UTTAR PRADESH December 2008

www.ibef.org State economy and socioeconomic profile

2 www.ibef.org Uttar Pradesh | December 2008 Uttar Pradesh – a snapshot

• Located in the northern region of India, Uttar Pradesh, bears a population of 166 million, making it India’s most populous state (16 per cent of India).

• Occupies an area of 240, 928 Sq. Km. (nine per cent of India).

• The State covers a large part of the highly fertile and densely populated upper Gangetic plain.

Saharanpur • Shares an international border with Nepal and is UTTARANCHALUTTARAKHANDUTTRAKHAND

bounded by the Indian states of Uttarakhand, Muzaffarnagar Bijnor Himachal Pradesh, Haryana, Delhi, Rajasthan, Bagpat Meerut J.P.Nagar Raapumpur Madh ya Pra des h, Chhatti sgar h, Jhar khan d an d Bihar. Ghaz ia bad DELHIGautam Moradabad Bareilly Pilibhit Buddha Nagar BAREILY Bulandshahr NE Budaun Lakhimpur P HARYANA Aligarh A • The state is divided into 83 districts (305 tehsils, and Shahjahanpur Kheri L Bahraich Mathura Hathras Etah 901 community blocks). Farrukhabad Sitapur Shravasti MATHURA Balrampur Hardoi Maharajgunj Firozabad Siddharth Agra Mainpuri Kannauj Lucknow Gonda Nagar • Administrative and legislative capital is Lucknow, and Khushi Etawah Unnao Barabanki Basti Gorakhpuri Nagar RAJASTHAN LUCKNOW S.K.Nagar the financ ia l an d in dus tr ia l cap ita l is Kanpur. AuraiyaKanpur Kanpur Faizabad Dehat Nagar Ambedkar Deoria KANPUR Raebareli Sultanpur Nagar Jalaun Azamgarh Fatehpur Mau Pratapgarh Ballia Hamirpur Jaunpur Jhansi Kaushambi Ghazipur JHANSI Banda Mahoba ALLAHABAD Varanasi S.R.Nagar BIHAR Chitrakoot VARANASI Allahabad Mirzapur Chandauli Lalitpur Sonbhadra MADHYA PRADESH JHARKHAND

CHHATTISGARH 3 www.ibef.org Uttar Pradesh | December 2008 Economic profile

• Uttar Pradesh (UP) is the second-largest economy in Gross State Domestic Product (GSDP) at India after Maharashtra, contributing 8. 17 per cent to factor cost by industry of origin (at current India’s total GDP. price) in Uttar Pradesh (US$ billion) • Gross State Domestic Product (GSDP) at current prices in 2004-2005 was US$ 55 billion. 60 • Net State Domestic Product (NSDP) of the state at Current Prices (2004-05) was US$ 48 billion. 50 • UP has a predominantly agrarian economy, agriculture being the highest contributor to the GSDP. 40

• Tertiary sector’ s contribution is the maximum (44 per 30 cent).

• Primary sector, which includes agriculture, cultivation, 20 fishery, mining activities ,etc., contributes to 35 per cent of the GSDP. 10 • Agriculture is a key contributor (66 per cent of the primary sector) to the GSDP. -

• The Net State Domestic Product (NSDP) of the State at Current Prices in 2004-05 was US$ 48 billion.

as of Feb 2006

Source: www.indiastat.com 4 www.ibef.org Uttar Pradesh | December 2008 Socioeconomic snapshot

Capital Lucknow Area 240, 928 Sq. Km. Population (Census 2001) 166 million

Density (2001) 689 person per Sq. Km. Sex ratio (Census 2001) 898 females per 1000 males Principal languages Hindi and Urdu Literacy rate (Census 2001) 56.27 per cent Major minerals Limestone, dolomite, copper, gypsum, glass, sand, marble, fireclay, coal and phosphorite Major industries Cement, vegetable oils, jute, brassware, sugar production, carpet, handloom, cotton and woolen textiles, leather and footwear, distilleries and breweries, glassware and bangles Major crops Food grains, sugarcane and oilseeds GSDP at current prices in 2004-2005 US$ 54 .8 billion NSDP at current prices in 2004-2005 US$ 47.7 billion Annual per capita income at current prices in 2005- US$ 253 2006 Domestic airports Lucknow, Kanpur, Varanasi, Agra

Sources: Official website of Government of India, www.india.gov.in and the Department of Rural Development, Government of Uttar Pradesh

5 www.ibef.org Uttar Pradesh | December 2008 Key economic drivers

Primary Sector Secondary Sector Tertiary Sector

• Largest producer of wheat, • Sugar, cotton fabrics and agro- • One of the top tourist sugarcane, tobacco and potato based industries are the three destinations in India, with in the country and the most important. almost 25 per cent of the all- contribution varies between 30 India foreign tourists visiting to 50 per cent, • Largest share of small scale Uttar Pradesh, units in the country , with 12 per • One of the highest irrigation cent of over 2.3 million units, • Witnessed more than 105.5 intensities at 66 per cent, million domestic tourists in • Leading manufacturer of office 2006, • Share of the workforce machinery in the country (25 engaged in agriculture is about per cent), • Agra was travelled to by more 78 per cent than 8 million domestic and • India’s fourth largest software 825,000 foreign tourists in exporter (US$ 1 billion), 2006, followed by Varanasi, • Labour efficiency is higher in Lucknow, Allahabad, UP (26) than the national Vrindaban and Mathura. average (25).

