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        New manufacturing and IT companies are being encouraged to move out to at least 40 - 50 km from Chennai with a view to decongesting the metropolis which is suffering from mounting pressure on its urban infrastructure.

        'We are trying to woo foreign investment in the manufacturing sector for setting up operations in towns like Sriperumbudur, Irungaattukottai, Oragadam, Maraimalai Nagar, Cheyyar, Gummidipoondi and Ennore located in neighbouring districts to decongest the city from industrial clusters,' said M Velmurugan, director, Guidance Bureau of the State Industries Department. Last year (2006-07), both Kancheepuram and Tiruvallur districts alone would have netted foreign direct investment (FDIs) of nearly $2.2 billion in the manufacturing sector, mostly in automobiles and electronics. There was a conscious effort to channel new investment flows, both in manufacturing and IT sectors, onto southern districts of Tamilnadu, said Velmurugan. 'Through SEZs in Tirunelveli, Madurai, Coimbatore, Erode and Perambalur, we offer choice locations with incentives to both domestic and foreign investors for setting up enterprises in down South of Chennai, which would open up avenues of employment,' he explained. The domestic investment in manufacturing alone would have easily touched Rs 2,500 crore in Tamilnadu for the fiscal year ended March 2007.

        ELCOT, the promotion arm for IT firms in Tamilnadu, has taken up showcasing of Tier II towns of Madurai, Coimbatore, Salem and Tiruchi for attracting software firms. The nodal agency has plans to set up at least eight SEZs for IT and ITeS companies in the near future across the State. An SEZ unit should have at least one million sqft of office space which would give rise to a minimum of 8,000 jobs in the IT sector and in the case of manufacturing SEZ, the job opportunity was more for the surrounding regions, explained officials. Once the Development Commissioner at MEPZ inspected the land sites and construction activity, 'we can expect the formal notification from the Commerce Ministry for setting up of IT SEZs any time before March 2008,' informed B Evanesan, business manager at ELCOT. Already, the Centre has given in-principle approval for two SEZs in Madurai, one each in Tirunvelveli, Tiruchi, Salem, Hosur and Kacheepuram districts which would yield a total investment of Rs 3,000 crore for infrastructure projects alone. More than a lakh of IT professionals would be employed at the SEZs coming up in Tier II towns.

        Wipro Ltd has taken up construction at the SEZ in Sholinganallur, a city suburb, over a 370-acre campus which has got the final nod from the Commerce Ministry. Nearly 4,000 people would be employed by the end of 2007 and once this SEZ gets into full steam in the next 18 months, at least 25,000 jobs would be created at the IT park. 'In the current year (2007-08), ELCOT promoted IT parks and SEZs at Kancheepuram and Tiruvallur districts will fetch an investment of Rs 500 crore,' said Evanesan.

        Welcoming the new focus to attract companies in neighbouring towns of Chennai and southern districts, M Rafeeque Ahmed, chairman, TN Council, FICCI, said the government must first invest in the development of infrastructure for companies to set up units away from Chennai.

        On the problematic issue of land acquisition in Kanchee-puram, Chengalpet and Tiruvallur districts, Rafeeque, also chairman, Farida group, said private firms must negotiate at the market rate to buy the land from villagers and farmers. 'Anyway for converting the agricultural land into industrial zone, we have to approach the government for a hassle-free process in setting up of industrial units,' he said.

        But the process of acquiring farmland is a bone of contention for political parties in Tamilnadu. PMK chief Dr S Ramadoss has warned of a state-wide agitation if the government acquired farm land for the purpose of setting up industrial clusters or SEZs.