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Investment climate in
M.P.
The new Madhya
Pradesh government is committed to “Growth with Employment”. To
facilitate “Growth with Employment” the M.P. Govt. has taken bold
policy initiatives & has drawn out strategies to ensure desired
outcomes from these policy frame works.
A brief summary
of Industrial development and Investment Scenario in Madhya Pradesh
is given below:
MADHYA PRADESH INDUSTRIAL DEVELOPMENT SCENARIO:
Earlier days the
investments used to follow trade but in the present global scenario
trade is followed by pouring investments in opportunity areas. All
recent reports from FICCI, World Bank, Mckinsey & others have
confirmed that investments in Infrastructure, Manufacturing,
Agriculture & Service sectors fuel growth. These reports also
suggest that the G.D.P. growth of India can be enhanced by at least
2-3% points if the procedural bureaucratic delays can be avoided.
Taking cue from these two focal points the new Madhya Pradesh
Government has put forward its vision, & strategies to meet the
national objective of attaining 8-10% annual GDP growth on a
sustained basis. The Madhya Pradesh Government has now come up with
Industrial Promotion Policy, 2004 (being restructured again based on
feedbacks from Investors).
It is advantageous to set up units in Madhya Pradesh because the
land and knowledge workers are available at a very low cost. It is
an industrially peaceful state with fewer law & order problems. As
per the CMIE report September 2009, Investment proposals worth about
Rs. 3, 19,418 crore ($67b approx) are in different stages of
consideration in Madhya Pradesh.
Never before has the investment climate been so upbeat.
To a great extent, the Industrial Policy 2004 is responsible for
generating an atmosphere of confidence in industry. This is a new
Madhya Pradesh, which truly means "Business". Whether in the field
of infrastructure or manufacturing or the service sector, fresh
investments are pouring into Madhya Pradesh.
On it's part, the Madhya Pradesh Government is making every possible
endeavor to market the State, invite investments, and offer
incentives and conducive environment to facilitate fresh
investments.
HIGHLIGHTS OF INDUSTRIAL
POLICY – 2004-2007
A promotional
assistance equivalent to 50-75% of the Commercial Tax & Central
Sales Tax deposited in the first year shall be given in the second
year. This promotional assistance shall be given for 3-10 years
depending upon the category of the district & the amount of
assistance shall not be more than the total investment of the
installed unit.
v Special package for
mega project.
v Concession/Exemption
of stamp duty.
v Exemption from
”Electricity Duty” for first 5 years on Captive power generation.
v Partial
reimbursement of expenditure for Quality Certification.
v Capital Investment
Subsidy, Exemption from Entry Tax for 5 years.
v Subsidy to Industry
under thrust sector, Exemption from Mandi Tax for Agro Processing
Industry.
TEXTILES:
Madhya Pradesh has
traditionally been one of the leading states in the field of
textiles. Indore was the city where the first mega mills: Hukumchand
Mills, Raj Kumar Mills, Hope Textiles etc. were established. Once
again the textile sector in Madhya Pradesh is throbbing with
activities.
Mahavir Spinning Mills of Ludhiana (SP Oswal Group) has set up an
integrated textile mill at a total investment of almost Rs. 850
crore, which is now being revised to Rs. 1900 crore (in two phases)
by attracting other cluster based industries like garment & knitting
etc. Trident group of Barnala, Punjab has set up a Mega Textile
Project in Budhini with investment of Rs 350 Crore. An Apparel Park
for integrated textile units is being built up within the SEZ in
Indore. This will have State of the Art Common Effluent Treatment
Facilities (CETP). Separately a ready-made garment complex has also
been built in Pardesipura in Indore.
Auto Sector:
Auto manufacturing & Auto components units have a sizable presence
in Madhya Pradesh. Companies like Bajaj Tempo, Eicher & Hindustan
Motors have their units at Pithampur near Indore. It is projected
that fresh investments of almost Rs. 1000 crore from the Auto and
Auto Components Industries shall come in soon.
The Government of India, through the Department of Industrial Policy
& Promotion (DIPP), Ministry of Commerce & Industry, has formulated
an Industrial Infrastructure Upgradation Scheme (IIUS), targeted at
improving the global competitiveness of functional clusters in the
country through the provision of grant funding for the creation of
quality infrastructure.
The automotive cluster in Pithampur near Indore is one of the
identified clusters under the IIUS. Under the IIUS, the Government
of India will provide a grant of up to 75% of the total cost of
infrastructure creation and upgradation in the identified clusters,
subject to a limit of Rs. 50 cr per cluster. The balance investment
requirements would be financed by local (cluster) stakeholders, with
cluster industry contribution at a minimum level of 15% of the total
project cost. An Auto cluster is being developed at Pithampur to
make it India's most vibrant hub for the production of Medium/Heavy
Commercial vehicles for passengers/cargo. Likely turnover of OEM in
Pithampur area will be Rs. 10,000 crore in the year 2009-2010, and
Auto Components industry will have estimated turnover of Rs. 4,500
crore in 2005-2010.