6 www.ibef.org Uttar Pradesh | December 2008

Socioeconomic profile GthtiGrowth rate in empl oyment in U.P., 1977-1978 to 1999-2000

Social indicators

• UP h as a lit eracy rat e of 56 .27 per cen t as per 3.40% 3.50% Census 2001 2.10% 1.50% • Official languages of the State are Hindi and Urdu

• Sex ratio (number of females per thousand males) in Primary Secondary Tertiary Total the s ta te is 898 Source: Human Development Report 2003, U.P.– Planning Department, GOUP

Worker population in Uttar Pradesh (Figures in million)

9.7, 18% State workforce 6.8, 18% • Workforce participation rate as per the census 2001 in UP is 32.6 per cent 4.8, 3.5, 2001 9% 9% 1991 • Of the total workforce, over 18 per cent employed in the tertiary sector

• Agriculture and allied activities employ about 73 per 28.6, 73% cent of the workforce 39.4, 73% Primary sector Secondary sector Tertiary sector

Source: Census; http://planning.up.nic.in/annualplan; EY analysis 7 www.ibef.org Infrastructure status

8 www.ibef.org Uttar Pradesh | December 2008 Physical structure

Airways Railways

• Uttar Pradesh is well-connected through airways; has • Largest railway network in the country; total length of 4 airports and 23 air strips. 8,546 Km. (2006), it also has the sixth largest railway density . • Major carriers providing services include Indian, Jet Airways, Air Deccan, Kingfisher Airlines, Spice Jet • Almost all the major as well as small cities in Uttar Pradesh are linked through railways. • Cities that have domestic airports are Lucknow, Kanpur, Varanasi and Agra. • Lucknow is the main junction of the northern and north eastern railway. • The nearest international airport is in Delhi, airports in Varanasi, Lucknow and Agra, are custom airports, and • Cargo carried within the northern and north eastern also have domestic cargo terminals. zone of the railways is approximately 133 million tonnes. • Efforts are being made to introduce air services to Gorakhpur and Allahabad as well.

Cargo handled at airports (figures in tons) Airport 2002-2003 2003-2004 Railway Network in UP in 2006 (figures in Km.) Lucknow 2,202 2,107 Broad gauge Meter gauge Narrow gauge Total Varanasi 544 660 6,826 1,718 2 8,546 Source: www.indiastat.com Source: www.indiastat.com

9 www.ibef.org Uttar Pradesh | December 2008 Physical infrastructure

Roadways Break up of surfaced roads by category

• Second largest road network in the country after Category of roads Length in Km. Maharashtra, National highways 5595 (NHAI) • Seventh highest road density in India with 1,027 Km. State highways 9097 per thousand Sq. Km. as in 2002, Major district roads 7,308 • 37 National Highways (NH), with a total length of 4,942 Km (8.5 per cent of total NH length in India), Rural PWD roads 105,794 Other district roads 102,135 • Total road length in the state is 248,481 Km. (2002), And village roads of which 67 per cent (166,659 Km.) is surfaced, Total 229,929 • Largest surfaced urban road network in the country Source: www.planning.up.nic.in (planning department, GoUP) i.e. 50,721 Km., as on 2002. Waterways

• Stretch of the river Ganges from Allahabad (Uttar Pradesh) to Haldia (West Bengal) has been declared as National Waterway (NW) I

• 600 Km. of the total NW I lies in Uttar Pradesh

10 www.ibef.org Uttar Pradesh | December 2008 Physical infrastructure

Transport network in Uttar Pradesh

UTTARANCHALUTTARAKHAND

NH 1

DELHI ÓÓ BAREILY N NH 24 EP HARYANA AL Bahraich Shravasti MATHURA

NH 11 Ó Custom RAJASTHAN Etawah LUCKNOWÓÓ Auraiya NH 28 Ó Airports Ó NH 56 KANPURÓ NH 29 National Domestic NH 25 Highways NH 25 ÓÓGhazipurÓ Ó Airports JHANSI ALLAHABAD BIHAR S. R. NagarVARANASI NH 3 Domestic National NH 2 NH 27 Ó Cargo Waterways MADHYA PRADESH JHARKHAND Terminals NH 26 Railway Tributaries of CHHATTISGARH River Ganga Network

11 www.ibef.org Uttar Pradesh | December 2008 Physical infrastructure

Telecom Power

• UP has a total teledensity of 3.88 per cent per 100 • Several major private projects such as Dadri power population. project of Reliance Energy Generation Limited, Roza Power Project of Birla Group, are in various stages of • 3.5 million telephone connections, both fixed and implementation. wireless local loop (WLL), in 2006, • The state has a favorable power policy, to facilitate • Cellular services being provided in the state by more investments in the power sector. than 10 players, including the government-owned and operated BSNL service.

