MADHYA PRADESH December 2008
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State Economy and Socio Economic Profile
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Madhya Pradesh — a snapshot
• Madhya Pradesh (MP) is located in central India with an area of 308,00 Sq.km. and a population of 60 million. • Madhya Pradesh was originally the largest state in India until November 1, 2000 when the state of Chhattisgarh was carved out of the same. • The State shares borders with Rajasthan, Chhattisgarh, Gujarat, Uttar Pradesh and Maharashtra. • The state is divided into 48 districts (272 tehsils and 313 community blocks). • Forest area of the state constitutes 31 per cent of the area of the total state area and 12.44 per cent of the total forest area of India. • The state‘s central location gives it the advantage of being the hub of India‘s national logistics network. • MP‘s administrative capital is Bhopal and its largest city is Indore.
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Socio-economic snapshot
Parameters Madhya Pradesh
Population (census 2001) Population (2001) 60.3 million
Density (2001) 196 per Sq.km.
Sex ratio (census 2001) 920/1000 males
Principal languages Hindi
Literacy rate (census 2001) 64.1 per cent
Major minerals Copper ore, lime stone, manganese ore etc.
Major industries Cement, textiles ,minerals, edible oil
Major crops Soyabean, gram, pulses like Masoor and Arhar
GSDP at current prices in 2004-05 US$ 23,983.63 million
NSDP at current prices in 2004-05 US$ 9.8 billion
Annual per capita income at current prices in 2004-05 US$ 254
Domestic airports Bhopal and Indore
Sources: Official website of Government of India, www.india.gov.in; Department of Rural Development, Government of Madhya Pradesh
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Economic Profile
• Endowed with large mineral resources of coal, diamond, limestone, methane etc. Madhya Pradesh – NSDP Growth • Ranked amongst the top four states of the country for industrial investments • Gross State Domestic Product (GSDP)
at current prices in 2004-2005 was US$ Billion $ US 24 billion • Growth rate of 5.5 per cent 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 • The per capita GSDP of Madhya Source: Department of Finance, Government of Madhya Pradesh Pradesh is US$ 369 Sectoral Contribution to GSDP • Net State Domestic Product (NSDP) of the state at current prices (2004-05) was US$ 9.8 billion Industries • Minor Forest Produce (MFP), such as 35% Services Tendu leaves, sal wood, teak wood and 41% lak are major contributors to the rural economy of the state.
Agriculture 24%
Source: Review of Madhya Pradesh Economy, CMIE, August 2004 5 www.ibef.org Madhya Pradesh | December 2008
Infrastructure status
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Physical infrastructure (1/3)
Road network
• Total road length in the state is 67,600 Km. • National highways of 5,200 Km. run through the State. • 18 National highways including trunk routes of Delhi- Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad. • The total length of state highways is 9,885 Km. • Convenient linkages to western ports, i.e., Kandla Port and Jawaharlal Nehru Port Trust.