A separate company has been set up for the development of this Auto
Cluster called "Pithampur Auto Cluster Limited". This is going to be
a professional company. Pithampur is one of the largest Growth
Centres in Central India and a well-developed industrial town of
Madhya Pradesh. Located 30 kms from the city of Indore, the Growth
Centre is spread across an area of nearly 1,900 hectares. With about
122 medium and large-scale industrial units, and more than 455
small-scale industries, Pithampur has attracted cumulative
investment of over Rs. 68,250 million and today provides employment
to approximately 25,000 people. The automotive industry is one of
the most significant constituents of the Growth Centre
A proposal for setting up an "Auto Testing Track" involving an area
of more than 4000 acres of land near Pithampur is under process and
the land for the same has been acquired.
Food, Agro Processing &
Herbal:
Madhya Pradesh is the largest producer of oil seeds & pulses in
India. 60% of country's Soybean & 40% of Gram is grown here. Madhya
Pradesh is the largest producer in India of spices such as Garlic &
Coriander. Internationally exportable variety of wheat & potato are
grown here.
11 out of 18 Agro climatic zones in India pass through Madhya
Pradesh. Rare species of medicinal plants are grown in 10000
hectares.
The knowledge pool on Agriculture & Herbal sector is very high in
M.P. It could be an ideal State for investments in Agro, Herbal &
Bio tech sectors, because of its biodiversity.
Legal frame work for Contract framing is operational in M.P. & is
benefiting thousands of farmers.
In spite of being the 2nd leading State in the areas of
fruits & vegetables in India, the food-processing sector in Madhya
Pradesh is relatively un-developed. Now it is being treated as a
thrust sector in the New Industrial Policy and various concessions &
incentives have been provided for this sector. Investment proposals
for more than Rs. 200 crore are in the offing. Many proposals for
organic farming and production and herbal products have been
received.
In the year 2003-2004 Government of India has sanctioned six
"Agriculture Export Zones" (AEZ) for six agro products in Madhya
Pradesh. This initiative would strengthen the infrastructure in Food
Processing.
The M.P. villages are well connected by ITC-E chaupal model and
contract farming is being done by corporate sector. Notable among
them is Pepsi, which is doing contract farming in 10000 ha of land
in Ujjain division for potato farming (Chip variety).
Gems & Jewellery:
Madhya Pradesh has the only running Diamond mine (at Panna) in the
country.A state of art Gems & Jewellery park at Indore with an area
of 18,1999 sq. meters is under construction.
Cement:
M.P. is the third largest producer of cement in the country. It
caters to 13% of the National demand. The state is rich in cement
producing minerals & the logistical advantages of these sites
reduces the overall cement manufacturing & supply chain cost,
helping the cement companies to get a higher return on investment
(ROI).
The state has the appropriate know how & knowledge pool to run
cement plants. At present several major groups like Birla
Corporation, Vikram Cement, Prism Cement, J.P. Rewa, Diamond
Cements, Maihar Cement & ACC own manufacturing plants in Madhya
Pradesh. Out of these units J.P. Rewa & ACC are in process of
investing Rs. 1100 crore ($ 24 Million approx.) for expanding their
production capacities.
ENGINEERING/ELECTRICAL
ENGINEERING INDUSTRIES:
Government of India has identified Govindpura, Bhopal as an
Engineering Cluster destination. In the year 2002-2003 the total
production of engineering goods from Govindpura was Rs. 350 crore ($
76 Million approx), which is likely to double in next 5 years.
Due to large sum of money being invested in power sector, all the
electrical Engineering industries are likely to grow at a rapid pace
& locations like Bhopal & Indore can expect an investment of Rs. 450
crore ($ 100 Million approx) in next 5 years.
Potential areas:
- International Standard Tool Room.
- Up gradation of ITI (Industrial Training Institutes).
-Setting up light manufacturing units & heavy Engineering.
Information Technology:
Various facilities are
available in Madhya Pradesh for starting of Call Centers and IT
units. A fully integrated IT Park known as the Crystal IT Park is
being built at Indore. It has 32740sq meters(3.5 lakh sq.ft.) built
up space. It will be an intelligent building with all modern
facilities and management systems etc. A Rs. 100.00 crore ISRO
facility has started functioning at Bhopal from April, 2005 this
would enable IT related industry to grow around Bhopal. At last; the
stage has been set for IT growth in Madhya Pradesh, which now has
107, Engineering Colleges & one National Institute of Information
Technology and Management at Gwalior.
Government of India has
recently sanctioned an Institute of Information Technology & Design
at Jabalpur.
Special Economic Zone (SEZ) BENEFITS:
M.P. has the first operational SEZ (at Pithampur) near Indore in the
country, with several units starting their Commercial Production in
December 2004. Already more than 15 units have started their
preliminary project related work at the SEZ. The benefits of
investing in SEZ Indore are - complete exemption from all state
taxes duties, levies & liberalized labour laws; power supply on no
loss-no profit basis; all the other benefits announced by Government
of India for SEZ are also available; all the support facilities like
offshore banking, post office & custom are available at SEZ with an
added facility of a "Dry Port".
