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Investment climate in M.P. - (June 2006)
The new Madhya Pradesh government is committed
to “Growth with Employment”. To facilitate “Growth with Employment”
the M.P. Govt. has taken bold policy initiatives & has drawn
out strategies to ensure desired outcomes from these policy frame
works.
A brief summary of Industrial development
and Investment Scenario in Madhya Pradesh is given below:
MADHYA
PRADESH INDUSTRIAL DEVELOPMENT & INVESTMENT SCENARIO (2003-June
2006):
Earlier days the investments used to follow trade
but in the present global scenario trade is followed by pouring
investments in opportunity areas. All recent reports from FICCI,
World Bank, Mckinsey & others have confirmed that investments
in Infrastructure, Manufacturing, Agriculture & Service sectors
fuel growth. These reports also suggest that the G.D.P. growth of
India can be enhanced by at least 2-3% points if the procedural
bureaucratic delays can be avoided.
Taking cue from these two focal points
the new Madhya Pradesh Government has put forward its vision, &
strategies to meet the national objective of attaining 8-10% annual
GDP growth on a sustained basis.
The Madhya Pradesh Government has now
come up with New Industrial Promotion Policy, 2004 (being restructured
again based on feedbacks from Investors) & New Forest Policy
2005 to enhance growth in both urban and rural areas.
It is advantageous to set up units in
Madhya Pradesh because the land and knowledge workers are available
at a very low cost. It is an industrially peaceful state with fewer
law & order problems. According to Tata Statistical outline
2005-2006 (page 147) the turnover on investment in Madhya Pradesh
is one of the highest among all states in the country.
Investment proposals worth about Rs.
86,000 crore ($19b approx) are in different stages of consideration
in Madhya Pradesh.
Never before has the investment climate
been so upbeat.
To a great extent, the New Industrial
Policy 2004 is responsible for generating an atmosphere of confidence
in industry. This is a new Madhya Pradesh, which truly means "Business".
Whether in the field of infrastructure or manufacturing or the service
sector, fresh investments are pouring into Madhya Pradesh.
On it's part, the Madhya Pradesh Government
is making every possible endeavour to market the State, invite investments,
and offer incentives and conducive environment to facilitate fresh
investments.
HIGHLIGHTS OF NEW
INDUSTRIAL POLICY - 2004
v
A promotional assistance equivalent to 50-75% of
the Commercial Tax & Central Sales Tax deposited in the first
year shall be given in the second year. This promotional assistance
shall be given for 3-10 years depending upon the category of the
district & the amount of assistance shall not be more than the
total investment of the installed unit.
v
Special package for mega project.
v
Concession/Exemption of stamp duty.
v
Exemption from ”Electricity Duty” for first 5 years
on Captive power generation.
v
Partial reimbursement of expenditure for Quality
Certification.
v
Capital Investment Subsidy, Exemption from Entry
Tax for 5 years.
v
Subsidy to Industry under thrust sector, Exemption
from Mandi Tax for Agro Processing Industry.
TEXTILES:
Madhya Pradesh has traditionally been one of
the leading states in the field of textiles. Indore was the city
where the first mega mills: Hukumchand Mills, Raj Kumar Mills, Hope
Textiles etc. were established. Once again the textile sector in
Madhya Pradesh is throbbing with activities.
Mahavir Spinning Mills of Ludhiana (SP
Oswal Group) is setting up an integrated textile mill at a total
investment of almost Rs. 850 crore, which is now being revised to Rs.
1900 crore (in two phases) by attracting other cluster based industries
like garment & knitting etc. Nahar Spinning Mills is also planning
a new unit. Similarly Pratibha Syntex is planning investment of
about Rs. 400 crore in Indore in the Apparel Park to be developed
there. An Apparel Park for integrated textile units is being built
up within the SEZ in Indore. This will have State of the Art Common
Effluent Treatment Facilities (CETP). Separately a ready-made garment
complex has also been built in Pardesipura in Indore.
Auto Sector:
Auto manufacturing & Auto components
units have a sizable presence in Madhya Pradesh. Companies like
Bajaj Tempo, Eicher & Hindustan Motors have their units at Pithampur
near Indore.
It is projected that fresh investments
of almost Rs. 1000 crore from the Auto and Auto Components Industries
shall come in soon.
