Unlike many other historical cities that have been reduced to small towns, hamlets and ruins in the modern age, Madurai still remains a "city" and a major regional hub of commerce. However, it is a concerning fact that it has failed to achieve the progress it should have and its city ranking has sunk in the past few decades. Though it is still Tamil Nadu's second largest city, its preeminent status is fast vanishing and is losing out to other cities like Trichy, and more recently, Coimbatore. Not only has it failed to attract new domestic and foreign investments, but it has also failed to capitalize on its inherent strengths. Government sponsored initiatives to promote entrepreneurship and build local champions have only enjoyed limited success.

Though there is no dearth of talent in Madurai, thanks to the Engineering and Science colleges in the city, it has not been able to retain the pool of qualified professionals. During the years following the Information Technology boom that swept across the country, the city saw an exodus of professionals to other urban centers like Chennai, Bangalore and Mumbai which offered them better job prospects. This continues to this day, and will continue unless there is some significant industrial development in the next few years.

Many squarely blame the state government for limiting industrial development to northern Tamil Nadu, Chennai and its adjacent districts in particular, and cite this as the reason southern Tamil Nadu is industrially underdeveloped. One Tamil political party suggested even bifurcating the state on this grounds. While this claim may not be totally invalid, the main reason Madurai is industrially underdeveloped lies in the fact that there is a definite lack of initiative and poor self-esteem amongst the local populace. The elite and professionals who ought to guide their fellow citizens into the new economy shrug away from their responsibilities, and worse, move to other cities looking for greener pastures and settle down there.