Railway newtork
• Well-connected with the rest of India • Almost 425 trains pass through the state on a daily basis • 175 trains pass through the state capital ‗Bhopal‘ alone
Airports GWALIOR • Convenient air links from key Indian cities to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho. KHAJURAHO • Five operational airports, 25 airstrips BHOPAL • Indore airport has the capability of handling international INDORE JABALPUR cargo • An international airport is proposed at Bhopal
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Physical infrastructure – Power (1/2)
• The installed electricity generation Upcoming projects in MP (indicative) capacity of Madhya Pradesh is 6,449 Thermal Power projects MalwaTPS Purni, Dist. 2X500 MW MW. Khandwa • 95.66 per cent of MP‘s electricity Essar Group Project Mahan coal field 1000 MW at Sidhi-Singrauli generation capacity is based on thermal fields energy, with the remaining from hydel Jaypee Group Siddhi 1000 MW sources. Sanjay Gandhi, - 500 MW • On a per capita basis, electricity Birsinghpur – Unit V consumption in Madhya Pradesh stands Amarkantak - 210 MW at 352 kWh per annum, close to the extension national average of 355 kWh per annum. Jindal Group - NA Hydel Power Projects Power fact file for MP Marhikheda hydro Shivpuri. 1x20 MW Power generation installed capacity 6,449.25 MW project, extension
Power generation 24834 MU Tawa HEP (M/s Hoshangabad 13.5 MW Hindustan Electro Total power available 50679 MU Graphite) Coal bed methane Per capita power consumption 352kWH/annum Reliance Energy Shahdol - Source: www.indiastat.com
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Physical infrastructure – Power (2/2)
Projected Generation Capacity (MW)
225000
200000
190000
155000
126838 120000
85000
50000 2006 2012
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Physical infrastructure – Telecom
Telecom fact file for Madhya Pradesh No. of cellular mobile subscribers 8,87,990
Number of Telephone exchanges 2,791
Tele density 3.9
Working DELS 23,57,660 ( Wired-12,03,458, WLL 2,66,212 and GSM 8,87,990)
OFC route length (in Kms) 27,222.7
Working internet connections 1,51,999
Working broad band connections 34,096
Source: www.mp.bsnl.co.in
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Social infrastructure - Education
• Ranked 12th on the Human Educational institution Number Development Index Primary schools 87,620 • Literacy levels in the state have improved from 44.2 per cent in 1991 to Higher secondary schools 8,481
the current level of over 64.1 per cent Degree colleges 250 • 45 engineering colleges, over 200 technical training institutes, six medical Universities 9 colleges and 43 management institutes Polytechnic institutes 79 • Key national institutes in the state Industrial training institutes 200 include: – Indian Institutes of Management (IIM) Engineering colleges 45 ,Indore Medical colleges 6 – Indian Institute of Forest Management
– Indian Institute of Hotel Management Source: www.indiastat.com, 2006 – International Institute of Professional Studies, Indore
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Social infrastructure - Health
• Network of health facilities comprises Health institution Number
145 hospitals, 343 community health District hospitals 145 centres, 1,705 primary health centres. • It also has 34 Ayurvedic and four Sub-centre 20,521 homoeopathic hospitals. Primary health centre 1,705 • The number of in-patient beds in MP‘s Community health centre 343 hospitals is 20,839. Ayurvedic hospitals 34
Unani hospitals 204
Homeopathic hospitals 4
Source: Ministry of Health and Family Welfare, GoI, March 2006
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Industrial infrastructure - key clusters (1/3)
Gwalior AKVN • Through the Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd Bhopal AKVN Rewa AKVN
(MPAKVNs) scheme, the state Malanpur, Malanpur Phase Indore AKVN II, Banmore, Chainpura, government has identified several Siddhgawan, Pratappura industrial clusters. Several industrial Rewa, giants have their establishments in these Waidhan areas, however 44 per cent of the Mandideep, developed area is still untapped and Pillukhedi, Borgaon, open to investment. Mandideep Maneri, Pithampur, Kheda, Phase II Purena Dewas, Maksi, Megh Nagar Total developed area 7,147 Hectares Jabalpur AKVN Total allotted area 3,089 Hectares
Total units established 1,360
Growth centres 19
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Industrial infrastructure - key clusters (2/3)
Indore AKVN Gwalior AKVN • Area developed: 2,492 Hectares • Area developed: 2,262 Hectares • Allotted: 1431 Hectares • Allotted: 800 Hectares • Units established: 575 • Units established: 326 • Major groups: Tata, Ranbaxy, Eicher, Bridgestone, • Major groups: JK, Surya Roshini, Godrej, Grasim, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Cadbury, Hotline, Crompton Greaves Nicholas Piramal, Indorama, IPCA, Bhilwara • Special infrastructure: ICD, Food Park • Special infrastructure: SEZ, Crystal IT Park, Food Park, Apparel Park
Bhopal AKVN JabalpurAKVN • Area developed: 1,330 Hectares • Area developed: 790 Hectares • Allotted: 618 Hectares • Allotted: 125 Hectares • Units established: 286 • Units established: 52 • Major groups:HEG, Crompton Greaves, P&G, Godrej, • Major groups: Raymond, Hindustan Petroleum, PBM, Lupin, IFB, Oswal, Nahar Ayur • Special infrastructure: ICD, Food Park • Special infrastructure: Stone Park, Food Park