Power statistics in Uttar Pradesh (2006) Subscriber base in UP (2006) Power generation installed capacity 4,706 MW Service provider Fixed WLL Total Power generation 24834 MU BSNL 2,718,952 205,367 2,924,319 Total power available 50679 MU Reliance 81198,119 294, 354 302, 473 Total power sold 33458 MU TTL - 93,771 93,771 Percentage loss of total power available 33.98 Bharti 194,896 - 194,896 202 Per capita power consumption Total 2,921,967 593,492 3,515,459 Kw/Hr All India 41,542,356 8,634,153 50,176,509 Electrified villages 68,201 Source: TRAI Annual Report 2005-06 Source: Uttar Pradesh Power Corporation Limited

12 www.ibef.org Uttar Pradesh | December 2008 Social infrastructure Education Health

• Ranked amongst the first few states to have • 24,650 medical centres, 2,108 Ayurvedic centres, 204 successfullyyp implemented “education for all” ppyolicy Unani centres and 1,483 homeopathic centres,

• The State has made investments towards enhancing • Other than Allopathic methods, Uttar Pradesh is the standard of education across different levels known for several healing techniques.

• UP has 16 general universities and few world renowned institutes such as Indian Institute of Technology (Kanpur), Indian Institute of Management (Lucknow), National Institute of Technology Health infrastructure of Uttar Pradesh (Allahabad) and Asian Academy of Film and Television (Noida). Health institution Number District hospitals 74 Educatio n infrast ructu re o f Utta r Pr adesh Sub-centre 20,521 Educational institution Number Primary health centre 3,660 Primary schools 94476 Community health centre 386 Higher secondary schools 8,459 Ayurvedic hospitals 1,768 Degree colleges 758 Ayurvedic dispensaries 340 Universities 38 Unani hospitals 204 Polytechnic institutes 95 Unani dispensaries 49 Industrial training institutes 179 Homeopathic hospitals 1 Engineering colleges 95 Homeopathic dispensary 1,482 Medical colleges 16 Source: Ministry of Health and Family Welfare, GoI, Source: www.upeducation.net March 2007 13 www.ibef.org Uttar Pradesh | December 2008 Industrial infrastructure

Industrial areas in Uttar Pradesh

) Industrial Saharanpur UTTARANCHAL Areas

Muzaffarnagar ) Specialized Bijnor Bagpat Meerut Parks ) )) J.P.Nagar Rampur ))Ghaziabad) ) ) Special Gautam) ) ) ) DELHI ) ) Moradabad Bareilly Pilibhit Economic Buddha Nagar) ) BAREILY Bulandshahr ) NE ) )Budaun Lakhimpur P Zones HARYANA Aligarh A ) ) Shahjahanpur Kheri L ) Bahraich Mathura))Hathras Etah ) Farrukhabad Sitapur Shravasti MATHURA ) Balrampur ) ) Hardoi Maharajgunj ) Firozabad ) Siddharth Agra) Mainpuri Kannauj Lucknow Gonda Nagar Khushi Etawah Unnao Barabanki) RAJASTHAN LUCKNOW Basti Gorakhpuri) Nagar ) IdIndustr ilial Areas ) ) ) ) S.K.Nagar AuraiyaKanpur))Kanpur) Faizabad Dehat )Nagar ) Ambedkar Deoria KANPUR)) )) ) Raebareli Sultanpur Nagar Jalaun Azamgarh Fatehpur Mau ) Pratapgarh Ballia ) Hamirpur Jaunpur Jhansi Kaushambi) Ghazipur JHANSI Banda ALLAHABAD Varanasi Mahoba ) S.R.Nagar) BIHAR Chitrakoot )VARANASI )Allahabad) ) Specialised Parks Mirzapur Chandauli Lalitpur) Sonbhadra MADHYA PRADESH JHARKHAND Special Economic CHHATTISGARH ) Zones

14 www.ibef.org Uttar Pradesh | December 2008 Industrial infrastructure

• Robust industrial infrastructure is present in the state • The proposed infrastructure development which including 15 industrial areas , 12 specialized parks , would support the industrial development, in the three growth centres and four Industrial Infrastructure State, includes Development Centres (IIDCs). • Power Plant of 1750 MW at Dadri, 740 MW gas- • 12 notified Special Economic Zones (SEZ) with world based power plant at Dadri and 250 MW gas- class infrastructure. based power plant at Greater Noida

