- Tamil Nadu, the cultural hub of South India, has developed into one of the nation’s most industrialised and urbanised States in recent years. Being the second-largest economy of the nation, it is also a significant investment location, receiving around 9% of all inflows of foreign direct investment into India since 2000. Tamil Nadu is a State with an energy surplus and also adopting renewable energy. The Smart Cities Mission is implemented in 12 cities in the State. They are developing quickly and present huge investment prospects.
- Tamil Nadu leads the nation in Urbanisation. Tamil Nadu’s urban population grew from 1.90 crore in 1991 to 3.49 crore in 2011. In 2031, it is anticipated to rise even more to 5.34 crore. As of the 2011 Census, there are 832 cities and municipalities in the State. Nearly 49 % of the population resides in urban areas.
- PropTech: The State’s capital, Chennai, is a thriving real estate market and a long-standing industrial hub. The city’s growth story is all set to further spread to Tamil Nadu’s Tier II and III regions, thanks to a stable political environment, sector-specific policies, infrastructure improvements, availability of skilled labour, a solid economic foundation and the emergence of new growth frontiers. These factors firmly place the State on the path of multifaceted progress in terms of real estate in the years to come.
- LegalTech: The Madras High Court is prepared to make a significant advancement in its e-filing technology with the release of version 3.0, which offers capabilities that are more sophisticated than those of its earlier editions. The new software will enable uploading of videos of litigants to verify that it is them who submitted the cases and will significantly minimize the amount of metadata that advocates must punch in when filing cases. It will also help keep track of all cases filed by them in courts throughout the State. The e-bail bond module allows for instantaneous transmission of executed bail bonds and sureties to the relevant prison through email, allowing for the release of the accused without the need for further detention. Similar to this, complaints about records getting lost during physical transfer will be fully eliminated by software for digital transmission of trial court records. Trial courts can electronically submit records to the Principal Seat of the High Court and the Madurai Bench for the consideration of criminal appeals and other matters because even old records have now been converted to digital format.
- RegTech: It is the application of emerging technology to improve the way businesses manage regulatory compliance. Tamil Nadu is a forerunner in implementation of regulatory framework for the welfare of citizens. Regulation plays a major role in market-creation, enabling competition and protection of consumers. Regulation, for instance, enables a level playing field between huge incumbents and new entrants.
Prop, Legal & RegTech
Advantage Tamil Nadu
Introduction
Tamil Nadu has a well-balanced economy, with contributions to India’s GDP coming from not only Chennai but also smaller cities like Coimbatore, Salem, Tiruchi and Madurai — the emerging hotspots in the State. With planned infrastructure and economic development, these emerging hotspots are expected to drive the State’s economy in the future.
PropTech, also known as property technology, is the nexus of the real estate sector and technology. As Internet penetration and digitisation become pervasive in emerging (Tier II and III) regions, PropTech is emerging as a promising area in the Indian real estate market. The PropTech industry is the next significant development to keep an eye on as it has the potential to promote promising institutional investments, and much more.
Each subset of PropTech (Real estate marketplace, Real estate Software, Property management, Property brokerage, Lease management, Construction technology, Sustainable building technology, Property Investment and Financing, Home automation, Real estate Marketing etc.) serves a specific use case within the industry.
Currently, the Real Estate sector contributes 6-7 per cent to the country’s GDP. In 2030, the sector might be worth more than $1 trillion, and by 2025, it could potentially contribute about 13 per cent of India’s GDP, according to the Indian Brand Equity Foundation (IBEF).
LegalTech is the application of technology to the delivery of legal services, the streamlining of legal procedures and the enhancement of access to justice. The enhanced accessibility of legal services in India is one of LegalTech’s most important advantages.
The LegalTech industry has witnessed tremendous expansion in certain subsectors such as Litigation management, Legal research analytics, Legal filing, Case management and analytics, Court management, Evidence management, Contract management, Online dispute resolution, Social media discovery, Legal Service Marketplace etc.
The LegalTech sector is booming as a result of the opening up of a sizable domestic market for legal services (about $1.3 billion) to technological interventions and validation of innovative technology-led business models.
RegTech (Regulatory Technology) aims to change the regulatory landscape by offering technologically cutting edge answers to the ever-increasing compliance obligations. RegTech responds to the transition from reactive to dynamic regulation and answers the urgent demand for openness and flexibility in contemporary regulatory systems.
Each sub-sector of RegTech (Regulatory Risk management, Compliance management, Real-time transaction monitoring, Real-time reporting, Decision-making, Data analytics etc.) addresses a certain industry use case.
