MADHYA PRADESH November 2010 1 MADHYA PRADESH November 2010 Investment climate of a state is determined by a mix of factors • Skilled and cost-effective labour • Procedures for entry and exit of firms • Labour market flexibility • Industrial regulation, labour regulation, other • Labour relations government regulations • Availability of raw materials and natural • Certainty about rules and regulations resources • Security, law and order situation Regulatory framework Resources/Inputs Investment climate of a state Physical and social Incentives to industry infrastructure • Condition of physical infrastructure such as • Tax incentives and exemptions power, water, roads, etc. • Investment subsidies and other incentives • Information infrastructure such as telecom, IT, • Availability of finance at cost-effective terms etc. • Incentives for foreign direct investment (FDI) • Social infrastructure such as educational and • Profitability of the industry medical facilities 2 MADHYA PRADESH November 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 3 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Madhya Pradesh – State profile … (1/2) • Madhya Pradesh is located in central India. The state covers area of 308,000 sq km and has population of around 60.3 million. • Until November 2000, Madhya Pradesh was the largest state in India, when the state of Chhattisgarh was carved out of it for ease of administering a large state. • The state, now, has 50 districts. Its administrative capital is Bhopal and its largest city is Indore. Other key cities are Gwalior, Jabalpur and Ujjain. • Madhya Pradesh has two major rivers flowing through it: the Narmada and the Tapi. Source: Maps of India 4 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Madhya Pradesh – State profile … (2/2) • There are 11 agro-climatic conditions and a variety of soils available in the state to support cultivation of a wide range of crops. • Around 31 per cent of the total area of the state is forest land which is over 12 per cent of the total forest area of India. • The most commonly spoken language of the state is Hindi. English and Marathi are the other languages used. Source: Maps of India 5 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Advantage Madhya Pradesh … (1/2) Central location of the state Being centrally located, companies in the state have access to key consumer markets and major cities such as Delhi (740 km*), Mumbai (780 km*), Kolkata (1,350 km*) and Chennai (1,430 km*). Because of this advantage, a large number of consumer goods companies have manufacturing bases in the state. Policy incentive The state offers wide range of fiscal and policy incentives for businesses under the Industrial Promotion Policy - 2004 & Action Plan (including the provisions as amended in 2007). Additionally, the state has policies for the IT, biotechnology, food processing, tourism sectors and special economic zones (SEZ). Agricultural and forest resources Around 31 per cent of the state is under forest cover with Source: Maps of India abundant natural resources. Favourable soil and climatic conditions have helped the state to be leading producer of coarse cereals, oilseeds and soybean in the country. The state has attracted a large number of agro-based industries because of its agricultural products. * From Bhopal 6 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Advantage Madhya Pradesh … (2/2) Mineral resources Madhya Pradesh has rich mineral resources and has the largest reserves of diamond and copper in India. Besides, the state has significant reserves of coal, coal-bed methane, manganese and dolomite. Large industrial base The state is manufacturing base for a number of large and medium scale industries from diverse sectors such as automobile and auto- components, cement, agro-processing, consumer goods, pharmaceuticals, etc. It also has a large pool of industrial labour. Potential for tourism Because of its forest cover, the state has immense potential for tourism, particularly, wild-life and adventure tourism and eco-tourism. It also has Source: Maps of India globally renowned locations of historical and religious significance. The state attracts large number of domestic and international tourists. 