• Greater NOIDA Phase II has 19 per cent land • Development of Feeder Road/ Rail Linkages, reserved for Industrial Use. passenger and goods terminal, an Inter State Bus Terminal (ISBT) and development of a greenfield • 40 IT-ITes Parks (apart from IT SEZs), and two airport at Greater Noida Biotech Zone and a Knowledge Park are proposed (fidtil(ref: industrial area map )

• Development of Integrated Agro/Food Processing Zones has been proposed at Hapur (200 Km. from Delhi)

• ItIntegra tdLted Log itiistics HbHubs (Free Tra de Ware hous ing Zone) have been proposed in collaboration between IL&FS, Mineral and Mining Trading Corporation and Mitsui (Japan)

15 www.ibef.org Uttar Pradesh | December 2008 Urban infrastructure

Per capita supply of water in various cities (lpcd) Agra Water supply 300 225 Allahabad Mathura • Average per capita supply of water in the cities of UP 150 is 167 lpcd, higher than the desired supply of 150 75 lpcd - Varanasi Meerut • All the cities are fully covered with piped water supply system. Lucknow Kanpur • The operation and maintenance costs recovered from Current per capita supply- litres/day the water tariffs, is significant in almost all the cities. Desired per capita supply- litres/day

Collection efficiency of solid waste (%) Agra 100 75 Allahabad Mathura Solid waste managgyement system 50 25 • Solid waste collection efficiency is 70 per cent on an 0 average for all the cities, with Kanpur having 100 per Varanasi Meerut cent efficiency.

• Medical waste is disppyosed scientifically in all the Lucknow Kanpur

cities, except Meerut. Present collection efficiency (%) Ideal collection efficiency (%)

16 www.ibef.org State policies and incentives

17 www.ibef.org Uttar Pradesh | December 2008 State level policies

Industrial and Service Policy for Food Biotech Policy – Sector Investment Policy – Processing Industry 2004 2004 – 2004-2009 • Prime objective is to ensure • Aims to facilitate better • Mission is to develop creation of maximum returns for farmers and a knowledge-based employment opportunities and attract investment in economy, assure eradication of poverty. this sector, benefffits of biotechnology to all • Top priority has been accorded • Focus on generating sections and also to infrastructure development. employment and promote promoting value entrepreneurship in • The State is keen to promote addition,,g minimizing the participation of the private biotechnology related wastage of agri- industries. sector in the industrial and products, providing economic growth. appropriate linkages • State will provide a facilitative between agriculture, atmosppphere for the promotion of industries and markets exports .

• The State shall create an attractive environment for foreign investors and NRIs to invest in the State .

18 www.ibef.org Uttar Pradesh | December 2008 State level policies

IT Policy – 2004 Power Policy – 2003-2009 Sugar Policy – 2004

• Aims at facilitating and creating • Emphasis on attracting • Entrepreneurs are an investor friendly environment private sector investment provided incentives and by providing all necessary into power generation, concessions to set up infrastructure for IT industries, transmission and sugar mills in the state distribution, such as exemption of • IT/ ITeS to be promoted as they entry tax on sugar, have vast employment • Lucrative tax benefits such reimbursement of generation potential, as interest-free loans to administrative charge investors, • State government organizations and trade tax on to provide infrastructure , besides • Provisions for additional molasses. marketing and financial support power capacity, • Provides direct benefits for setting up of units. modernization of power to the farming stations and improving the community.. transmission systems.

19 www.ibef.org Uttar Pradesh | December 2008 State level policies

Policy for promotion of Film Industry Policy – 1999 UPSEZ New Policy – 2006 pritiivate invest ment tith in the development of hi-tech townships in Uttar Pradesh – 2005 • Aims to promote the • Provides a coherent framework • Develop integrated areas with development of hi-tech for the growth of film industry in world-class infrastructural townships with facilities UP, facilities through establishment comparable to international of SEZs. standards in cities including • Aims to encourage additional Lucknow,,p,g, Kanpur, Agra, capital investments in order to • Foster industrial and economic Varanasi, Allahabad, improve the economic status of development by creating Ghaziabad. the people and provide conducive environment for the alternative avenues of development of SEZs. • Basic objective is to facilitate employment to its people, and create an enabling • New avenues for employment environment for attracting • Promotes the creation of generation will be created by maximum private investment required infrastructure in the setting up of SEZs. private and joint sector. in housing and infrastructure • Boost the exports through development. establishment of SEZs.

20 www.ibef.org Uttar Pradesh | December 2008 State level policies

Mineral Policy Textile Policy – 2006-2011 Tourism Policy

• Aims to expe dite inves tiga tion • Aims to genera te more j o bs • Aims t o promot e t ouri sm with of new mineral deposits by and attract investments in pilgrims, as one of the key adopting modem exploration textile and apparel target populations, techniques, manufacturing industries, • Focus on improving efficiency • Promotes private investment •Propp,oses schemes, of the industry, for enhanced and foreign capital investment strategies and programs for social and economic benefits, in the mineral development power supply, infrastructure, process, textile parks, human • Focus on development of resource development and necessary infrastructure, • Encourages optimum use of provisions to attract big creation of corpus funds for minerals, increasing export of players w ith su bs tan tia l development of basic minerals, ensuring value investment in the state in this amenities, promotion of eco- addition besides using by- sector. tourism, restoration of ancient products in the mineral places and strengthening of industry. the tourism departmental organisation.

