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Confederation of Indian Industry Invest North 2013 A CII-KPMG study Uttar Pradesh State Profile August 2013 Uttar Pradesh: a snapshot Uttar Pradesh (UP) is the biggest state economy in the northern region with a share of approximately 31 percent in the region’s GDP. It is mainly driven by the services sector and within the services sector, trade, hotels, real estate, transport, storage and communications are the prominent sectors Source: Find Data website, www.finddata.in, accessed on 12 August 2013 © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 1 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Uttar Pradesh: a snapshot (cont.) Overview Geographic and demographic indicators ■ Geographical area (sq Km): 240,928 ■ Total population (million): 199.6 ■ Population density (persons per sq Km): 828 ■ Literacy rate (percent): 69.7 Economic indicators* ■ GSDP: INR4,451.7 billion (USD81.8 billion) in FY13 compared to INR3,222.1 billion (USD80.1 billion) in FY08, CAGR of 6.7 percent ■ GSDP composition (FY13): Agriculture (21.9 percent), Industry (23.2 percent), Services (54.9 percent) ■ Sector-wise CAGR (FY08-FY13): Agriculture (3.0 percent), Industry (4.6 percent), Services (9.5 percent) ■ Per capita income (FY13): INR18,891 (USD347.3) *At constant 2004-05 prices, GSDP and per capita income data is as of 1 August 2013, GSDP composition and sector-wise CAGR data is as of 27 February 2013 Sources: Census 2011; MOSPI; Find Data website, www.finddata.in, accessed on 12 August 2013 © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 2 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Uttar Pradesh: a snapshot (cont.) Physical infrastructure Units ■ Installed power capacity, June 2013 (MW) 14,294 ■ Road length, March 2011 (Km) 390,256 ■ No. of domestic airports, April 2013 6 ■ Wireless subscribers, April 2013 (million) 122.0 ■ Wire line subscribers, April 2013 (million) 1.7 Investment ■ FDI: INR16.4 billion (USD351 million) during April 2000-May 2013 Trend in FDI Inflow (USD million) (This is aggregate for UP and Uttarakhand) 140 112 48 31 FY10 FY11 FY12 FY13 Sources: CEA; TRAI; DIPP and CMIE; Find Data website, www.finddata.in, accessed on 12 Note: aggregate of Uttar Pradesh and Uttarakhand FDI August 2013 Source: DIPP © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 3 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Uttar Pradesh: a snapshot (cont.) Opportunities Infrastructure IT/ITeS Sugar Food Processing Tourism Solar Power The State Government has announced several new policies to promote private investments across sectors including industry, infrastructure, IT, food processing, solar energy and poultry Policy Key highlights Infrastructure and Envisions establishing UP as the most preferred investment Industrial Investment destination by accelerating industrial development, creating a Policy, 2012 conducive business environment and developing high-end infrastructure facilities in order to create new employment opportunities Solar Power Policy, 2013 Aims at promoting generation and use of clean and green energy in the state by harnessing solar energy. Also, targets at stimulating private sector participation in the sector IT Policy, 2012 Aims at using IT as a vehicle for economic development of UP with inclusive growth to create a vibrant society with a high quality of life Source: Udyog Bandhu ; Find Data website, www.finddata.in, accessed on 12 August 2013 © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 4 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Sector-wise opportunities ‒ Infrastructure Key highlights of the sector ■ Accounts for about 9.45 percent of the total National Highway (NH) network ■ Largest railway network in the country spanning over 8,763 Km ■ Six domestic airports at Agra, Allahabad, Gorakhpur, Kanpur, Lucknow and Varanasi; one international airport at Lucknow ■ 165-Km six-lane Yamuna Expressway was recently inaugurated reducing the distance significantly between New Delhi and Agra ■ 5.14 Km long Buddh International Circuit in Greater Noida, spread across an area of 875 acres, is India’s first circuit for F1 motor racing Key enablers ■ Attractive fiscal incentives offered under the Infrastructure and Industrial Investment Policy, 2012: − 100 percent stamp