Investment Climate in Uttar Pradesh Investment Climate in Uttar Pradesh Contents Economic and Demographic Profile 1 Economic Profile 1 Demographic Profile 2 Physical Infrastructure 3 Power 3 Roads 3 Railways 3 Dedicated Freight Corridor 4 Delhi Mumbai Industrial Corridor 4 Airports 4 Telecom 4 PPP Projects 4 Social Infrastructure 6 Health 6 Education 6 Industrial Profile 7 Land Availability 8 Industrial Land 8 Agricultural Land 8 Manpower Availability 8 State Policies and Incentives 9 Investments in the State 9 Looking Ahead 10 Annexure : Policies 11 • All data is at constant (2004-05) prices unless explicitly stated otherwise • GSDP stands for Gross State Domestic Product • CSO data accessed on 18 October, 2012 EXECUTIVE SUMMARY Uttar Pradesh is one of the largest states in India. Accounting for 7.3 percent of the country’s area, it is home to 16.5 percent of Indians. The state contributes 8.1 percent to India’s GDP. A series of recent policy initiatives and focus on infrastructure development, supported by availability of skilled manpower, good resource base and a large consumer market all makes Uttar Pradesh an attractive investment destination. Advantage Uttar Pradesh: • New policy initiatives creating favourable policy environment. These include the New Infrastructure & Industrial Investment Policy 2012. In addition, new policies such as Biotech Policy, Food Processing Policy, Solar Policy and Sugar Policy are expected to be announced shortly • Robust industrial infrastructure including theme parks, export parks & SEZs • 57 percent of eastern Dedicated Freight Corridor and 7 percent of Delhi-Mumbai Industrial Corridor will pass through the state • Focus on improving connectivity further through mega road projects, in PPP, such as Yamuna Expressway, connecting Noida with Agra • Abundant agro resource base. Leading producer of wheat, sugarcane and potato, ranks second in vegetable production and third in fruit production, amongst all Indian states • Longest network of rivers and canals measuring 31,200 km fostering the agriculture sector1 • Huge market potential owing to a large domestic consumer base 1 http://udyogbandhu.com 1 Photo : trackreviewers.com Economic & Demographic Profile Economic profile The GSDP of the state stood at Rs 4,200 billion during 2011- 12 registering a CAGR of 7 percent from Rs 2,608 billion during 2004- 05. The GSDP of the state accounts for 8.1 percent of the national GDP. Figure 1 : Growth of GSDP of Uttar Pradesh Figure 2 : Key economic facts 5,000 10.0 Key Economic Indicator (2011- 12) Value 8.1 4,200 3,961 4,000 7.3 3,674 8.0 3,447 GSDP Rs 4,200 billion 6.5 3,222 7.8 6.0 3,002 3,000 2,778 7.0 6.6 6.0 Growth in GSDP 6.0 percent In billion 2,000 4.0 Per Capita Income Rs 18,099 In percentIn National Per Capita Income Rs 37,851 1,000 2.0 Source: CSO - 0.0 06 07 08 09 10 11 12 - - - - - - - 2005 2006 2007 2008 2009 2010 2011 Source: CSO 2 In terms of structure of the economy, the share of the services Demographic profile sector has increased in line with the national trends. Uttar Pradesh is the most populous state of India accounting Figure 3 : Contribution of different sectors towards the economy of Uttar Pradesh for 16.5 percent of the country’s total population.2 The decadal growth rate of population for the state is 20.1 percent as 2004-05 2004-05 2011-12 compared to the national growth of 17.6 percent. The density of 3 population of the state is high at 828 persons per sq km. 22.5 29.7 29.7 Figure 4 : Key Demographic Indicators (2011) 47.0 47.0 53.9 Key Indicators Value 23.6 Population 199.6 million 23.3 23.3 Population size (Males) 104.6 million Population size (Females) 95.0 million Agriculture IndustryAgricultureServicesIndustry AgricultureServices Industry Services Population size (Urban) 44.5 million Source: CSO Population size (Rural) 155.1 million Density of population (persons 828 per sq km) Literacy Rate 69.7% Male Literacy Rate 79.2% Female Literacy Rate 59.3% Sex Ratio (females per 1000 males) 908 Source: Census 2011 (Provisional) 2 Census 2011 (Provisional) 3 Census 2011 (Provisional) Photo : uttarpradeshlive.com 3 Physical Infrastructure Roads Power The national highway in the state is 7,818 km which accounts The state has an installed capacity of 13,683 MW. This includes for 10.2 percent of the total national highways in the country. All 5,222 MW under state utilities, 4,933 MW under central utilities district headquaters to be connected by four lane roads6. and 3,528 MW under the private sector. Of the total installed Figure 6 : Key Road Network capacity in the state, the contributions from various sources are: 4 Road Type Road Length (in km) • Thermal power – 79.1 percent National Highways 7,818 • Hydro power – 13.3 percent • Renewable energy sources- 5.1 percent State Highways 7,922 • Nuclear