21 www.ibef.org Uttar Pradesh | December 2008 State level incentives

Details of state level incentives for industries Category New investment Existing units • @ 10 per cent for SSI units subject to a ceiling of US$ 11,6 00 • @ 15 per cent for women and SC/ST entrepreneurs Capital subject to a ceiling of US$ 17,400 • @ 50 per cent for machinery in SSI Units investment • Special incentive package for large units with subject to a ceiling Of US$ 4,600 subsidy investment of US$ 11.6 million or more • Invest ment sub sid y o f 10 per cen t (up to US$ 46 ,500) for 100 per cent EOUs Interest • @ five per cent for SSI units for 5 years subject to a • @ 5 per cent for SSI units for 5 years subsidy ceiling of US$ 5,800 p.a. subject to a ceiling of US$ 1,200 p.a. • Concessional rates on land in industrial areas and Land subsidy estates in industrially-backward districts Registration of • Reimbursement of 50 per cent expenditure patents and (ceiling of US$ 11,600) other IPR • Subsidy equivalent to trade-tax paid on raw materials • Exempted from electricity duty for 10 years Power subsidy • 20 per cent rebate (up to five years) on electricity bills for notified industrial estates and industries • Exemption from entry tax, Interest free loans for 15 • For rehabilitation of sick units, minimum years for pioneer units, concession on trade tax, tax demand charges for the period of their Others free purchase of inputs, cost of transportation, octroi closure will not be charged. concessions rebate, special incentives for NRIs etc. • Deferment of luxury tax in thrust areas for five years

22 www.ibef.org Uttar Pradesh | December 2008 State level incentives

Incentives for thrust industries

• Exemptions from payment of entry tax on material for construction and equipment, on stamp duty and registration charges for specified period of time • Exemption of electricity tax on captive power generation sets and exempted of electricity tax for 10 years Biotech policy • Relaxation of taxes on biotechnology-based products and on entry tax for 15 years • Relaxation on land for establishment of biotechnological unit - on lease for 99 years • Relaxation in zonal regulations - exemption for Floor Area Ratio (FAR) to 50 per cent • 100 per cent relaxation in stamp duty and registration fee

• Preferential allotment of land and 100 per cent exemption from payment of stamp duty and registration fees • Encouragement to captive power generation in IT locations IT policy • The mega investment units shall be given interest free loan for a period of 15 years upto the amount of the sales/trade tax liability or 10 per cent of the total turnover of the unit • The mega investment will be allowed interest free loan of 2.5 per cent of trade tax liability for goods • The mega investment will be allowed CST at 0.5 per cent or at a lower rate as given by GoI

Mineral policy • Trade tax concession is available on investments of US$ 2.3 million or more

Source: ViVarious PliiPolicies of UP

23 www.ibef.org Uttar Pradesh | December 2008 State level incentives

Incentives for thrust industries

• Trade tax due on the transfer of the right to use of the films between the producer, distributor and the exhibitor would be exempt • Exemption in entertainment tax between 50-100 per cent for a period of six months to one year (depending on location of shootingg) of film) Film industry • Children's' films and national award winning films are eligible for 100 per cent entertainment tax exemptions • Regional films made in Uttar Pradesh in any one of the mentioned languages will be provided 100 per cent entertainment tax exemption for a period of one year and a subsidy of 25 per cent of the cost of production, with limit of US$ 23 thousand

• Luxury tax will only be levied on hotels which charge a rental of US$ 23 or above • Heritage Hotel subsidy scheme - 15 per cent of capital investment .Subsidy Scheme subject to a ceiling of US$ 17.4 thousand. All recognized tourism units of the state shall be entitled to the facility of Tourism ppyolicy exemption/deferment from luxury tax for a period of five years • Tourism self-employment scheme has been prepared for the hill areas of the state with a financial assistance subject to a ceiling of US$ 23 thousand for starting tourism units

Source: ViVarious PliiPolicies of UP

24 www.ibef.org Business opportunities

25 www.ibef.org Uttar Pradesh | December 2008 Thrust areas of the state

Mineral Based Agro Processing Tourism Industries • Major contributors to the • Ranks first in terms of • Almost 25 per cent of the all- economy of this region, production of wheat, India foreign tourists visit Uttar sugarcane, maize, potato Pradesh. • Important minerals include vegetables, and livestock coal, diaspore, sulphur and produc ts, inc lu ding m ilk, • Home to one of seven magnesite, prophyllite, silica wonders of the world ‘Taj sand and limestone. • 311 heavy and medium Mahal’, Agra is a leading agro processing industries tourist city in India. • In addition, a few other with a total investment of minerals found in the state US$ 581 billion, • Agra is followed by holy cities include marble, non plastic of Varanasi, Ayodhya, fireclay, uranium, barites • 42,586 small-scale agro Mathura and Allahabad for and edalusite. processing and cottage pilgrimage value. industries with a total • In case of minor minerals , investment of US$ 163 • Multitudes from all over the Uttar Pradesh has an billion. world visit UP to attend the important share . Kumbha Mela, a popular annual fair held every 12 years.

