EASEEASEEASEEASE OFOF OFOF DOINGDOING DOINGDOING BUSINESSBUSINESSBUSINESSBUSINESS CASECASE STUDY STUDY - SRI - SRI CITY CITY What's Ease of doing business ? The Ease of Doing Business (EODB) index is a ranking system established by the World Bank Group. In the EODB index, ‘higher rankings’ (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of prop- erty rights. Rankings and weightage on each of the following parameters are considered to assign an overall EODB ranking for any country. A high EODB ranking means the regulatory environment is more conducive for starting and operating of businesses. Starting a Business Protecting Minority Investors 01 Dealing with Construction Permits Paying Taxes Getting Electricity Trading across Borders Registering Property Enforcing Contracts Getting Credit Resolving Insolvency 02 India registers its Highest ever increase in Ease of Doing Business Rankings World Bank’s rankings acknowledge India’s reform trajectory under PM Modi THEN NOW INDIA’S 90 100 RANKING IN 100 TERMS OF 110 Rank 120 130 132 132 EASE OF 130 134 142 130 DOING 140 150 BUSINESS 2011 2012 2013 2014 2015 2016 2017 For the year 2018, based on the rankings and weightage on each of the above parameters, India achieved highest ever jump to rank 100 out of 190 countries. Compared to last year rankings, it jumped 30 spots. With this year's performance, India became the �irst ever country to record highest jump in World Bank's ease of doing business ranking. ase of oin siness What India Inc wants from Government ... A rethink on the economic agenda, apart from better incentives for industry such as a lower corporate tax rate, are required immediately if the investment cycle is to be revitalised. Relaxation of fiscal consolidation targets for the next year or two ranked high on the list of suggestions made by industry bodies. State governments should also be discouraged from curtailing capital investments, while the Centre ramped up its expenditure in highways, low-cost rural housing, rural and urban infrastructure, among other sectors. Reducing interest rates by 100 basis points over the next year to spur consumption. Apart from better ease of doing business, finance and cost of finance need to come down quickly, especially for SMEs. Ease of doing business in India What foreign investors really want ? Domestic market size Physical infrastructure Macroeconomic stability Political stability and security A favorable exchange rate Legal and regulatory environment Labor force talent and skills Ease of Doing Business (Overall State Ranking) Rank State Score Rank State Score 1 Andhra Pradesh 98.78% 13 Karnataka 88.39% 2 Telangana 98.78% 14 Uttar Pradesh 84.52% 3 Gujarat 98.21% 15 West Bengal 84.23% 4 Chhattisgarh 97.32% 16 Bihar 75.82% 5 Madhya Pradesh 97.01% 17 Himachal Pradesh 65.48% 6 Haryana 96.95% 18 Tamil Nadu 62.80% 7 Jharkhand 96.57% 19 Delhi 47.62% 8 Rajasthan 96.43% 20 Kerala 26.97% 9 Uttarakhand 96.13% 21 Goa 18.15% 10 Maharashtra 92.86% 22 Tripura 16.67% 11 Odisha 92.73% 23 Daman & Diu 14.58% 12 Punjab 91.07% 24 Assam 14.29% Parameters Setting up a business Obtaining infrastructure related utilities Allotment of land and obtaining construction permit Registering and complying with tax procedures Complying with environment procedures Carrying out inspections Complying with labour regulations Enforcing contracts Source: World Bank Report , October 2016 SEZ - Special Economic Zone The Indian economy has gained considerable momentum over the last one decade, by achieving and sustaining an annual GDP growth rate of over 7 per- cent. This high growth rate can be in part attributed to the growing contribu- tion of the export sector to the economy India Export – Import Scenario 2015 – 2016 Data: All Figures are in Billion USD Rank Country Export Import Total Trade Trade Balance 1 China 8.67 59.34 68.02 -50.67 2 USA 38.71 20.95 59.66 17.76 3 UAE 29.12 18.63 47.75 10.49 4 Saudi Arabia 6.14 19.47 25.61 -13.33 5 Switzerland 0.95 18.52 19.47 -17.57 6 Germany 6.82 11.62 18.44 -4.79 7 Hong Kong 11.69 5.82 17.52 5.87 8 Korea 3.41 12.54 15.94 -9.13 9 Indonesia 2.73 12.54 15.27 -9.81 10 Singapore 7.42 7.01 14.43 0.42 Total of Top countries 115.67 186.44 302.12 -70.77 India's Total 251.85 365.45 616.14 -113.60 % Share of Top Countries 45.93% 51.02% 49.03% Source: Ministry of Commerce and Industry, GoI FDI Out of Asia – Paci�ic Courtesy: fDi Report 2016 FDI into Asia – Paci�ic Courtesy: fDi Report 2016 Objectives of SEZ Act • Generation of additional Economic Activity • Promotion of Exports of Goods and Services • Promotion of Investment from Domestic and Foreign sources • Creation of Employment Opportunities • Development of Infrastructure Facilities Export Performance of SEZs Exports Growth over Years Value in Rs. Crores Billion USD Previous Year 2005-2006 22,840 5.08 