An Auto cluster is being developed at
Pithampur to make it India's most vibrant hub for the production
of Medium/Heavy Commercial vehicles for passengers/cargo. Likely
turnover of OEM in Pithampur area will be Rs. 10,000 crore in the
year 2009-2010, and Auto Components industry will have estimated
turnover of Rs. 4,500 crore in 2005-2010.
A separate company has been set up for
the development of this Auto Cluster called "Pithampur Auto
Cluster Limited". This is going to be a professional company
and an expert CEO is being identified to lead the Auto Cluster to
International competitiveness.
A proposal for setting up an "Auto
Testing Centre" involving an area of more than 4000 acres of
land near Pithampur is understood to have just been cleared by Government
of India.
Food, Agro Processing
& Herbal:
Madhya Pradesh is the largest producer
of oil seeds & pulses in India. 60% of country's Soybean &
40% of Gram is grown here. Madhya Pradesh is the largest producer
in India of spices such as Garlic & Coriander. Internationally
exportable variety of wheat & potato are grown here.
11 out of 16 Agro climatic zones in
India pass through Madhya Pradesh. Rare species of medicinal plants
are grown in 10000 hectares.
The knowledge pool on Agriculture &
Herbal sector is very high in M.P. It could be an ideal State for
investments in Agro, Herbal & Bio tech sectors, because of its
biodiversity.
Legal frame work for Contract framing
is operational in M.P. & is benefiting thousands of farmers.
In spite of being the 2nd
leading State in the areas of fruits & vegetables in India,
the food-processing sector in Madhya Pradesh is relatively un-developed.
Now it is being treated as a thrust sector in the New Industrial
Policy and various concessions & incentives have been provided
for this sector. Investment proposals for more than Rs. 200 crore
are in the offing. Many proposals for organic farming and production
and herbal products have been received.
In the year 2003-2004 Government of
India has sanctioned six "Agriculture Export Zones" (AEZ)
for six agro products in Madhya Pradesh. This initiative would strengthen
the infrastructure in Food Processing.
The M.P. villages are well connected
by ITC-E chaupal model and contract farming is being done by corporate
sector. Notable among them is Pepsi, which is doing contract farming
in 10000 ha of land in Ujjain division for potato farming (Chip
variety).
Gems & Jewellery:
Madhya Pradesh has the only running
Diamond mine (at Panna) in the country.
A state of art Gems & Jewellery
park at Indore with an area of 18,1999 sq. meters is under construction.
Cement:
M.P. is the third largest producer of
cement in the country. It caters to 13% of the National demand.
The state is rich in cement producing minerals & the logistical
advantages of these sites reduces the overall cement manufacturing
& supply chain cost, helping the cement companies to get a higher
return on investment (ROI).
The state has the appropriate know how
& knowledge pool to run cement plants. At present several major
groups like Birla Corporation, Vikram Cement, Prism Cement, J.P.
Rewa, Diamond Cements, Maihar Cement & ACC own manufacturing
plants in Madhya Pradesh. Out of these units J.P. Rewa & ACC
are in process of investing Rs. 1100 crore ($ 24 Million approx.)
for expanding their production capacities.
ENGINEERING/ELECTRICAL
ENGINEERING INDUSTRIES:
Government of India has identified Govindpura,
Bhopal as an Engineering Cluster destination. In the year 2002-2003
the total production of engineering goods from Govindpura was Rs.
350 crore ($ 76 Million approx), which is likely to double in next
5 years.
Due to large sum of money being invested
in power sector, all the electrical Engineering industries are likely
to grow at a rapid pace & locations like Bhopal & Indore
can expect an investment of Rs. 450 crore ($ 100 Million approx)
in next 5 years.
Potential areas:
- International Standard Tool Room.
- Up gradation of ITI (Industrial Training Institutes).
- Setting up light manufacturing units & heavy Engineering.
Information Technology:
Various facilities are available in Madhya Pradesh
for starting of Call Centers and IT units. A fully integrated IT
Park known as the Crystal IT Park is being built at Indore. It has
32740sq meters(3.5 lakh sq.ft.) built up space. It will be an intelligent
building with all modern facilities and management systems etc.