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Industrial infrastructure - key clusters (3/3)
Rewa AKVN • Area developed: 273 Hectares • Allotted: 115 Hectares • Units established: 121 • Major groups: Birla, Jaypee • Special infrastructure: Integrated infrastructure development centres (IIDC)
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State policy and Incentives
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State level policies (1/3)
Industrial Promotion Policy 2004 • The Industrial Promotion Policy would to attract NRI and foreign investment by be effective for five years from April 1, developing world-class infrastructure 2004. – To create a congenial environment for the • The new policy envisages creating an development of small, medium and large industries industry-friendly administration, – To ensure balanced regional development maximising employment opportunities, by generating employment in the non-farm tackling industrial sickness, rationalising sector rates of commercial taxes and bolstering – To chalk out special packages for removing private sector participation. industrial sickness • Objectives of the Policy – To integrate different employment-oriented – To make state administration and industry schemes in order to provide employment friendly by simplifying rules and opportunities on a sustainable basis procedures – To accelerate the pace of industrialisation and make Madhya Pradesh a leading industrial state – To maximise employment prospects
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State level policies (2/3)
IT policy – 2006 pest resistant seeds for agriculture and horticulture crops suited to different agro- • Improve the life of the common man by climatic zones leveraging the strengths of e-Governance • Improvement of the quality of livestock and • Attract investment in the sector so that the poultry, especially the breeds indigenous to educated youth is able to contribute to the the state development of the State • Enhancement of the productive potential of • Create a pool of highly skilled the aquatic eco-system professionals who are at par with the best • Promotion and cultivation of medicinal and in the country aromatic plants. Also, processing value • Transforming MP from a resource- based addition of their produce. economy to a knowledge -based • Production of cost effective drugs that help economy. counter diseases common in the tropical and sub-tropical regions of the country Biotechnology policy – 2003 • Promote environmentally safe technologies to reduce pollution, and above all-treatment • Conservation of the state's biodiversity of urban waste and industrial effluents and the sustainable use of its biotic • Afforestation and especially the quick revival resources of species which have shown a tendency to • Production of high-yielding, draught and decline.
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State level policies (3/3)
Special economic zone policy Tourism policy • Exemption of all state and local taxes • Improvement and creation of adequate and levies for transactions with the basic infrastructure SEZ and for supply from domestic tariff • Special package of incentives for tourism areas to the SEZ industry including exemption from luxury • Exemption from stamp duty and tax, sales tax and entertainment tax for registration fees new projects up to 10 years. • Grant of labour, energy, environment, • Designation of 25 tourist circuits for industrial health and safety-related commercial tax exemption for tourist permits and approvals through a vehicles dedicated single window mechanism. • Exemption from electricity duty, cess and any other tax or levy on sale of electricity for self-generated and purchased power. • Expeditious process for land acquisition to set up SEZs.
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Power sector: policy environment(1/2)
Policy initiatives by GOI Key GOI initiatives under the Electricity Act 2003 • 100 per cent FDI is allowed under the automatic approval route in all segments • Generation other than for large hydro of the industry, i.e., generation (based projects, is de-licensed on coal, gas, or hydro), transmission and • Open access on transmission and retail distribution. distribution networks • Retail competition mandates that by July • Under the Mega Power Policy, 2008 all consumers above one MW are incentives such as capital import duty free to choose their suppliers concessions, waiver of local levies to • For rural power development, generation improve cost attractiveness are and distribution is de-licensed in rural extended to large generation projects areas • All power projects are extended a tax • Power trading and market development holiday, i.e., deduction of 100 per cent of are being recognised profit of the generation, transmission or • Strong anti-theft and malpractice distribution company, for 10 consecutive provisions years out of 15 years from the year of • Functional unbundling of the integrated commencement. state electricity boards and setting up of State electricity regulatory commission made mandatory by states.
