Major factors that drive the village economy of Tamil Nadu

Tamil Nadu has a very distinct village culture. It is a curious melting point of the old and the new. There are several lessons that this rural economy can teach to even economists who are interested in specific aspects of development economics. This article is an attempt to discuss certain aspects of the village culture Tamil Nadu and it's implications for the growth of the State economy in some detail.


The village economy of Tamil Nadu works in several directions. It works with specific reference to some economic realities of Tamil Nadu. Not many will know that Tamil Nadu is the most urbanized State in India. It is in this State that one will find fully developed towns separated by no more than fifty kilometers at the maximum. The newly established district headquarters in the town of Ranipet in the Vellore district is just less than thirty kilometers from Vellore. Karur is a district headquarter town but Namakkal is another district headquarters. The latter is well known as one of the largest producers of eggs in India. The lorry traffic to this town has to be seen to be believed. Namakkal is just one hour from the famous town called Salem which is just around sixty kilometers from another district headquarter town called Erode. Now Erode is again connected to the textile hub called Tiruppur, which is another district town.

Such developments have grown the service sector to abnormal levels and around fifty percent of the GDP of Tamil Nadu comes from the service sector. The village economy supports this growth in a massive way. More specifically, the village economy of Tamil Nadu has a) A wide range of non-agriculture activities b) The network with small and big towns c) The "buy here and sell there" practices d) Culture-related economic activities and e) The emergence of semi-urban cultures.

A wide range of non-agriculture services

Go to any village anywhere in Tamil Nadu. One can notice hundreds of vans having names of some matriculation school. The school may be situated off the main road leading to another larger village. However, the school will draw students from the neighboring six villages. Most people have a perception that the Government schools do not have high standards and part of this problem is related to the command over written and spoken English. This perception makes private matriculation schools make money. The drivers and conductors are often given free lunch and a consolidated salary.

Hundreds of college buses transport students to the various arts and science and engineering colleges and even polytechnics. A good amount of money that will collectively run into several lakhs of rupees is pumped into the education of such students from the surrounding villages. Kanchipuram is a large district headquarters that is connected with Chennai by thousands of buses. The local buses also connect Kanchipuram with hundreds of villages. Hence, the students get to study in so many colleges in and around Kanchipuram.

Villages connected to nearby towns become larger villages when agriculture thrives there. In such places one can easily find seven small grocery shops and a bank branch. Two internet centers will do brisk business alongside a few small hotels and a couple of shops selling cement and so on. The shops keep on multiplying because of the floating population. Agriculture is no more the only profession. Every small village will have at least two guys selling cell phones and providing all sorts of service and this will include the repair of cell phones.

The network with small and big towns

The hundreds of villages that surround Tiruppur supply thousands of both skilled and unskilled labor for the textile units. The labor also tends to do their shopping only in Tiruppur. It is now one of the fastest-growing towns of Tamil Nadu. In the evenings when they head for home, this floating population feasts on the number of eateries offering snacks at low prices. Tiruppur's proximity to the second largest city called Coimbatore has also contributed to the former's stupendous growth in recent years. A suburb like Somanur is now well developed because of its connectivity with Coimbatore. Every single locality of Coimbatore city is a town by itself. The best example is Sulur which is approximately twenty kilometers from the city.

The "buy here and sell there" practices

There is an outgrown village called Tirumalpur some fifteen kilometers from Arakkonam on the way to Kanchipuram. There are a number of people who manufacture lungis in their homes. Lungis are purchased in bulk by hundreds of traders who sell them for a fairly good profit in the numerous towns and villages within a radius of over sixty kilometers. There are traders who either grow their own produce or buy in bulk a wide variety of vegetables grown in and around Swamimalai which is a small town near Kumbakonam and transport them for sale to the main town. The numerous private min-bus services that start from 5 AM help a great deal. This author was surprised that the minibus stopped at so many places. At each village, some trader or the other boarded the bus and some purchases even happened on the bus itself. When quizzed, the traders said that the profit would be useful to finance the education of their children in "convent" schools in Kumbakonam. The trading practices are so extensive. On any given day, some six to ten lakh people would be engaged in such trading throughout the State and the money changing hands would run into crores of rupees. The current economic slowdown has not really affected a good part of the village economy of Tamil Nadu.

