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Madhya Pradesh INDIAN STATES Economy and Business Madhya Pradesh www.ibef.org Published by INDIAN STATES Economy and Business Madhya Pradesh www.ibef.org CONTENTS Executive Summary 5 Economic Snapshot 7 The State Economy 9 Infrastructure 10 Social infrastructure10 Access infrastructure 10 Communications infrastructure 12 Industrial infrastructure 12 State Policy 13 Industrial policy 13 IT policy 13 Tourism policy 14 Biotech policy 14 SEZ policy 14 Infrastructure policy 14 Business Opportunities 16 Key industries 16 Exports 17 Investment 17 Potential hubs for investment 19 Key Players 20 Doing Business in Madhya Pradesh 23 Indicative list of approvals and clearances 23 Cost of setting up business 24 Contact for information 24 A report by PricewaterhouseCoopers Pvt Ltd for IBEF MADHYA PRADESH PAGE 5 Executive Summary Madhya Pradesh, in its present form, came into companies are investing in establishing/expanding existence on November 1, 2000, following its their production base in the state. bifurcation to create the new state of Chhattisgarh. With a Net State Domestic Product of The cost of basic infrastructure and skilled manpower US$ 9.8 billion, Madhya Pradesh is the ninth largest is relatively low in Madhya Pradesh.The state offers state economy in India.The state’s central location one of the lowest ratios of labour cost to sales ratio gives it the unique advantage of being the hub in the country. in India’s national logistics network. The state government has developed a greenfield Key industry sectors in Madhya Pradesh are cement, Special Economic Zone at Indore. It has also textiles, mining and edible oils.The state is one successfully leveraged private investment in transport of the largest producers of cement in the country infrastructure.The state government has been taking and a leading producer of edible oils. steps to strengthen and reinforce a conducive investment climate for potential investors through Industries with potential for significant development progressive policies, simplification of procedures and in the state are automobiles and pharmaceuticals. investment incentives. A number of automobile and pharmaceutical Industrial Centres in Madhya Pradesh MADHYA PRADESH PAGE 7 An Economic Snapshot Capital Bhopal Area (sq km) 308,000 Population (2001) 60.3 million Literacy rate (%) 64.1 Human Development Index 0.394 (All India rank 12th) NSDP (US$ billion) 9.8 NSDP growth (%) (10 years) 2.6 Per capita income (US$) 254 Exports (US$ million) 667 National highways length (km) 4,664 Rail length (km) 5,992 Domestic airport Bhopal, Indore Key industries Cement Textiles Minerals Edible oil Industries with growth potential Automobiles Pharmaceuticals Advantage Madhya Pradesh n Leading producer of cement, textiles and edible oils n First state to develop a greenfield Special Economic Zone n Track record of attracting private investment in transport infrastructure n Potential for developing automobile and pharmaceutical industries n Relatively low cost of labour and infrastructure n Rapid improvement in social development indices MADHYA PRADESH PAGE 9 The State Economy Madhya Pradesh - Sectoral Contribution to GDP Between 1994 and 2003, the compounded annual growth rate of bifurcated Madhya Pradesh’s real NSDP was 2.6 per cent, increasing from US$ 7.5 billion to US$ 9.8 billion. 24% Madhya Pradesh - NSDP growth 41% 12 10 8 35% 6 4 US $ billion 2 Services 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Agriculture Year Industry Source: Review of Madhya Pradesh Economy, CMIE,August 2004 Note: the figures are at 1993-94 prices for bifurcated Madhya Pradesh, Source: Department of Finance, Government of Madhya Pradesh During the past decade (1993-2003), the share of agriculture in Madhya Pradesh’s economy reduced During 1993-94 to 2002-03 Madhya Pradesh’s from 46 per cent to 24 per cent. In the same period, economy grew at average annual growth rate of 3.7 the share of industry and services increased per cent. In 2002-03, Madhya Pradesh’s per capita by 7 per cent and 5 per cent respectively, income stood at US$ 254. indicating a positive trend in the state’s economic development. INFRASTRUCTURE Social infrastructure Institute of Forest Management, the Indian Institute of Hotel Management and International Institute In recent years, Madhya Pradesh has taken initiatives of Professional Studies at Indore. the social infrastructure of the state. It is ranked 12th on the Human Development Index. Its improved Madhya Pradesh’s network of health facilities ranking can be attributed to the thrust on social comprises 145 hospitals, 343 community health development through focus on rural development centres, 1,705 primary health centres. It also and self-employment schemes. has 34 Ayurvedic and 4 homoeopathic hospitals. The number of in-patient beds in Madhya Pradesh’s The state has a population of over 60.3 million hospitals is 20,839. (Census 