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Power sector: policy environment (2/2)
State policy initiatives • Competitive bidding for awarding projects • Incentives for mega power projects • Relaxation of 40 per cent cap for debt exposure by Indian financial institutions • Inter institution group for speedy financing • Encouragement to FDI in transmission via Joint Venture route and Independent power Transmission Company Route • National Electricity Policy and National Tariff Policy notified
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State level incentives
Special incentives • Special package for mega projects on • Entry tax exemption for five years project basis by apex level empowered • Five years electricity duty exemption on committee headed by the Chief Minister captive power generation • Industrial investment promotion • 15 per cent capital subsidy to SSI up to assistance – 50 to 75 per cent of US$ 33,000 in backward areas commercial tax for three to 10 years. • Infrastructure grant up to US$ 0.22 • Concessional registration charges and million for developing private sector stamp duty exemption for term loans industrial parks • Interest subsidy on term loan for five • Partial reimbursement for Project report, years at three to five per cent. ISO certification, patent and technology • For thrust sector industries, 25 per cent purchase cost capital subsidy would be provided limited up to a maximum of US$ 56,000 • Land on 75 per cent concessional rate for mega projects limited to US$ 4.4 million.
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Business Opportunities
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Thrust areas of the state (1/11)
Auto and auto components Textiles • The size of the auto component industry • A large number of cotton textile mills are in the state is around US$ 306 million. clustered around Indore, Ujjain, • 60 per cent of the auto industry in MP is Burhapur etc. dominated by auto component players. • Major textile players include Bhilwara, • The state has developed an industrial Indo-Rama, Bhaskar, S.Kumar‘s, Oswal cluster at Pithampur which provides and Parasrampuria. readily available infrastructure for • To further support the business companies to set up manufacturing endeavours Government of Madhya facilities in the state. The estate is Pradesh has created specialised spread over an area of 5,000 hectares. infrastructure in the form of Apparel • The Union Government of India has parks. sanctioned an auto cluster in the Pithampur industrial area. • The Government of India will grant an amount of US$ 11 million for the same.
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Thrust areas of the state (2/11)
Cement Tourism • Total reserves of limestone is 3625.98 • The tourism sector in MP has been million tonnes spread across more than identified as one of the key propellers of 15 districts. growth by the State Government. • The domestic tourist inflow has been • Seven major cement plants are approximately eight million in 2005-06. operating in the state with an annual • The foreign tourist arrival was relatively installed capacity of 15.97 million less at 0.16 million. tonnes. • The State government has sanctioned • MP State Industrial Development US$ 12.2 million for development of 17 Corporation has forecasted that Damoh- tourist spots across the State. Panna area, and Bela-Pagra of Rewa • The government is also making concrete have limestone deposits worth eight efforts to improve air connectivity, million tonnes and 20 million tonnes between MP and other Indian states. respectively. • The state has taken initiatives to • An estimated scope of further promote eco and adventure tourism and investment to the tune of US$ 2.5 billion is also keen on promoting medical/ exists in this sector in the state. herbal tourism in association with private parties.