On similar lines, investors can build their own SEZ at Bhopal,
Indore or any other place.
INFRASTRUCTURE:
The state has developed
an excellent infrastructure. It has 19 Industrial Development
centers, 129 Industrial Areas, 6 (six) food parks, 8 integrated
development centers, one stone park, one SEZ at Indore, 3 dry parks,
one IT park, and one apparel park at Indore.
The Madhya Pradesh State Industrial Development Corporation &
Industrial Development Corporation Indore have taken up an 80 crore
project to bring water from Narmada river (from Nemawar which is 128
kms away from Dewas.) to Dewas under BOT scheme.
This project will not only solve the water problems of 460
industries located at Dewas but will facilitate further
industrialisation of Dewas Industrial Belt.
Another project of Industrial hazardous waste disposal is being
mooted near Indore to take care of Industrial waste generated at
various places in Madhya Pradesh.
2000 Kms of road projects are already being completed under the BOT
scheme in which, for the first time, private sector participation
has ensured that Government spends only 50% of the capital cost of
renovating the roads. Another 1100 Kms. of roads are to be completed
under an Asian Development Bank Road Project. Further, another 2000
Kms. of road are planned on a BOT basis. This would take care of
almost all major State Highways.
POWER:
Apart from on-going projects on the river Narmada at Punasa and the
Onkareshwar Project, several other projects are being flagged off.
The Maheshwar Hydro Electric Project shall start its work soon.
Madhya Pradesh Govt is setting up a 1000 Mega Watt Thermal Power
Plant at Khandwa.
We are striving hard to make M.P. a power surplus state by the year
2011. This means that we shall have sufficient power for Agriculture
use in next 2-3 years. Power reforms like bifurcation of State
Electricity Board into 3 organizations has already taken place and
the Electricity Regulatory Commission is in operation. Following are
the major power projects coming up in the state.
|
Name |
MW |
|
Reliance Energy Ltd. |
4000 MW |
|
Essar Power Ltd. |
1000 MW |
|
BLA
Power |
140 MW |
|
Malwa TPS |
2*500 MW |
|
Sanjay Gandhi Birsinghpur- Unit V |
500 MW |
Law, Order & Industrial
Harmony:
The laws and order situation is satisfactory and on the labour
front, reforms are being initiated as per new Industrial Promotion
Policy 2004. It’s a matter of pride that no of man days lost is less
than 1% of the total man days available during the period of last 5
years.
MADHYA PRADESH TRADE &
INVESTMENT FACILITATION CORPORATION LTD. (TRIFAC):
This is a Single Table clearance facility wherein the investor
submits his project proposals for initial approvals.
Under the Single Table System - Clearance pertaining to departments
of Housing & Environment, Madhya Pradesh State Electricity Board,
Food & Drug Administration, Energy, Commercial Taxes, Revenue,
Labour, Industry & Urban Administration are issued in a time bound
manner.
The Chief Minister chairs an Apex Committee for mega projects. The
committee has so far given clearances to 121 mega projects worth
approx $ 13.56 billion.
The Chief Secretary chairs the Project Clearance & Implementation
Board (PCIB) for speedy clearances to project proposals &
monitoring progress. PCIB has so far cleared projects worth approx
$ 39.37 billion.
The bottom line is that Madhya Pradesh is now making rapid strides
towards socio-economic progress with an eye on globalization. The
Industrial Promotion Policy – 2004-07, a friendly & committed
bureaucracy (as reported in leading newspapers) with right kind of
strategies & people's participation shall usher a new era of
development in Madhya Pradesh. The sleeping giant, Madhya Pradesh is
awakening.
Major investment proposals on the anvil
|
Major Proposed Mega Investments
(Manufacturing Sector) |
|
Name |
Rs. Cr. |
US $ Mn |
|
BORL (Bina Refinery) |
10,300 |
2060 |
|
Hindustan Aluminium Co
(Aditya Birla Grp.) Phase I
Phase II |
7,700
12,300 |
1540
2460 |
|
ACC Cement |
1,260 |
252 |
|
Satna Cement |
1200 |
240 |
|
Prism Cement |
800 |
160 |
|
Jay Pee Rewa Cement |
650 |
130 |
|
Bridgestone |
600 |
120 |
|
Bhilai J.P. Cement Ltd. |
421 |
84.2 |
|
Nahar Poly Films Ltd. |
300 |
60 |
|
Cummins Turbo Technologies |
180 |
36 |
|
Liugong (India) Pvt. Ltd. |
164 |
32.8 |
|
Regent Drugs (TEVA Pharma) |
108 |
21.6 |
|
TOTAL |
35983 |
7196.6 |
|
Major Proposed Mega Investments
(Infrastructure Sector) |
|
Name |
Rs. Cr. |
US $ Mn |
|
Reliance Energy Ltd. |
20,000 |
4,000 |
|
Essar Power Ltd. |
8,000 |
1600 |
|
Auto Testing Track (NATRIP) |
434 |
86.8 |
|
BLA Power |
300 |
60 |
|
GAIL |
276 |
55.2 |
|
TOTAL |
29010 |
5802 |
 |