Culture-related economic activities

On a rough estimate, less than two percent of Tamils would be atheists. The amazingly large number of temples and the various pooja is done at each temple would easily be an industry by itself. And this goes on without government support. Even temples that are controlled by the government have hundreds of thousands of people flocking to offer some prayer or the other. There are special temples as well. For instance, it is widely believed that if one prays to God in the Vaiteeswaran temple some 45 minutes by bus from Kumbakonam, the Lord would bless the patient suffering from even terminal illnesses. This is a culture-specific belief. The availability of information on youtube and google has now brought in tourists from Karnataka and AP as well. This single temple will be offering some self-employment or the other to around one hundred people. The entire economy of this village ( now an outgrown village) depends on this town. It is rather strange that astrology based on ancient palm leaves is a small industry by itself. Nothing happens without matching horoscopes and across all castes and communities, this is the first step in conducting any marriage. This practice of predictions based on palm leaves is now an industry spread throughout Tamil Nadu. But it all started from this small village called Vaitheeswaran Koil.

In thousands of villages across the State weekly temporary bazaars are opportunities for not only shopping but also socializing. The prospective bridegrooms and brides meet up in this bazaar in a typical Tamil movie style. The families then discuss the formalities and the marriages take place within just two months. The marriage halls of the nearby slightly outgrown villages ( particularly those situated near the main bus routes) are always busy and an entire village economy depends on providing some service or the other for these weddings. Even vessels used for cooking are rented out. Those providing the electrical services are very happy as they laugh all the way to the bank. Marriages are big affairs and are based on egos. No one wants to celebrate the marriage in a temple in a simple manner.

What gets sold in the bazaars are cheap sweets, thousands of unbranded textiles, glass bangles, farm produce of all kinds and snacks made of oil. On average at least one lakh and fifty thousand rupees would have changed hands in four hours. It is a fabulous informal economy at work. Not so far away from the venues of these weekly bazaars, one would find the small hotel guys and the mobile hotel guys making a lot of money, as the floating population would anyway eat something before heading home. Unlike the city folks, most sellers would know at least fifty percent of customers by name. Caring and sharing cannot be described in words.

The emergence of semi-urban cultures

The electronic, print and social media in Tamil has made a significant difference in the past decade. Even very small towns have beauty parlors and villages with just thirty thousand people have one too. The urge "to be" is now taking shape among village women. Most of them are at least matriculates and then enroll themselves in some job-oriented courses like bakery-related skills or jewelry design, or even stitching of "designer blouses" that rival the city-based fashions.

It is not only grooming. The villagers tend to shop in nearby towns and eat out too. A variety of specialized hotels offering organic food are multiplying day after day in the small towns and the villagers patronize these like never before.


What has been discussed above are some important aspects of the village economy in Tamil Nadu. The service sector's contribution is massive. These trends are likely to continue.


Author: DR.N.V. Srinivasa Rao25 Dec 2019 Member Level: Platinum   Points : 4

A good informative article from the author.

The villages in Andhra Pradesh also have very good developmental activities and as such the villages progressed well and the people in villages are very happy there. If we see the two Godavari districts, all the villages are very rich. The lands are very fertile and farmers grow commercial crops also there. All the villages are well connected to the nearby towns and all the people will commute with the products they make and sell there for a good profit. Almost all the villages are having small scale industries related to rice husk, cane sugar and ayurvedic medicines. Many people are employed in these industries and they are earning good money. All these villages are fully developed and we will see all the houses with TVs and WiFi connections.

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