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Thrust areas of the state (3/11) Domestic tourist arrivals in MP Major tourist places Very high increase due to Maha Kumbh Mela • Kanha is the largest wildlife sanctuary in (once in 3 years) Asia. • Khajuraho has some of the most famous sculptures in the world. • Bhimbeteka has the oldest cave paintings in the world • Sanchi houses the oldest Buddhist stupa in the world. 2002-03 2003-04 2004-05 2005-06 • Nine national parks and 25 game Foreign tourists arrivals in MP (in thousands) sanctuaries
Source: MP Tourism Development Corporation 26 www.ibef.org Madhya Pradesh | December 2008
Thrust areas of the state (4/11)
Agriculture • Several AEZs (Agri Export Zones) have • MP‘s share in the total national been set up for facilitating export of production of peas is 15 per cent. specific products from a geographically • It‘s the largest producer of soyabean, contiguous area. gram and second largest producer of • The commodities that have high lentil, oilseeds and Jowar. potential include potato, spices (in the western parts), pulses (in the central The state‘s multiple cropped area is about 24 per cent part of the state), wheat (in the western which can be utilised for cultivation at any given time of the year and irrespective of the season. and central regions) and oranges (south districts). Agri Export Zones in MP for various products/ crops • Of the total gross cropped area, 59 per cent is sown in the Kharif season while the other 41 per cent is sown in the Rabi season. • Apart from accounting for the 37 per cent of the total national production, Madhya Pradesh is the leading producer of garlic. Wheat Seed spices, coriander and fenugreek Pulses Oranges Potato, onion and garlic 27 www.ibef.org Madhya Pradesh | December 2008
Thrust areas of the state (5/11)
IT / ITeS sector • IT/ITeS sector - Exports: • The state has set up over 24,000 Km. of – IT/ ITeS exports from MP are US$ 655 million – Software exports: US$ 11 million ; IT-enabled optical fibre backbone to cover all its 313 services: US$ 644 million developmental blocks across 45 districts. • Four Software Technology Parks (STP IT Parks Location units) to be set up in Bhopal, Indore and Crystal IT Park (5,50,000 Sq. ft.) Indore Gwalior-are in the pipeline. Hardware and software technology Park (200 acres) Bhopal • 38 IT engineering colleges provide the Software Technology Park (1,00,000 Sq.ft.) Indore learning ground for future IT professionals. IT Park (50 acres) Gwalior • Home to country‘s first Indian Institute of Major IT Players in MP Location Information Technology and Management Taurus Indore SEZ (IIITM) at Gwalior. Fujitsu Bhopal • Large IT players like HCL and Genpact HCL (proposed) Bhopal have shown interest in setting up the Genpact (proposed investment of US$ 34 million) Bhopal facilities in the state. Proposed/existing projects in MP • Genpact India has proposed to set up a IT Park 7,000-seat BPO facility on 50 acres in Bhopal, with an investment of US$ 34 million. STP Indore Hardware & Technology Crystal IT Park Park
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Thrust areas of the state (6/11)
Forest-based industries • Madhya Pradesh has a forest area of • The average annual production of Tendu 94689.38 Sq.km. and constitutes nearly leaves in the state is around 2.5 million 31 per cent area of the state. standard bags. • With a share of nearly 13 per cent of • MP accounts for nearly 25 per cent of all the total forest area of the country, MP Tendu leaves produced in India. has the largest forest covered area • Sales of forest product generated among all the states in India. revenues of US$ 109 million in 2005- • Forest-based industries are key 2006. contributors to the state‘s economy and also provide employment to a greater part of the population. • From 2004 to 2005, forests and logging contributed 2.1 per cent to the state GDP. • The total growing stock (volume of timber/wood) in MP is 50 million Cu.mt. valued at US$ 55.5 billion.
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Thrust areas of the state (7/11)
Forest map of MP: Classification of MP land mass
Forest 31%
Non-forest 69%
Reserved 65.36 Protected 32.84 Unclassified 1.70
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Thrust areas of the state (8/11)
Mineral and stores • Rich and vast mineral deposits include • The state's a major producer of coal, diamonds, slate, pyrophyllite, diaspore, diaspore, pyrophyllite, manganese, coal, limestone, copper ore and dolomite, glass sand and fire clay. manganese among others. Besides, the Mineral- No. state also has favourable geological and based of Location geotectonic settings. industry units
• Active mining of these minerals is Cement 7 Rewa, Satna, Damoh, generating revenue of more than US$ Katni, Neemuch Shahdol , Umaria, Sidhi, 118.65 million per annum. Thermal power 10 Satna, Betul, Damoh, • MP is the sole producer of diamonds in Katni, Rewa, Ujjain India. Hydrated lime 25 Katni and Satna • It possesses 41.36 per cent of the total Slate pencil 155 Mandsaur national reserves of copper ore. Roofing (Manglore) tiles 8 Hoshangabad, Balaghat • Thickest coal seam (135m) of Asia is found at Singrauli coalfield in Sidhi district.
