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SIKKIM April 2010 SIKKIM April 2010 SIKKIM April 2010 SIKKIM April 2010 Investment climate of a state is determined by a mix of factors • Skilled and cost-effective labour • Procedures for entry and exit of firms • Labour market flexibility • Industrial regulation, labour • Labour relations regulation, other government regulations • Availability of raw materials and natural • Certainty about rules and regulations resources • Security, law and order situation Regulatory framework Resources/Inputs Investment climate of a state Incentives to industry Physical and social infrastructure • Tax incentives and exemptions • Condition of physical infrastructure such as • Investment subsidies and other incentives power, water, roads, etc. • Availability of finance at cost-effective terms • Information infrastructure such as • Incentives for foreign direct investment (FDI) telecom, IT, etc. • Profitability of the industry • Social infrastructure such as educational and medical facilities 2 SIKKIM April 2010 Contents Advantage Sikkim State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Sikkim 3 ADVANTAGE SIKKIM Sikkim April 2010 Sikkim – State profile • Covering an area of 7,096 sq km, Sikkim is the least- populated and third-smallest state after Goa and Delhi. Sikkim shares its border with the state of West Bengal and the neighbouring countries of Nepal, Bhutan and Tibet. • Gangtok is Sikkim’s capital city. The state has four administrative districts - North, East, West and South. Gyalshing, Namchi, Mangan, Jorethang, Singtam, Rangpo, Pa kyong,Rhenock, Meli, Chungthang and Soreng are the key cities and towns in the state. • Sikkim has 28 mountain peaks, 84 glaciers, 227 lakes, five hot springs, and eight mountain passes – making it an ideal tourist location. The Teesta and Rangeet are the two major rivers with nearly hundred tributaries. • Sikkim has 15 soil series and eight sub-groups, making it a fertile land for cultivating rice, maize, wheat, millet, barley, pulses, soy bean, coriander, cardamom and various fruits. • Nepali, Bhutia, Lepcha, Limboo, Magar, Rai, Gurung, Sherpa, Tamang, Newari, Sunuwar (Mukhia) are the commonly spoken languages. Hindi, English and Tamil are also widely spoken. 4 ADVANTAGE SIKKIM Sikkim April 2010 Advantage Sikkim … (1/2) Natural resources Sikkim is naturally endowed with rich flora and fauna. Its climate and topographical conditions support industries such as agriculture, horticulture, food processing, tourism and non- timber forest produce. Policy and fiscal incentives The state follows the North East Industrial Investment Promotion Policy, 2007, which provides several incentives and concessions for investment in the state. Institutional support The state provides excellent institutional support through various central and state government agencies viz., North East Council, Ministry of Development of North Eastern Region, Commerce and Industries Department. 5 ADVANTAGE SIKKIM Sikkim April 2010 Advantage Sikkim … (2/2) Facilitating infrastructure Sikkim is well connected by roads. Telecommunication connectivity compares with the national standards. Optical-fibre connectivity is being developed. Rail and air connectivity are also being developed in the state. Rich labour pool Sikkim has a high literacy rate; with the establishment of Sikkim Manipal University and the Sikkim University, the quality and quantity of employable graduates has improved in the state. Stable political environment The state has a stable political set up with a single- party government. The State Government is committed towards creating a progressive business environment. 6 ADVANTAGE SIKKIM Sikkim April 2010 Sikkim in figures … (1/2) Parameter Sikkim All-states Source Economy GSDP as a percentage of all states’ 0.06 100.0 CMIE, 2005-06 GSDP Average GSDP growth rate (%) 13.9 7.5 CMIE, 1999-2000 to 2007-08 Per capita GSDP (US$) 986.8 998.1 CMIE, 2007-08 Physical Infrastructure Central Electricity Authority, Installed power capacity (MW) 46.1 98,996.4 as of March 2009 Cellular Operators Association of GSM cellular subscribers (No) 4,068,599* 367,328,179 India, as of November 2009 Broadband subscribers (No) 14,202* 4,981,976 As of October 2008 Ministry of Road Transport & National Highway length (km) 62.0 70,548.0 Highways, 2007-08 Social Indicators Literacy rate (%)** 68.8 65.38 Sikkim Economic Survey, 2006-07 Birth Rate 18.1 23.1 National Health Profile, 2008 *Figures for the Northeast comprising Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura **Census 2001 7 ADVANTAGE SIKKIM Sikkim April 2010 Sikkim in figures … (2/2) Parameter Sikkim All-states Source Ease of doing business Outstanding investments 4.8 1,709.7 CMIE, as of December 2008 (US$ billion) Industrial Infrastructure PPP projects (No) 24 460 www.pppindiadatabase.com PPP: public private