2001), and is India’s seventh most populated state. Its population density is 196 persons per sq km. Access infrastructure The population growth rate in the state was 24.3 per cent between 1991-2001. Madhya Pradesh has an The total length of roads in Madhya Pradesh stands urban population of 16 million, representing over at over 160,000 km. 26 per cent of the total. Madhya Pradesh - Growth in road network Literacy levels in the state have improved from Year 2000 2001 44.2 per cent in 1991 to the current level of over Total length (in km) 1,62,309 1,62,370 64.1 per cent. Surfaced length (in km) 79,135 79,575 Source: Review of Madhya Pradesh Economy, CMIE,August 2004 Madhya Pradesh - Growth in schools and enrolment Year 2000-01 2001-02 Road density stands at 52.2 km per 100 sq km. Primary schools 81,942 87,620 The state has 18 national highways - a length Primary students of 4,664 km passing through it. Madhya Pradesh enrolment (thousand) 10,525 10,952 lies in central India and is a land locked state, Secondary schools 7,943 8,481 which is why the state needs a good road network. Secondary students Under the on-going National Highway Development enrolment (thousand) 1,359 1,516 Programme (NHDP), a length of 634 km is being Source: Review of Madhya Pradesh Economy, CMIE,August 2004 converted into 4-6 lane carriage-ways.Two more projects to upgrade 100 km of national highways Madhya Pradesh’s education network consists through public private partnerships are being of 9 universities, over 250 colleges, along with planned. 87,000 primary and 8,500 secondary schools. Under the Madhya Pradesh State Road Sector The state has 45 engineering colleges, over Development Programme funded by the Asian 200 technical training institutes, 6 medical colleges Development Bank, 1750 km of state roads will and 43 management institutes including one of the also be rehabilitated and upgraded by 2006 six Indian Institutes of Management at Indore. Other at a cost of US$ 150 million. national institutes in the state include the Indian MADHYA PRADESH PAGE 11 The Madhya Pradesh government has accorded of Madhya Pradesh’s electricity generation capacity high priority to improve the road infrastructure is based on thermal energy with the remaining from in the state and has been successful in attracting hydel generation. private sector participation (PSP) in the development of highways. It has constructed 17 bridges and Madhya Pradesh - Electricity generation bypasses to four of its cities through PSP.Maintenance 3000 16000 of three state highways has been outsourced 2980 15500 to the private sector. Currently, IJM Corporation 2960 2940 15000 of Malaysia is implementing two state highway 2920 14500 MW projects aggregating 380 km with an investment 2900 14000 2880 Million Units of US$ 50 million. 13500 2860 2840 13000 2000 2001 2002 2003 Given the significant presence of mineral based industries in the state, availability of efficient railway Installed capacity (MW) links is critical to fully exploit the potential.The total Electricity generation (MU) length of the railway network in Madhya Pradesh Source: Review of Madhya Pradesh Economy, CMIE,August 2004 is 5992 km. Of this, almost 1,880 km is electrified track. Currently, railway upgradation projects in the state include adding 1,151 km of railway lines Industry and agriculture represent the largest at a cost of approximately US$ 460 million consumer categories, followed by domestic and implementing a major track modernisation consumers. programme to convert about 285 km of the existing metre gauge routes to broad gauge at an approximate Madhya Pradesh - Composition of electricity consumption cost of US$ 112 million.The completion of these projects will further strengthen the railway network 4% in the state. Madhya Pradesh has two full-fledged domestic 30% 42% airports at Bhopal and Indore, it has smaller airports in Gwalior and Khajuraho - key tourist destinations, and 25 airstrips at a number of locations with regular services. 24% Madhya Pradesh - Growth in air traffic Airport 2001-02 2002-03 2003-04 Industrial Bhopal 71294 87784 113,700 Domestic Indore 170,963 195,072 226,900 Agriculture Total 242,257 282,856 340,600 Others Source: Review of Madhya Pradesh Economy, CMIE,August 2004 Source: Review of Madhya Pradesh Economy, CMIE,August 2004 Power On a per capita basis, electricity consumption The installed electricity generation capacity in Madhya Pradesh stands at 352 kWh per annum, of Madhya Pradesh is 3,008 MW. 95.66 per cent close to the national average of 355 kWh per annum. Various electricity projects under implementation (CONCOR).This is a well-developed dry port and in the state aggregate to 790 MW. is connected by rail and road transport to major destinations in India. Project Installed Capacity (MW) Hydel Power Projects (2004) Indore is also a potential destination for IT and ITES industries coming to the state.
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