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Thrust areas of the state (9/11)
Reserves of important minerals of MP’s mineral-wise revenue (2004-2005) MP v/s rest of India Total Minor Minerals (US 100%
$ 11.38 mn)
144
44.3
18205
6267.01 1867.53
80% 294.7
13.35 1334.35 60% Total Major Minerals (US$ 151.67 40%
mn)
1434 (bcm)1434
240748(mntons) 406.19 (mn tons)(mn 406.19 169941.17 (mn tons)(mn 169941.17 Minerals US$ (‘000) Minerals US$ 20% tons)(mn 7348.63
712.52 (mn tons)(mn 712.52 (‘000) 22.59 (mn tons)(mn 22.59 Coal 118656 Ocher 4 0% carats)(‗000 1334.35 Limestone 26500 Bauxite 280
Coal Copper ore 2044 Rock Phosphate 144 Dolomite
Diamond Manganese 927 Pyrophillite/diaspore 178
Limestone Copper ore Copper
Diamond 929 Calcite 4 Manganese ore Manganese
Coal bedCoalmethane Dolomite 229 Shale Slate 2
Pyrophyllite & diaspore & Pyrophyllite Laterite 89 Kaolin 7 All India MP Fire Clay 116 Other minerals 1582 Source: Directorate of Geology & Mining, MP Source: Directorate of Geology & Mining, MP 32 www.ibef.org Madhya Pradesh | December 2008
Thrust areas of the state (10/11)
Power sector • Ultra Mega Project in MP Energy demand projections in MP – The Central government is setting up Ultra 72145 Mega Power Projects in five locations in the 67799 country. 63715 59876 56270 – The project has been first initiated in MP 52880 and is at an advanced stage of 49695 establishment. – Sasan in MP, a pithead location based on domestic coal availability (while other proposed plants would be imported fuel- based) is identified for setting up this project. – Project would require an investment of
about US$ 3.3 billion. 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 – The project would utilise super critical technology to ensure higher efficiency and lower CO2 emissions.
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Thrust areas of the state (11/11)
Power sector Upcoming projects in MP (indicative) • Major private players such as Reliance, Thermal Power projects
Essar and Jaypee Group have Purni, District MalwaTPS 2X500 MW acknowledged the potential of MP and Khandwa have proposed investment plans in the Essar Group Mahan coal field at 1000 MW state. Project Sidhi-Singrauli fields Jaypee Group Siddhi 1000 MW Hydel Power projects
Marhikheda hydro project, Shivpuri. 1x20 MW extension Tawa HEP (M/s Hindustan Hoshangabad 13.5 MW Electro Graphite) Coal bed methane
Reliance Energy Shahdol
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Key Players
• The state houses around 1,800 export a variety of products and services companies and 19 industrial growth to both developed and developing centres that are located near major countries. cities. This makes good social infrastructure easily accessible to industrial units. • There are around 171,000 small-scale units that contribute significantly to the state‘s economy. • MNCs such as Cadbury, Bridgestone, Hindustan Lever, Coke and renowned Indian companies such as Ranbaxy, Tata, Grasim, Hindustan Motors, Eicher, Kinetic, Raymonds, Ruchi Soya, Lupin, Crompton Greaves, Godrej, and several other big groups have their presence in Madhya Pradesh. • Apart from meeting the local requirements, these companies also
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Key players: IT/ITeS
Infosys Wipro Genpact Accenture
• Set up in 1981. • Established in 1945. • Set up in 1997. • Set up in 1997. • Accenture India, the wholly- • Revenues of US$ 4.18 billion • Revenues of US$ 4.97 billion • Formerly known as GE in 2007-08 recording a 35 per Capital International owned subsidiary of the in 2007-08 recording a 36 cent growth over revenues of Services. $16.65-billion global US$ 3.12 billion in 2006-2007. per cent growth over • The company has recorded management consulting and revenues of US$ 3.56 billion a turnover US$ 600 million • Areas of IT consulting, outsourcing firm. modular global sourcing, in 2006-2007. during 2006. • Total 35,000 employees ; • Provides a wide range of process re-engineering, and • Areas of IT services, product BPO services. business process, 10,000 in the BPO (business engineering, technology technology and knowledge process outsourcing) space • Has operations in Australia, infrastructure services, BPO services, including Finance China and US. and other consulting and the remaining 25,000 & Accounting, Collections & solutions. people in the business • Marketing and technological Customer Relations, consulting and systems alliances with FileNet, IBM, • Provides services such as Insurance, Procurement & Intel, Microsoft, Orcale etc. application development, Supply Chain, Analytics, integration and technology • Capacity of over 60,000 seats deployment & maintenance, Software, IT-Infrastructure. divisions to serve global and is in the process of adding business intelligence, CRM. • Presently the company clients. another 30,000 seats. • Based out of Bangalore, the employs about 20,000 • Bangalore operations has • Has operations at multiple company has 54 professional .Bangalore three centres with around centre has about 1500 locations in Bangalore and development centres and 30 8,000 employees. Mysore in Karnataka. offices spread across India, employees. N. America, Middle East and Europe.