partnership Parameter Sikkim Government Policy support Sectors with specific policies IT Policy, Tourism, Industrial development Availability of labour Adequate skilled labour available 8 ADVANTAGE SIKKIM Sikkim April 2010 Key industries in Sikkim with policy thrust and factor advantages Industry attractiveness matrix High Hydro-power To ur i s m Bamboo Agriculture and IT Horticulture Medium Food processing Policy thrust Policy Minerals Sericulture Handloom Low Medium High Factor advantage *Factor advantages include benefits due to geographical location and availability of factors such as talent pool, natural resources and capital 9 SIKKIM April 2010 Contents Advantage Sikkim State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Sikkim 10 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Socio-economic snapshot of Sikkim Parameters Sikkim Capital Gangtok Geographical area (sq km) 7,096 Administrative districts (No) 4 Population density (persons per sq km) 76 Total population (million) 0.54 Male population (million) 0.28 Female population (million) 0.25 Population growth rate 1991-2001 (%) 33.06 Sex ratio (females per 1,000 males) 986 Literacy rate (%) 68.80 Male (%) 76.00 Female (%) 60.40 Source: Economic Survey, 2006–07 11 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Sikkim’s GSDP • At current prices, the total Gross State Domestic Sikkim’s GSDP (US$ million) Product (GSDP) of Sikkim was about US$ 585.2 million in 2007-08. 2007-08 585.2 2006-07 458.3 2005-06 412.8 • The state’s GDP grew at a CAGR of 13.9 per cent between 1999-2000 and 2007-08. 2004-05 357.1 2003-04 311.3 CAGR 2002-03 263.8 13.9% • Sikkim was among the states that recorded high 2001-02 238.2 GSDP growth rates between 1999-2000 and 2000-01 221.5 2007-08. 1999-00 206.7 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 Source: CMIE 12 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Sikkim’s NSDP • At current prices, the Net State Domestic Sikkim’s NSDP (US$ million) Product (NSDP) of Sikkim was about US$ 494.9 million in 2007-08. 2007-08 494.9 2006-07 386.5 • Sikkim’s NSDP grew at a CAGR of 13.7 per 2005-06 347.2 cent between 1999-2000 and 2007-08. 2004-05 302.3 CAGR 2003-04 263.3 13.7% 2002-03 223.0 2001-02 200.5 2000-01 186.9 0.0 100.0 200.0 300.0 400.0 500.0 600.0 Source: CMIE 13 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Sikkim’s economy is driven by the secondary and tertiary sectors • The secondary sector has been the fastest Percentage distribution of GSDP growing sector, at a CAGR of 13 per cent CAGR between 1999-2000 and 2007-08. It is driven by 100% construction and hydroelectric power 80% generation. 10.4% 69.3 69.5 60% • At over 69 per cent, the tertiary sector is the 13.0% largest contributor to Sikkim’s economy. It grew 40% 5.4 4.6 at a CAGR of 10.6 per cent and is driven by 20% trade, hotels, real estate, transport and 25.3 25.9 10.6% communications. 0% 2007-08 1999-00 Primary Secondary Tertiary • The primary sector’s share in the GSDP has been consistent at 25.3 per cent, driven mainly by agriculture. It recorded a CAGR of 10.4 per Source: CMIE cent between 1999-2000 to 2007-08. 14 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Per capita GSDP • In 2007-08, the state’s per capita GSDP was US$ 986.8. • The per capita GSDP increased at a CAGR of 11.9 per cent between 1999-2000 and 2007-08. It has more than doubled during this period. • Trade, tourism, transportation and agriculture have been the key drivers of the increase in per capita GSDP. Per capita GSDP 1000.0 986.8 782.1 800.0 714.1 626.6 600.0 553.0 475.4 431.5 (US$) 402.2 416.4 400.0 200.0 0.0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Source: CMIE 15 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Key industries in Sikkim • The Commerce and Industries Department of Key industries in Sikkim Sikkim is involved in promotion of trade and industry in the state. Tourism Agriculture • The Sikkim Industrial Development & Investment Agro-processing Corporation Limited (SIDICO) is the state-level institution engaged in promoting, financing and Handlooms and handicrafts developing the tiny and small scale industries (SSI) Hydroelectric power sector in the state. Tea Minerals • Eco-tourism, handicrafts and handlooms, silk reeling and processing, precision Sericulture engineering, electronics, IT, medicinal Horticulture plants, floriculture, tea, spices, honey and biotechnology are thrust areas identified by the state. • Being a potentially eco-fragile location, the people of Sikkim support promotion of pollution-free industries. 16 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Sikkim April 2010 Rice, maize, oil-seeds, orange, tea and spices are the key agricultural products • Agriculture and allied sectors contributed 25.2 Annual production Crop per cent to the GSDP of Sikkim.
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