duty concessions given to private sector infrastructure development projects excluding PPP projects − Reimbursement of 25 percent of stamp duty, if a private developer completes development of industrial estate or area within three years of purchasing land out of which at least 50 percent land is sold Sources: Udyog Bandhu; Yamunaeway.com; “UP seeks fresh proposal from Jaypee on Ganga Expressway”, Business Standard, 14 March 2013 © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 5 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Sector-wise opportunities ‒ Infrastructure Key enablers (cont.) − Infrastructure interest subsidy scheme: Interest on loan taken by industrial units for developing infrastructure facilities for self-use, such as road, sewer, water drainage and power line will be reimbursed at the rate of 5 percent points with a ceiling of INR10 million/annum for a maximum period of five years ■ Established Udyog Bandhu, which is an industrial development agency to facilitate investment, operation and establishment of industrial undertakings in UP Existing companies ■ Jaypee Group, Reliance Infrastructure, DLF, Gayatri Projects, SEW Infrastructure Success stories Jaypee Infratech ■ Noida, UP-based Jaypee Infratech is an infrastructure development company which was founded in 2007 ■ It has successfully developed 165 Km long six-lane access controlled Yamuna Expressway in UP connecting Noida and Agra ■ The company has also been awarded 1,047km long Ganga Expressway Project (GEP), which will connect Greater Noida and Ballia Sources: Udyog Bandhu; Yamunaeway.com; “UP seeks fresh proposal from Jaypee on Ganga Expressway”, Business Standard, 14 March 2013 © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 6 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Sector-wise opportunities ‒ Infrastructure (cont.) Sector opportunities ■ Investment worth INR230 billion planned for 2,500 Km of state highway projects ■ 6,730 Km identified as core network by the World Bank, of which 2,466 Km has been developed by UP Public Works Department (UPPWD) ■ Concession agreement signed for four roads of 463 Km, costing INR38.7 billion ■ Feasibility study has been completed and proposals for VGF are being sent to the Central Government for 11 roads of 977 Km, costing about INR71.3 billion ■ 11 hi-tech townships and 31 integrated townships are being developed by private developers in major cities of the state ■ One National Manufacturing Investment Zone being planned each in Jhansi and Auraiya ■ Airports on PPP model – near Agra in the vicinity of Delhi Mumbai Industrial Corridor (DMIC) to provide facility of dry-cargo transport along with aircraft maintenance hub and at Kushinagar in eastern Uttar Pradesh to promote industrial development and tourism ■ DMIC: Immense opportunities for development of an industrial corridor along the alignment of dedicated freight line ■ The Government of UP (GoUP) envisages Industrial Estates and Logistic Hubs along Eastern Dedicated Freight Corridor (EDFC) Source: Udyog Bandhu © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 7 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Sector-wise opportunities ‒ Infrastructure (cont.) Key infrastructure projects in PPP Project Size capacity Project cost (INR billion) UP State Highways Authority Delhi-Saharanpur-Yamunotri Road (SH-57) 206 Km 17.2 Varanasi - Shaktinagar (SH-5A) 115 Km 12.1 Pallia – Shahjahanpur – Hardoi – Lucknow 162.4 Km 12.9 Road (SH-25) Akbarpur – Tanda – Jaunpur – Mirzapur – 237 Km 18.7 Dudhi Road (SH-05) Yamuna Expressway Development Authority Yamuna Expressway Construction (Noida to 165 Km 103.7 Agra – 165 Km long) UP Expressways Industrial Development Authority 08-Lane Access Controlled Expressway from 1,047 Km 300 Greater Noida to Ballia 06-Lane Access Controlled Expressway from na 95.5 Agra to Lucknow 08-Lane Access Controlled Expressway on the 148 Km 89.1 right bank of Upper Ganga Canal from Sanouta Bridge (Greater Noida) to near Purkaji (Dist Source: Udyog Bandhu Muzaffarnagar) © 2013 KPMG Global Services Private Limited, a company incorporated under the laws of India and a member firm of the KPMG network of independent member 8 firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Sector-wise opportunities ‒ Infrastructure (cont.) Key infrastructure