A Rs. 100.00 crore ISRO facility has started functioning at Bhopal
from April, 2005 this would enable IT related industry to grow around
Bhopal. At last; the stage has been set for IT growth in Madhya
Pradesh, which how has 67, Engineering Colleges & one National
Institute of Information Technology and Management at Gwalior.
Government of India has recently sanctioned
an Institute of Information Technology & Design at Jabalpur.
Special Economic Zone (SEZ) BENEFITS:
M.P. has the first operational SEZ (at Pithampur) near Indore
in the country, with several units starting their Commercial Production
in December 2004. Already more than 15 units have started their
preliminary project related work at the SEZ. The benefits of investing
in SEZ Indore are - complete exemption from all state taxes duties,
levies & liberalized labour laws; power supply on no loss-no
profit basis; all the other benefits announced by Government of
India for SEZ are also available; all the support facilities like
offshore banking, post office & custom are available at SEZ
with an added facility of a "Dry Port".
On similar lines investors can build their own SEZ at Bhopal, Indore
or any other place.
INFRASTRUCTURE:
The state has developed an excellent infrastructure.
It has 19 Industrial Development centers, 129 Industrial Areas,
6 (six) food parks, 8 integrated development centers, one stone
park, one SEZ at Indore, 3 dry parks, one IT park, and one apparel
park at Indore.
The Madhya Pradesh State Industrial Development Corporation &
Industrial Development Corporation Indore have taken up an 80 crore
project to bring water from Narmada river (from Nemawar which is
128 kms away from Dewas.) to Dewas under BOT scheme.
This project will not only solve the water problems of 460 industries
located at Dewas but will facilitate further industrialisation of
Dewas Industrial Belt.
Another project of Industrial hazardous waste disposal is being
mooted near Indore to take care of Industrial waste generated at
various places in Madhya Pradesh.
2000 Kms of road projects are already being completed under the
BOT scheme in which, for the first time, private sector participation
has ensured that Government spends only 50% of the capital cost
of renovating the roads. Another 1100 Kms. of roads are to be completed
under an Asian Development Bank Road Project. Further, another 2000
Kms. of road are planned on a BOT basis. This would take care of
almost all major State Highways.
POWER:
Apart from on-going projects on the river Narmada at Punasa and
the Onkareshwar Project, several other projects are being flagged
off. The Maheshwar Hydro Electric Project shall start its work soon.
Madhya Pradesh Govt is setting up a 1000 Mega Watt Thermal Power
Plant at Khandwa.
We are striving hard to make M.P. a power surplus state by the
year 2008. This means that we shall have sufficient power for Agriculture
use in next 2-3 years. Power reforms like bifurcation of State Electricity
Board into 3 organizations has already taken place and the Electricity
Regulatory Commission is in operation.
Law, Order & Industrial Harmony:
The laws and order situation is satisfactory and on the labour
front, reforms are being initiated as per new Industrial Promotion
Policy 2004. It’s a matter of pride that no of man days lost
is less than 1% of the total man days available during the period
of last 5 years.
MADHYA PRADESH TRADE & INVESTMENT FACILITATION
CORPORATION LTD. (TRIFAC):
This is a Single Table clearance facility wherein the investor
submits his project proposals for initial approvals.
Under the Single Table System - Clearance pertaining to departments
of Housing & Environment, Madhya Pradesh State Electricity Board,
Food & Drug Administration, Energy, Commercial Taxes, Revenue,
Labour, Industry & Urban Administration are issued in a time
bound manner.
TRIFAC has enabled the Apex level Project Clrearance Board headed
by the Chief Minister to approve and give clearance to projects
worth about Rs. 4500 crore in just four meetings of the Board.
The bottom line is that Madhya Pradesh is now making rapid strides
towards socio-economic progress with an eye on globalization. The
new Industrial Promotion Policy - 2004, a friendly & committed
bureaucracy (as reported in leading newspapers) with right kind
of strategies & people's participation shall usher a new era
of development in Madhya Pradesh. The sleeping giant, Madhya Pradesh
is awakening.
Units Used :
- Crore is equal 10 million.
- 10 Lakh is equal 1 million.
- Rs. 45.0+ is equal to US dollar 1.
- One hectare (Ha) is equal 2.5 acres.
Major
investment proposals on the anvil (April 2004 - June
2006)
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