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Key players
ACC Ltd. Cadbury India Ltd. Coca Cola India Nicholas Piramal India Ltd.
• ACC is one of the largest • Cadbury India is a • Coca-Cola India, one of the • One of India‘s leading cement manufacturing subsidiary of Cadbury largest companies in the pharmaceutical and companies in India, with a Schweppes, the world‘s beverage market, has healthcare companies. cement production capacity largest confectionery and invested more than US$ • NPIL ranks fourth in of 16 million tonnes per third-largest soft drinks one billion in India over the domestic formulations annum. company. past decade. sales and second in total domestic pharmaceuticals • ACC is a pioneer in cement • Cadbury India had sales of • In Madhya Pradesh, Coca- sales. and RMC over US$ 150 million in Cola has a plant at • Its Pithampur plant in • The company has a 2003. Pilukhedi in Raisen district, Madhya Pradesh is countrywide distribution near Bhopal. • The company employs accredited by reputed network and manufactures • The company plans to nearly 2000 people across all types of cement. invest US$ 6.7 million for organisations such as India expanding the operations Allergan, Novartis, Solvay • In Madhya Pradesh, ACC and VAX.. • Cadbury India has one of of its plant at Pilukhedi. has a 1.7 MTPA cement • Besides strengthening its its main production plants plant at Kymore and plans to manufacturing facilities, it at Malanpur, near invest US$ 3.3 million to also plans to invest US$ 45 Gwalior. expand its manufacturing million to enhance its R&D capacity of roofing products. activities. • This will increase its production from 68,000 tonnes of asbestos roofing to 78,000 tonnes.
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Key players
Procter & Gamble Birla Corporation Ltd. Eicher Motors Ltd
• Procter & Gamble, India is • Birla Corporation Ltd. is • Eicher Motors, part of the US$ 355 million one of the country‘s most the flagship company of Eicher Group, is a major player in the Indian established and fastest MP Birla Group. automobile industry. growing FMCG • The company‘s main companies. areas of business include • Manufactures and markets commercial jute, cement, synthetic vehicles with Gross Vehicle Weight (GVW) • The company has a yarn, calcium carbide, ranging between five to 25 tonnes. turnover of over US$ 200 industrial gases, PVC million. coated fabrics, PVC floor • One of the leading manufacturers of • The company has a hi- coverings, auto trims, commercial vehicles in India tech detergent healthcare and education. • Manufacturing facility is at Pithampur, manufacturing plant in the • Birla Corporation has joint Madhya Pradesh. This state-of-the-art plant Raisen district of the ventures and has a total area of 72 acres with 18,000 Sq. state. collaborations with world leaders such as DLW AG mt. as the covered area. of Germany, Rhone • The plant houses top-of-the-line equipment, Poulenc of France, a robust infrastructure and has an annual Sweden-based Ericsson production capacity of 30,000 vehicles. Cables & AB and ABB, GE,Toshiba and AEI • Recently invested US$ 22 million for the Cables. manufacture of heavy commercial vehicles at its Pithampur plant.
