a historian, who industrialised Tamil Nadu, they will likely point to R Venkataraman (RV). As Industries Minister (1957–1967), he undeniably brought the first wave of heavy industry — the PSUs, the boilers, and the coaches.
But if you ask an economist who built the system that makes Tamil Nadu that is approaching the $400 billion GSDP as of December 2025, the answer shifts.
In this article, I argue that while R. Venkataraman broke ground and did bhoomi pooja, M Karunanidhi (Kalaignar) was the Architect who built the skyscraper.
R Venkataraman is often lauded for his role in bringing Central PSUs like the Bharat Heavy Electricals Limited (BHEL), Neyveli Lignite Corporation, and the Intergral Coach Factory (ICF) to Tamil Nadu. While RV has contributed in these projects as his office overlapped during the early days of these projects, the commencement of these projects are often mis-atributed to him. ICF started production in1955 and NLC was established in1956. Both of these major institutions were established much before RV became industries minister in 1957.
M Karunanidhi’s contribution was different. He didn’t just lobby for factories; he created institutions that manufacture factories. He built the state’s industrial “Operating System.”
SIPCOT (1971): Established during Karunanidhi’s first term as Chief Minister, the State Industries Promotion Corporation of Tamil Nadu is the single most important entity in the state’s industrial history. Unlike the limited “Industrial Estates” of the 1950s, SIPCOT created massive industrial complexes with readymade infrastructure. If you work in a factory in Sriperumbudur, Oragadam, or Hosur today, you are standing on land acquired and developed by Kalaignar’s creation.
SIDCO (1970): While RV focused on heavy industry (elite dominated at the time), Kalaignar launched the Small Industries Development Corporation to democratise manufacturing staying true to his dravidian ideology of “social justice”. This allowed the backward communities and first-generation entrepreneurs to enter the supply chain, creating the vast MSME base that makes TN resilient today.
Critics often point out: “But Ford came in 1995 under J. Jayalalithaa. She started the auto boom.”
Ford was indeed a victory for Jayalalithaa. But a single factory does not make a “Detroit.”
The transformation of Chennai into a global auto hub happened between 1996 and 2001, under M Karunanidhi’sleadership.
The Hyundai Pivot (1996): Shortly after taking office in 1996, the DMK government under Karunanidhi facilitated the establishment of Hyundai’s first plant. Unlike Ford, which was initially a joint venture, Hyundai was a massive 100% subsidiary bet.
The Cluster Effect: The administration then capitalized on these anchors to bring in the component ecosystem — Saint-Gobain (glass), Visteon, and others.
Policy Continuity: In 2006, when he returned to power, he sealed the deal for the Renault-Nissan alliance (Oragadam) via MoU in 2008 and the first vehicle was rolled out in 2010, with the kind of speed of execution not seen even in private companies.
These projects cemented the state’s position in the automobile industry.
In the late 90s, while other leaders were still obsessed with smoke-stack industries, M Karunanidhi saw the digital wave.
Tidel Park (2000): When inaugurated, it was one of the largest IT parks in Asia. Critics at the time called it a “white elephant.” Today, it is recognized as the spark that turned the Old Mahabalipuram Road (OMR) into India’s IT corridor.
The Policy Shift: He formulated the IT Policy of 1997, one of the first in India. While Bangalore grew organically, Chennai’s IT growth was a planned state intervention.
This single decision diversified Tamil Nadu’s economy. When manufacturing slows down, services pick up. That balance is Karunanidhi’s legacy.
R. Venkataraman’s industrialisation was largely Chennai-centric (with exceptions like Trichy/BHEL). However, Karunandhi understood that for Dravidian politics to work, money had to flow to the districts.
The Samacheer Industrialisation: Through SIPCOT, he aggressively pushed for industrial complexes in Hosur, Ranipet, and Cuddalore.
TIDEL in Tier 2: He pushed for IT in Tier 2 Cities of Tamil Nadu. In 2010 TIDEL Coimbatore was launced. The current MK Stalin government has branded this initiative as TIDEL Neo and taken it to other cities like Madurai and Trichy, there by preventing the “Bangalore-style” concentration of the capital city.
To give R Venkataraman credit for Tamil Nadu’s industrialisation is accurate but incomplete. It is akin to crediting the Wright Brothers for the modern airline industry. Yes, they flew the first plane, but they didn’t build the airports, the air traffic control, or the economy that sustains it.
M Karunanidhi took the raw materials left by the Congress era and constructed a modern, diversified, and resilient economic engine. He moved the state from relying on New Delhi’s PSUs to standing on its own feet with SIPCOT and global FDI.
This post acknowledges the foundational work of the Congress era (TIDCO was formed in 1965 under the Bhaktavatsalam / RV regime). However, the distinction made here is between “Early Industrialisation” (PSUs) and “Modern Economic Development” (Global supply chains and IT), where MK’s footprint is statistically larger.
Suresh Sambandam is the Convenor of Dream Tamilnadu, a policy think tank with the mission of making Tamil Nadu a Trillion Dollar Economy. The author is also a Member of the State Planning Commission’s Industrial Transformation committee.