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Confederation of Indian Industry N A Conclave to Showcase nvest Investment Opportunities no th in Northern States 3 - 4 November 2012 : Gurgaon, India SCALING NORTHERN HEIGHTS Knowledge Partner Confederation of Indian Industry A Conclave to Showcase nvest Investment Opportunities no th in Northern States 3 - 4 November 2012 : Gurgaon, India SCALING NORTHERN HEIGHTS CONTENTS I. THE NORTHERN REGION: AN OVERVIEW II. ADVANTAGE NORTH: AHEAD OF THE CURVE III. HIGH-GROWTH SECTORS: A WINDOW OF OPPORTUNITY IV. POLICY INITIATIVES: CONTINUOUS ENHANCEMENT V. LOOKING AHEAD: KEEPING THE FUTURE IN FOCUS Knowledge Partner The KPMG name, logo & "cutting through complexity" are registered trademarks or trademarks of KPMG International. Confederation of Indian Industry A Conclave to Showcase nvest Investment Opportunities no th in Northern States 3 - 4 November 2012 : Gurgaon, India SCALING NORTHERN HEIGHTS CONTENTS I. THE NORTHERN REGION: AN OVERVIEW II. ADVANTAGE NORTH: AHEAD OF THE CURVE III. HIGH-GROWTH SECTORS: A WINDOW OF OPPORTUNITY IV. POLICY INITIATIVES: CONTINUOUS ENHANCEMENT V. LOOKING AHEAD: KEEPING THE FUTURE IN FOCUS Knowledge Partner The KPMG name, logo & "cutting through complexity" are registered trademarks or trademarks of KPMG International. I. THE NORTHERN REGION: AN OVERVIEW India's vast northern region comprises eight accounts for approximately 30.7 percent of states — Delhi, Haryana, Himachal Pradesh, India's geographical area.1 Further, the region is Executive Summary Jammu & Kashmir, Punjab, Rajasthan, Uttar sizeable in terms of population — it is home to Pradesh and Uttarakhand — and one union around 30.5 percent of the country's territory (UT), Chandigarh. With Rajasthan being population, including Uttar Pradesh, India's most The northern region of India with 7 percent of world's population has for long served as the breeding the country's largest state by area, the region populous state.1 ground for innovation and entrepreneurship. Many Indian home grown businesses have taken roots in this part of the country and the region has also been the preferred investment gateway for foreign Table 1: Northern region at a glance players. Time is testimony to the advent of outsourcing, which started from this region when global State/ UT Geographical area Share in India's total Population Share in India's total airlines and banks preferred moving their back office work to India and opened their captive units in ('000 km square) geographical area population National Capital Region. Global auto majors like Suzuki, Honda and a large number of auto ancillaries are operating in India from some of their largest plants based out of this region. North also has its advantage Delhi 1.5 0.1% 16,753,235 1.4% of being the political power center of the country with National Capital in its folds. Haryana 44.2 1.3% 25,353,081 2.1% Himachal Pradesh 55.7 1.7% 6,856,509 0.6% The region contributes 26 percent to India's GDP and accounts for 31 percent of India's Agriculture GDP. Jammu & Kashmir 222.2 6.8% 12,548,926 1.0% The region has an abundant availability of young, educated and skilled work force. This coupled with Punjab 50.4 1.5% 27,704,236 2.3% rising income levels and strong consumer base have resulted in the proliferating investor interests in the Rajasthan 342.2 10.4% 68,621,012 5.7% region. The upcoming projects of Delhi Mumbai Industrial corridor (project worth more than USD90 Uttar Pradesh 240.9 7.3% 199,581,477 16.5% Uttarakhand 53.5 1.6% 10,116,752 0.8% billion), Eastern and Western dedicated freight corridors would provide a lasting solution to the inherent Chandigarh 0.1 0.0% 1,054,686 0.1% constraint of being distant from all sea-ports. Apart from the speedy link to the east and west coast, these Northern region 1,010.7 30.7% 368,589,914 30.5% corridors will also fuel the development of smart cities to provide impetus to investment activities in the India 3,287.2 100.0% 1,210,193,422 100.0% region. Sources: Census 2011, KPMG in India analysis The region scores high on the human development parameters as well, despite its size by area and Each state/ UT offers a distinct advantage in building the overall investment viability in the region. While, population. Three of India's top five states on the Human Development Index (HDI) belong to this part of Delhi offers a world class airport, reliable and quality power supply, excellent road and rail connectivity; 2 the country. These include Delhi (second), Himachal Pradesh (third) and Punjab (fifth). This is reflective of Punjab, Haryana and Uttar Pradesh are the major contributors to the agriculture and milk output of the the region's strong economic growth over the years, which has led to increased income and affordability country. Himachal Pradesh, Uttarakhand and Jammu & Kashmir have abundant water resources and of basic