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Doing Business
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Key approvals required
List of approvals and clearances required Departments to be consulted Prior to setting up the unit Registration District trade and industries centre Allotment of land/shed District trade and industries centre Permission for land use District authorities No objection certificate under water and air Act Madhya Pradesh pollution board Approval for construction activity and building plan Development authority No objection certificate Fire department Provisional trade tax registrations Central and state excise departments Registration under central sales tax Act 1956 Central and state excise departments Before commencement of production No objection certificate under of water and air Act Madhya Pradesh pollution l board No objection certificate Fire department Permanent trade tax registration under Central and state excise departments Registration under central sales tax Act 1956 Central and state excise departments After commencement of production/activity Registration Industries department 40 www.ibef.org Madhya Pradesh | December 2008
Average cost of doing business in the state
Sector Cost*
1. Manufacturing
A. Land price (US$/Sq. mt.) 4.8 - 28.7
2. Electricity (US cents) 0.086 - 0.124
3. Office space rent (US$/Sq. mt./month) 0.48 - 0.96
4. Residential rent (US$/three bedroom flat/month) 268 - 335
5. Five-star hotel room (US$/night) 76.6 - 95.7
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Overall business climate
Overall business climate – Madhya Pradesh • 31 per cent of the state is under forest cover with a largely unexploited species of rare, valuable medicinal-herbal plants • Over 2,000 Km. of roads being developed with Private Partnership (BOT)
• India‘s first operational Greenfield SEZ at Indore.
• Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc.
• Third-largest producer of cement in India
• Various blocks available for power, cement, iron and steel units
• Over 18,000 technical graduates and 230,000 graduates add to workforce each year.
• 12 blocks with reserves totaling 2,585 million tonnes of coal has been identified
• Over 144 BCM of coal bed methane reserves available
• Largest producer of pulses and oilseeds in the country (75 per cent of soyabean production)
• Favourable climatic conditions for cotton and over 40,000 power-looms driving the textile industry
• Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investors
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Overall State Competitiveness
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Advantage Madhya Pradesh (1/2)
Destination – Madhya Pradesh
Ranks third in terms of Fastest mover in law and order. infrastructure development. Delhi (740 Km.) (MPV - 789.5) Fastest mover in Ranks second in terms of agriculture. governance.
Ahmedabad (570 Km.) Fastest mover in overall Being centrally located, (MPV - 220.63) performance among the the state is easily Kolkata large states in the country. accessible for all the key Mumbai (1350 Km.) consumer markets in the (780 Km.) (MPV - 613.19) (MPV - Pune country. 1000) (800 Km.) Hyderabad (MPV - 206.51) (840 Km.) (MPV - 257.9) Cost of skilled labour is Key markets US$ 2.4/day vis-à-vis US$ Source: (Reference: RK Swamy) Bangalore Chennai (Distance from Bhopal) 3.5 to 4.0/day in metros. (1400 Km.) (1430 Km.) (MPV - 254.52) (MPV - 362.84) MPV – Market Potential Value * Fastest mover is the state where the rate of improvement between 2003 & 2006 was greater than that between 1991 & - Distances rounded off 2003
**Source: India Today (September ‘06 Issue)
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Advantage Madhya Pradesh (2/2)
Savings in office space rates Savings in Land cost (A comparison of rates in central business districts) (Estimated value for multi-product SEZs)
Vishakapatn Mumbai am 150 100
Ahmedabad Delhi 80 100 60 Indore Chennai 50 40 Bhopal Bangalore 20
0 0
Greater Indore Chennai Jaipur Noida
Hyderabad Pune Chandigarh
Bhopal and Indore have substantial cost The cost of land is one of the lowest in the advantages, when compared with other tier III and country. Even central hubs such as Indore and IV cities. Bhopal fare well against other cities in terms of low land cost.
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Overall state competitiveness (1/2)
Parameter Madhya Pradesh Opportunities in type of industry
Tourism High IT-based industries Medium Food processing industry High Pharmaceuticals and bio-tech Low Agro-based industry High Mineral-based industry High Engineering industry Medium Chemicals industry Medium Handloom and handicrafts sector Low Industrial infrastructure – existing and proposed
Power High Transportation High Industrial estates/areas High STP/IT parks Medium
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Overall state competitiveness (2/2)
Parameter Madhya Pradesh Policy incentives
Setting up and carrying out business High Industrial infrastructure – existing and proposed
EPZ High IIDC High Industrial growth centre High Food processing park High
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