7 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Madhya Pradesh in figures … (1/2) Parameter Madhya Pradesh All-states Source Economy GSDP as percentage of all states‟ GSDP 3.6 100.0 CMIE, as of 2007-08, current prices CMIE, 2000-01 to 2007-08, current Average GSDP growth rate (%)* 8.8 11.8 prices Per capita GSDP (US$) 519.3 992.5 CMIE, as of 2007-08, current prices Physical infrastructure Central Electricity Authority, Installed power capacity (MW) 8,324.0 159,398.5 as of March 2010 Cellular Operators Association of India, GSM cellular subscribers (No) 25,010,843 456,586,162 as of June 2010 Broadband subscribers (No) 168,951^ 4,981,976 As of October 2008 Ministry of Road Transport & Highways, National highway length (km) 4,670 70,548 Annual Report 2008-09 Airports (No) 5 133 Industry sources Social indicators Literacy rate (%) 63.7 64.8 Census of India, 2001 Ministry of Health & Family Welfare, Birth rate (per 1,000 live birth) 28.0 22.8 RHS Bulletin, March 2008 * In Indian rupee terms ^Includes Chhattisgarh 8 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Madhya Pradesh in figures … (2/2) Parameter Madhya Pradesh All-states Source Ease of doing business Department of Industrial Policy & Promotion, FDI inflows (US$ billion) 0.2* 120.2 April 2000 to May 2010 Outstanding investments 78.4 1,972.6 CMIE, as of March 2010 (US$ billion) Industrial infrastructure PPP projects (no) 39 515 www.pppindiadatabase.com Functional as of August 2010, SEZs (No) 1 114 www.sezindia.nic.in *Includes Chhattisgarh PPP: public private partnership, SEZ: special economic zone Parameter Madhya Pradesh Government Policy support Sectors with specific policies IT, biotechnology, SEZ, tourism, food processing Availability of labour Large base of industrial labour available. 9 ADVANTAGE MADHYA PRADESH Madhya Pradesh November 2010 Key industries with policy thrust and factor advantages Industry attractiveness matrix High Pharmaceutical and IT and ITeS Tourism biotechnology Textile Agro- and Auto and auto forest-based components industry Food processing Minerals Manufacturing Medium Consumer goods Policy thrust Policy Low Medium High *Factor advantage *Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital 10 MADHYA PRADESH November 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 11 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh November 2010 Socio-economic snapshot of Madhya Pradesh Parameters Madhya Pradesh Capital Bhopal Geographical area (sq km) 308,000 Administrative districts (No) 50 Population density (persons per sq km) 196 Total population (million) 60.3 Male population (million) 31.4 Female population (million) 28.9 Decadal population growth rate (%) 24.3 Sex ratio (females per 1,000 males) 919 Literacy rate (%) 63.7 Male (%) 76.1 Female (%) 50.3 Average life expectancy (years) 57.7 Sources: Website of Government of Madhya Pradesh (www.mp.gov.in), CMIE, Census 2001 12 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh November 2010 Madhya Pradesh‟s GSDP • At current prices, the Gross State Domestic Product (GSDP) of Madhya Pradesh for 2007-08 was US$ 35.4 billion. • Between1999-2000 and 2007-08, the average annual GSDP growth rate was 9.5 per cent. • The growth in GSDP has primarily come about as a result of the growth in mining and quarrying, construction and services sectors. Madhya Pradesh‟s GSDP (US$ billion) 40.0 35.4 CAGR 31.1 9.5% 30.0 26.0 23.5 23.6 18.1 19.0 20.0 17.2 16.4 10.0 0.0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Source: CMIE 13 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh November 2010 Madhya Pradesh‟s NSDP • The Net State Domestic Product (NSDP) of Madhya Pradesh was about US$ 30.7 billion in 2007-08. • The average NSDP growth rate between 1999-2000 and 2007-08, was about 8.8 per cent. Madhya Pradesh‟s NSDP (US$ billion) 40.0 CAGR 30.7 30.0 8.8% 27.0 22.7 20.8 20.7 20.0 16.2 16.8 15.6 14.7 10.0 0.0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Source: CMIE 14 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh November 2010 The tertiary sector has an increasing share in Madhya Pradesh‟s economy • In 2007-08, at US$ 16.6 billion, the tertiary Percentage distribution of GSDP sector contributed 46.8 per cent to the GSDP 100.0% CAGR at current prices. It was followed by the primary sector, contributing US$ 10.9 billion (30.7 per 80.0% 46.0 46.8 9.7% cent), and the secondary sector, contributing 60.0% US$ 8 billion (22.6 per cent). 40.0% 20.6 22.6 10.7% • The secondary sector has also been the fastest 20.0% 33.3 30.7 growing at 10.7 per cent from 1999-2000 to 8.3% 2007-08, followed by the tertiary and primary 0.0% sectors. 1999-00 2007-08 Primary sector Secondary sector Tertiary sector Source: CMIE 15 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh November 2010 Per capita GSDP • The per capita GSDP of Madhya Pradesh increased almost 1.8 times from US$ 293.1 in 1999-2000 to US$ 519.3 in 2007-08. • In 2007-08, the per capita GSDP grew at about 12 per cent over the previous year.