health and education services. picturesque landscapes. The region attracts millions of domestic as well as foreign tourists; the region is Table 2: Human development in the northern region home to the India's tourism icon: Taj Mahal and many famous temples and shrines like The Golden HDI rank Health rank Income rank Education rank Temple in Amritsar, Ajmer Sharif and religious destinations such as Haridwar and Varanasi. The region Delhi 2 2 1 2 also has the mineral rich state of Rajasthan and the automotive hub of India - Haryana. Add to this, the Haryana 9 11 7 11 recent spree of reforms in various sectors, the massive outlay of the twelfth five year plan, upcoming Himachal Pradesh 3 3 4 4 corridors and the National Manufacturing Policy, all these provide the required thrust to investments in Jammu & Kashmir 10 16 5 13 Punjab 4 8 the region. 5 3 Rajasthan 17 13 16 22 Uttar Pradesh 18 19 18 20 Northern region is a promising land of opportunities with its strategic location and abundant natural & Uttarakhand 14 16 13 9 manpower resources being a boon for investors. Traditionally, the northern region has lagged in Note: The ranking for Chandigarh on HDI 2011 is not available. The rankings are for 23 states of India attracting investments (FDI share of 27.5 percent between April 2000 to June 2012) and stands at the Source: India Human Development Report 2011 number two spot behind the western region (50 percent). However, with these fundamentals in place and Economic profile the commitment of the state governments for a resilient future, the region continues to be an impeccable The northern region is economically crucial for percent of national agricultural production.3 destination for growth & investments. the Indian economy, as it contributes The region's economic significance may be approximately 26.4 percent to the country's attributed to the high growth it has The following report is an attempt to highlight the advantages & opportunities of the region to the GDP and is the home to some of the richest registered over the past decade, which, in potential investors and the way forward. states and union territories including Delhi, turn, has facilitated the growth of income\ Chandigarh and Haryana.3 Further, as an and investment in the region. agrarian region, it accounts for around 32.7 1Census of India 2011, Census India website, www.censusindia.gov.in/2011 provresults/prov_results_paper1_india.html, accessed 15 September 2012 2“North India : Leveraging Opportunities for Accelerated Growth”, CII, 2012 3“Press Releases & Statements,” Ministry of Statistics and Programme Implementation, Central Statistical Organisation website, http://mospi.nic.in/Mospi_New/site/inner.aspx?status=3&menu_id=82, accessed 15 September 2012, KPMG in India analysis 1 2012 2 Confederation of Indian Industry I. THE NORTHERN REGION: AN OVERVIEW India's vast northern region comprises eight accounts for approximately 30.7 percent of states — Delhi, Haryana, Himachal Pradesh, India's geographical area.1 Further, the region is Executive Summary Jammu & Kashmir, Punjab, Rajasthan, Uttar sizeable in terms of population — it is home to Pradesh and Uttarakhand — and one union around 30.5 percent of the country's territory (UT), Chandigarh. With Rajasthan being population, including Uttar Pradesh, India's most The northern region of India with 7 percent of world's population has for long served as the breeding the country's largest state by area, the region populous state.1 ground for innovation and entrepreneurship. Many Indian home grown businesses have taken roots in this part of the country and the region has also been the preferred investment gateway for foreign Table 1: Northern region at a glance players. Time is testimony to the advent of outsourcing, which started from this region when global State/ UT Geographical area Share in India's total Population Share in India's total airlines and banks preferred moving their back office work to India and opened their captive units in ('000 km square) geographical area population National Capital Region. Global auto majors like Suzuki, Honda and a large number of auto ancillaries are operating in India from some of their largest plants based out of this region. North also has its advantage Delhi 1.5 0.1% 16,753,235 1.4% of being the political power center of the country with National Capital in its folds. Haryana 44.2 1.3% 25,353,081 2.1% Himachal Pradesh 55.7 1.7% 6,856,509 0.6% The region contributes 26 percent to India's GDP and accounts for 31 percent of India's Agriculture GDP. Jammu & Kashmir 222.2 6.8% 12,548,926 1.0% The region has an abundant availability of young, educated and skilled work force. This coupled with Punjab 50.4 1.5% 27,704,236 2.3% rising income levels and strong consumer base have resulted in the proliferating investor interests in the Rajasthan 342.2 10.4% 68,621,012 5.7% region.