26 www.ibef.org Uttar Pradesh | December 2008 Thrust areas of the state

Textile Information Handloom and Technology Handicrafts • Proposal for development • IT hub of North India with • Complete range of handloom of Textile Park and SEZ in software exports next to products and potential to cater Varanasi, Karnataka, to upper market segments,

• UP has been the centre of • IT focus confined to few • Provides livelihood to over chikan embroidery, pockets such as Noida, 200,000 people in the state, renowned for its grace and Greater Noida, Ghaziabad finesse, a skill more than etc. • About 15 per cent of the total 200 years old. fabric produced in the country, • STPI, Noida, among the is produced here. • Banaras is a world famous key IT destinations in India; centre for hand-made home to many giant MNCs • About 30 per cent of the total textiles. The main products such as Adobe, TCS, HCL workforce of artisans in India, include Zari and brocade and Xansa. responsible for about US$ 1.2 work on sarees. billion of annual production. • Upcoming Logix Techno • Kanpur is famous for its Park, in Noida, the largest • Accounts for about 60 per cent leather and textile STPI in North India. of India’s total handicraft industries. exports.

27 www.ibef.org Uttar Pradesh | December 2008 Attractive sectors

Food Processing Leather Based Industries

• One of the largest producers of • Major production hub of farm commodities in the country, leather and leather products, with over 11500 units; Kanpur • Diverse agro climate conditions, and Agra are key centres. conducive for a variety of crops roundthd the year, • Aroun d 200 tanner ies are located in Kanpur. • Apart from near two per cent of the production, which is • Agra has been the largest commercially processed, the shoe-manufacturing centre in sector has so far been largely the country. untdtapped . • Establishment of Footwear • Agro-based industries can be Design and Development highly lucrative once proper Institute (FDDI) is expected to linkages are in place under the enhance the scope of the policy initiatives to develop footwear sector. synergy and dynamic efficiency in the system.

28 www.ibef.org Uttar Pradesh | December 2008 Key investments

• Reliance Industries has proposed a 3,500 MW gas- based power project , which will be the largest gas- Apppproved outlay for state annual p lan 2006-2007 (()US$ million) based power plant in the world. Industry and General Science,technol minerals, 25, services, 15, ogy and 0.5% 0.3% • The Sahara group has proposed to develop 50 "high- environment, tech townships“; also plans to set up a drinking water 150, 3.1% Agriculture and Communications project and an international trade centre in Lucknow allied activities, , 12, 0.2% to help promote handicrafts. 245, 5. 0% Social Services, • US$ 581 million Taj Expressway project in the Rural 1756, 36.2% development, pipeline. 328, 6.8%

• The A.V. Birla Group, which has substantial Special areas Transport, 600, ittithStthinvestments in the State, has proposed ditt an investment programmes, 12. 4% 339, 7.0% of US$ 233 million as part of the expansion of Indo- General Gulf fertilizers. Energy, 376, economic Irrigation and 7.7% services, 435, flood control, 9.0% 574, 11.8% • Private-public participation in the farm sector with a target to raise approximately US$ 930 million in the Source: Uttar Pradesh Development Report, Vol I – Planning Commission, next two to three years. GOI (2007)

29 www.ibef.org Uttar Pradesh | December 2008 Key players

Reliance (ADAG) Honda SIEL Cars India Ltd

• The Reliance G(G)Group (ADAG), has a major presence • Honda Siel C(SC)Cars India Ltd., (HSCI) was incorporated in the State through Reliance Energy which has its in December 1995 as a joint venture between Honda corporate headquarters in Noida. Motor Co. Ltd., Japan and Siel Limited.

• Reliance is setting up world's largest gas-based • The company has its manufacturing unit in Greater pppj,ower project of 3,500 MW in Dadri. Noida,,y UP and the total investment made by the company until date is over US$ 186 million. • The interests of the Group range from communications and financial services to generation, transmission and distribution of power, infrastructure and entertainment.

30 www.ibef.org Uttar Pradesh | December 2008 Key players

LML Scooters Yamaha India Ltd (YML)

• LML Limited, with a turnover ofS$f US$ 192 • Yamaha Motor India ()(YMI) was incorporated in India million, is in collaboration with Piaggio and has in August 2001 with manufacturing facilities in India a manufacturing unit in Kanpur. comprising of two state-of-the-art plants, including one at Surajpur (UP).