power – 2.5 percent Major district roads 7,070 Figure 5 : Peak demand – supply position in the State Other district roads 31,238 14,000 22.8 22.1 25 Village roads 110,195 20.4 21.1 12,000 19.4 18.0 20 Source : Public Works Department,Government of Uttar Pradesh, www.nhai.org/ 10,000 statewise1.asp 8,000 15 MW 6,000 10 Railways 4,000 % Deficit Peak 3.7 2.3 5 2,000 The state has 8,763 km of railway network which is the largest 0 0 in the country. The Delhi Metro Rail links Noida and Ghaziabad 05 06 07 08 09 10 11 12 - - - - - - - - with Delhi. There are further plans to increase the connectivity 2004 2005 2006 2007 2008 2009 2010 2011 in a phase-wise manner, for which the Ghaziabad Development Peak Demand Peak Met Peak Deficit % Authority has signed an MoU with the Delhi Metro Rail 7 Source: CEA Corporation . During the last few years, large scale generation capacity has been added in the state - 4,080 MW during 11th Plan and another 16,000 MW is proposed by the end of the 12th Plan. So far, during the first year (2012-13) of 12th Plan 1,000 MW has been added.5 The state has also introduced Input Based Franchisee system in Agra to improve the power distribution mechanism. 4 CEA, August 2012; including allocated shares in joint and central sector utilities 5 Draft National Electricity Plan for 12th Plan, January 2012; CEA 6 Planning Department, Government of Uttar Pradesh 7 Indian Railways Year Book 2010-11 Photo : Jaypee Group 4 Dedicated Freight Corridor Uttar Pradesh is the biggest beneficiary of eastern Dedicated Wireless and wireline service providers in the state include : Freight Corridor project with the share of 57 percent in the total length of 1,839 km8. Dadri is the junction point of eastern & • Bharti Airtel western Dedicated Freight Corridors. Dedicated Freight Corridor • Aircel Corporation of India has proposed to provide rail connectivity to a • Reliance Communication Logistic Park proposed at Kanpur, which is to be built in PPP mode. • Vodafone While the eastern Freight Corridor will provide connectivity to the • Tata Teleservices eastern coalfields of India – which is very important for thermal • Bharat Sanchar Nigam Limited power projects, the western corridor will connect the state to the western and southern markets, and the ports as well. PPP Projects Delhi-Mumbai Industrial Corridor Agra-Lucknow Expressway Delhi Mumbai Industrial Corridor is envisaged along the western This proposed 8-lane access controlled Green Field Expressway Dedicated Freight Corridor. About 150 kms on either side of the from Agra to Lucknow connects Greater Noida to Lucknow via western Dedicated Freight Corridor will be developed as DMIC Agra covering about 530 km presently taking time of around influence area, thus benefitting the industries in the state. DMIC 9 hours. While on construction of expressway from Agra to will start from Dadri in Uttar Pradesh which is also the junction Lucknow, linking Yamuna Expressway, the journey time will point of eastern & western Dedicated Freight Corridors. About 7 drastically reduce to 5 hours and likewise the 6 hours journey of percent of the DMIC region will be located in Uttar Pradesh and 365 km between Agra and Lucknow would reduce to around 3.30 will cover 12 districts located in the northern part of the state hours through this proposed Expressway. adjoining Delhi with a total area of 36,068 sq km. UP Expressways Industrial Development Authority (UPEIDA) has Figure 7: Proposed Industrial Projects under DMIC been nominated as nodal agency for development of expressway. The concept report of the project has been finalized. Bid for Proposed Location Purpose Phase selection of consultant for selection of developer has been issued. Investment Regions (IR): Dadri-Noida-Ghaziabad General Manufacturing Phase IA Northern Peripheral Road, Ghaziabad Industrial Areas (IA): This 4 lane, 20 km long road, start from Delhi Border (Wazirabad) Meerut-Muzaffarnagar Engineering/ Manufacturing Phase IB and ends at Hapur Road. The land requirement for ROW is Source: DMIC estimated at 200 ha. Ghaziabad Development Authority has been nominated as the nodal agency. Consultant has already been selected for preparation of TEFR, bid document for selection of Airports Developer, etc. The state has 6 domestic airports, located at Agra, Allahabad, Highways in the State Gorakhpur, Kanpur, Lucknow and Varanasi. International flights operate from Chaudhary Charan Singh International Airport, The state government through Uttar Pradesh State Highways Lucknow and Lal Bahadur Shastri Airport, Varanasi. During 2011- Authority, an authority set up for maintenance of highways, is 12, Varanasi airport received 747,811 passengers and Lucknow undertaking upgradation/maintenance of state highways in Uttar airport received 2 million passsengers9.