2006-2007 34,615 7.69 51.6% 2007-2008 66,638 14.81 92.5% 2008-2009 99,689 22.15 49.6% 2009-2010 2,20,711 49.05 121.4% 2010-2011 3,15,868 70.19 43.1% 2011-2012 3,64,478 81 15.4% 2012-2013 4,76,159 88.18 30.6% 2013-2014 4,94,077 82.35 3.8% 2014-2015 4,63,770 70.26 -6.1% 2015-2016 4,67,337 69.75 0.8% Exports from Operational SEZ from 2005 to 2016 Source: www.sezindia.nic.in Importance of Manufacturing • India needs to create 1 Million jobs per month • Only Large Scale Manufacturing can help this process • SEZs are one of the cheapest ways of creating jobs in manufacturing • Once we start manufacturing, Skill Development will go hand in hand India Vs China Courtesy: fDi Report 2016 International Relevance Like Shenzhen… Like Suzhou … Sri City … Charting a Success Story CASE STUDY When Boundless Imagination Meets Relentless Determination... History is in the Making. Since 2007, Sri City has been Charting the History of the Satyaed Region... • By laying the Foundations of Growth on dry & barren lands. • By generating Employment and Economic activity in a backward area. • By spurring the Spirit of Entrepreneurship among local youth. • By balancing Economic Development and Ecological Sustainability. • By transforming an Agrarian State into a Modern Industrial State. • By enabling a region that once depended on nearby cities for its livelihood, to start writing its own destiny. Our Vision VISION To create a world-class smart business destination that provides Everything a Business Needs by striking a perfect harmony between Industrial Growth, Environment, and Social Responsibility Highlights Sri City is located in Andhra Pradesh which is ranked as No. 1 State in India by 1 World Bank for ease of doing business Spread over 7,500 acres of land, in close proximity to Chennai. 2 Land fully acquired and owned by Sri City Integrated Development - Work-Live-Learn-Play model 3 Multi-Product SEZ + FTWZ + DTZ + EMC + Social Infrastructure Strategic location with excellent connectivity – 55 KMs from Chennai along NH 16 4 (formerly known as NH5) on the border of Andhra Pradesh and Tamil Nadu Dedicated Social Infrastructure 5 Residential, Educational, Health Care, Retail and Leisure All statutory approvals in place – Single Window Clearance in 21 days, On-board Customs, IALA 6 (Industrial Area Local Authority) exclusive to Sri City Investment & Employment (Generated + Proposed) 7 Investment over `25,000 Cr & Employment over 35,000 Highlights Units in Sri City have exported over Rs. 2,400 Crores till date and exports in the current 8 year 2016 – 2017 is estimated to be over Rs. 600 Crores 9 Robust Internal World Class Infrastructure Skills Development Centre 10 Employability training to local people by Sri City HRD Academy, IL & FS, TVS Training and Siemens 11 Green Initiatives - Progressing towards being 100% Carbon Neutral Zone 12 Already home to over 165 companies – representing 27 countries Slated to be home to more than 350 Companies With employmentExports from potential Sri City of –200,000 Over ` 1300 cr 13 and with more than 500,000 residents Engaged world-class consultants such as Jurong, JLL, Marc Gilbert & Associates and 14 several others with tremendous expertise in design, planning and construction Sri City today is a Functional Business City Development Model Work Play Learn Industrial Zone Lifestyle & Leisure Zone • SEZ + DTZ + FTWZ • Live • Electronics Manufacturing • Educational Institutions Cluster – EMC • Healthcare • Food Processing Zone • Commercial and Retail • Apparel Zone • Leisure / Recreation / Sports Academy • Business Parks • Housing • Functional Partnership with GoI & GoAP • Service providers & Vendor Network THE JOURNEY 2016 2014 2012 2010 2008 2008 Sri City Breaks Ground Groundbreaking ceremony of Sri City graced by the then Hon’ble Chief Minister of Andhra Pradesh, (late) Shri. Y.S. Rajasekhara Reddy and his ministerial colleagues 2008 Sri City HR Academy: Enabling better Livelihoods 2008 • Infrastructure development continues unabated • Venture from South Africa signs up as first client • BFG, VRV Group, & Saakar also come on board to set up their facilities at Sri City 2009-10 • Downturn hits global economy & pace of new investments slow down • Sri City continues with infrastructure development in order to be ready when economy gathers pace again • 50 Km of internal roads laid 2011 • Despite difficult macro-economic conditions, 20 new units start operations in Sri City • Alstom Transport of France signs up to manufacture Metro Rail coaches for Chennai Metro & Kochi Metro projects • Sri City signs with Chinmaya Vidyalaya to start a CBSE school 2012 • FMCG & Food majors like Pepsico, Cadbury, and Colgate Palmolive sign up with Sri City • Isuzu Motors signs up with Sri City to build a commercial vehicle manufacturing facility with investment of INR.