• The two ppppplants support production of motorc ycles and spares for both- the domestic as well as overseas market.

31 www.ibef.org Uttar Pradesh | December 2008 Key players

Dabur Birlasoft Ltd

• Dabur India Limited is the fourth-largest FMCG •Part ofS$CGf the global US$ 1.2 billion CK Birla Group, one Company in India with interests in Health of India's premier commercial and industrial houses. Care, Personal Care and Food Products. • Birlasoft, with its corporate office in Noida, provides • Dabur Pharma Limited, a US$ 250 million software application development and support healthcare comppy,any, has a strong gp presence in services. UP.

• The Group has a turnover of US$ 520 million with powerful brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real.

• Dabur is headquartered in Ghaziabad and one of its key manufacturing units in India is in Sahibabad in UP.

32 www.ibef.org Uttar Pradesh | December 2008 Key players

LG Electronics India Limited (LGEIL) Jubilant Organosys Limited

• Market leader in consumer durables and • Jubilant Organosys is a part ofCf Jubilant Corporation recognized as a leading technology which has a turnover of US$ 233 million. innovator in home appliances, consumer durables, digital display products, GSM • With its corporate office in Noida, it is one of India's mobile phones etc. leading and fastest growing companies with presence in chemicals,,gy,, biotechnology, IT, food etc. • LG setup its first state-of the art- manufacturing unit at its head quarter in • One of its five manufacturing units is located in Greater Noida, UP in 1998. Jyotiba Phoole Nagar, UP.

33 www.ibef.org Uttar Pradesh | December 2008 Key players

Sahara Kothari Products Limited

• The SGSahara Group, one of India's largest • The Kothari GfS$Group with a turnover of US$ 70 million business groups, is headquartered in has its headquarters in Kanpur. Lucknow. • It is the manufacturer of the popular Pan Parag and • Asset base of over US$ 10.87 billion, with other pan masalas. diversified business interests that include Finance, Infrastructure and Housing, Media and Entertainment, Tourism and Hospitality, Consumables, Manufacturing and Services and Trading.

34 www.ibef.org Uttar Pradesh | December 2008 Key players

Triveni Engineering and Industries Flex Industries

• With its registered office in S aharanpur • Established in 1983 and with its headquarters in district , it has core competencies in the area Noida, Flex industries has become the largest flexible of sugar and engineering, packaging company in India with an annual turnover of more than US$ 150 million. • The US$ 233 million company has two plants in the state,,gp a sugar plant in Muzaffarnagar • One of the leadinggp companies in the Asia-Pacific district and a wastewater treatment plant in region, Flex has 25000 TPA strong converting Noida. capacity and dedicated workforce of 1600 employees.

35 www.ibef.org Uttar Pradesh | December 2008 Key players

HCL Infosystems Motherson Sumi Systems Ltd. • With its corporate office in Noida, HCL Infosystems Ltd. is the one-stop-shop for • Flagship company of Sumi Motherson Group, with hardware products and solutions in the headquarters in Noida, area of IT, • With sales worth US$ 107 million, MSSL is the largest • With a turnover of US$ 2.7 billion, it has manufacturer of wiring harnesses in India, serving the developed and implemented solutions for entire automotive industry. multiple market segments.

36 www.ibef.org Uttar Pradesh | December 2008 Key players

EXL Service Holdings Inc Computer Sciences Corporation (CSC)

• Established in 1999 and having its corporate • CSC is a leading global IT services company. Its office and four delivery centres in Noida, Indian operations started in 1991 in Noida. EXL offers comprehensive business process outsourcing services. • With over 15,500 professionals, it is one of the fastest growing companies in India and also the second • As per the Nasscom 2002 survey, EXL is the largest division within CSC. leading BPO service provider in India.

37 www.ibef.org Uttar Pradesh | December 2008 Key players

Adobe Systems India Pvt Ltd Delphi Automotive System

• Adobe India commenced its operations in • Delphi is a leading global supplier of mobile India 1998 and has its headquarters in electronics and transportation systems. Noida. • With global sales of US$ 26.4 billion in 2006, • The company has invested US$ 100 Michigan-based Delphi has its branch office in Noida, million in India until date and accounts for UP. more than 20 per cent of Adobe’s annual revenues.