The global RegTech market is expected to reach $28.33 billion by 2027 and US$ 45.3 Bn by 2032. In India, RegTech received a funding of USD 229 million in Q3 2023, which is a growth of 100 per cent, compared to the funding in Q2 2023, as per a Traxcn report.
Market Potential
PropTech Startups make up more than 6% of all officially recognised Startups in India. In terms of overall capital raised throughout sixty-six rounds, the nation ranks fourth globally (for this industry), having raised about $89.1 million.
The number of people employed in the sector is also expected to rise to seven crore in coming years, from 5.5 crore in 2019. It is estimated that around 88 crore people will be living in urban areas by 2051, as against the current population of 46 crore, creating huge potential for real estate development.
According to CIIE.CO, India spends 0.48% of its GDP on legal expenses. With more than 650 Startups, India is the second-largest market for LegalTech Startups worldwide. Also, LegalTech Startups in India have received $55 million in investment as of March 2022. Modern technology and entrepreneurial spirit may be able to address the inefficiencies present in the legal services industry. Although the industry is still in its nascent stage, it is benefiting from significant tailwinds like the growing digitization of court procedures.
Due to a number of variables that make the PropTech, LegalTech and RegTech sectors appealing for investment and growth, these sectors have increased market potential.
The robust educational system in Tamil Nadu generates a consistent flow of highly qualified specialists in engineering and technology disciplines. These industries require a highly educated workforce, which guarantees a talent pool for doing business in the State.
To attract new businesses, the State Government provides a range of incentives, such as tax breaks and subsidies. The efficiency of doing business in Tamil Nadu is further increased via streamlined approval procedures.
Collaboration among businesses, research organisations and educational institutions is supported by Tamil Nadu’s ecosystem. Such alliances promote innovation and drive industry expansion.
Initiatives
Union Government
PropTech
Several Ministry of Housing and Urban Affairs’ programmes and missions have been established to support Make in India and sector-focused growth. In order to address the lack of urban housing among the Economically Weaker Section/Lower Income Group and Middle-Income Group categories, including slum dwellers, the Pradhan Mantri Awas Yojana – Urban (PMAY-U) programme has been established. A Housing Technology Sub-Mission was started under this programme to help with the adoption and promotion of contemporary, environment-friendly and disaster-resilient technologies. Five incubators have been set up to assist prospective future technologies in the Indian real estate market.
Real Estate Investment Trust and the introduction of a stress fund called SWAMIH to finish housing projects that have stagnated have been created. The Government’s Affordable Rental Housing Complex (ARHC) programme, which is building homes for migrant workers, will also open up commercial chances for the sector. Also, the Model Tenancy Act creates a lot of demand for rental housing in the country.
Startup India, AGNIi (Accelerating Growth of New India’s Innovations), and Invest India have partnered with JLL to create JLL IDEAs, a real estate PropTech accelerator, which will support entrepreneurs with cutting-edge and innovative technology. The initiative intends to build India’s largest platform for technology convergence in the real estate sector and will host numerous PropTech hackathons and innovation challenges to choose the finest real estate businesses. It has a $100 million investment fund.
LegalTech
A committee established by NITI Aayog to develop a comprehensive action plan for Online Dispute Resolution (ODR) in India and an effective implementation structure in response to the growing importance of ODR on a global scale came out with its recommendations in 2021. Additionally, it highlighted how Startups have recently changed the way justice is delivered. It called for greater private sector involvement and supported the development of LegalTech clusters across the nation as some of its recommendations. The Ministry of Law and Justice also supports the growth of LegalTech and recognises Startups in this domain.
State Government
PropTech
Tamil Nadu Housing and Urban Development Department and other departments are implementing various housing projects with support from financial institutions such as Asian Development Bank and World Bank (i) to relocate vulnerable communities living in high-risk areas to safe shelter; (ii) provide affordable, suitable housing for urban poor households and migrant workers from the economically weaker sections and lower-income group and (iii) promote access to inclusive, resilient and sustainable housing and urban development in Tamil Nadu.
Tamil Nadu has an agreement with UNEP to put urban cooling projects into action. The initiative intends to put into action comprehensive action plans, such as promoting urban greenery, preparing for extreme heat and improving urban architecture.
Resources
- Universities and vocational institutions offer education and training programmes that are specifically suited to the needs of the industry.
- For the expansion of this industry, qualified engineers, scientists, researchers, lawyers and technicians are abundantly available.
- For professionals in the sector, training facilities and educational institutions offer continual education and skill development.