38 www.ibef.org Doing business

39 www.ibef.org Uttar Pradesh | December 2008 Key approvals required

List of approvals and clearances required Departments to be consulted Prior to settinggp up the unit Registration Industries department Allotment of land/ shed Industrial development authority Permission for land use District authorities No o bjtibjection certifi tifitdcate under wat er and di air act PlltiPollution cont rol lb 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 Central and state excise departments Before commencement of production No objection certificate under of water and air act Pollution control 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 Uttar Pradesh | December 2008 Business climate of the state

Spectrum of industrial activity in Uttar Pradesh (1999-2000)

Fabricated metal Publishing printing Paper and paper products and reproduction 1% products Coke, refined of recorded media 2% Leather related 2% petroleum products 1% and nuclear fuels 1% Tobacco products Wearinggpp apparels Other 3% 2% 2% Non-metallic mineral products Food products and 3% beverages Manufacturing and 25% equipment Furniture c 3% Chemicals and manufacturing chemical products Electrical 3% 16% machinery and basic metals apparatus 8% 4% Motor ve hic les, Other transport Radio television trailers and semi- equipments and commuication Rubber and plastic Textiles trailers 4% equipment products 4% 6% 4% 6%

Source: Uttar Pradesh Development Report, Vol I – Planning Commission, GOI (2007)

41 www.ibef.org Uttar Pradesh | December 2008 Business climate of the state

Favourable Policies Unexplored Expanding and Incentives Business Industrial Infrastructure • The state government has • Development of • Significant industrial formulated attractive industrial and urban infrastructure being incentives and subsidies infrastructure under developed including on power, transportation, various PPP models is SEZs, STPs, IIDCs, land and capital a lucrative business which would catalyse investment, to name a option. industrial growth and few, for setting up provide an ideal business in the state. • The opportunities for business climate for investment in the upcoming industries •Special incentives are industrial and urban given to industries such as sector are vast due to IT, export oriented, food the recent reforms processing etc. with state- undertaken to of –the-art infrastructure overcome the lack of facilities. adequate infrastructure.

42 www.ibef.org Uttar Pradesh | December 2008 Business climate of the state

Developed industrial Strong agricultural base to Tourism activities drive the food processing sector • There are large • Comprises 16.4 per cent of the area • UP is one of the top numbers of industries under food grain production (2000- tourist destinations in present in the state, 2001) and 12.33 per cent net area India, with almost 25 per which have grown under cultivation in the country. cent of the all -India through an organic foreign tourists visiting route. • The state is a leader in the production every year. of farm commodities including fruits, • There is considerable vegetables, rice, pulses, etc., in • With its vast wealth of scope of investment in appreciable quantities. monuments, heritage the industries specially and culture, in the areas of agro- • Value of horticultural produce, at development of the based industries, food wholesale price, works out to about tourism infrastructure processing, horticulture, US$ 2.3 billion in the state presents a potential IT, petrochemicals, silk, business opportunity. • The post harvest losses work out to sugar, due to the recent US$ 465 million, offering a great refithttform in the state potential for investment in post-harvest policies. management, distribution networks and the processing industry.

43 www.ibef.org Uttar Pradesh | December 2008 Average cost of doing business in the state

Sr. No. Sector Cost*

1 Manufacturing

A Land price (US$/Sq. mt.) 50 – 75

B Labour (US$/man year) 1,500 – 2,000

C Lease rent (US$/Sq. mt./month) 4 – 6

2 Electricity (US cents)

A Commercial 9 per kWh

B Industrial 8 per kVAh

3 Office space rent (US$/Sq. mt./month) 1,075 – 2,690

4 Residential rent (US$/3 bedroom flat/month) 350 – 930

5 5-star hotel room (US$ per night) 230 – 500

* These costs are merely indicative

44 www.ibef.org Overall state competitiveness

45 www.ibef.org Uttar Pradesh | December 2008 Advantage - Uttar Pradesh

• Largest producer of wheat, pulses, sugarcane, • Well-developed special purpose modern industrial tobacco, potato and milk in the country areas like Software Technology Parks (STP), Electronic City, Toy City, Plastic City, Integrated Agro • Leading manufacturer of office machinery in the Park, Leather Park, Chemical Complex and Textile country (25 per cent) City

• Fourth largest software exporter (US$ 10 billion) in the • Easy availability of land in 239 fully developed country Indu strial areas spread ov er an area of 37, 388 acres • Port facility at doorstep through seven inland freight stations and one cargo complex

• Good quality power supply to industries

• Special facilities to foreign and NRI investors, in the form of incentives in the state policies

• Select cities in UP, such as Noida and Greater Noida being close to Delhi are able to leverage the advantages of being within the National Capital Region (NCR) and have a fully developed infrastructure

46 www.ibef.org Uttar Pradesh | December 2008 Overall state competitiveness

Parameter Uttar Pradesh

Opportunities in type of industry

Tourism

It-based industries

Food processing industry

Pharmaceuticals and bio-tech

Agro-based industry

Mineral-based industry

Engineering industry

Chemicals industry

Handloom and handicrafts sector

Policy incentives

Setting up and carrying out business

Industrial infrastructure-existing and proposed

Power

Transportation

Industrial estates/areas

STP/IT parks

Epip

www.ibef.org 47 Uttar Pradesh | December 2008 Overall state competitiveness

Parameter Uttar Pradesh

Industrial Infrastructure-existing and proposed

EPZ

IIDC

Industrial growth centre

Food processing park

High Medium Low Proposed

48 www.ibef.org Uttar Pradesh | December 2008

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This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Author’s and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.

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