A vibrant' approach

Published : Apr 06, 2012 00:00 IST

Nano cars outside the Tata Motors plant in Sanand.-AMIT DAVE/REUTERS

Nano cars outside the Tata Motors plant in Sanand.-AMIT DAVE/REUTERS

With its Vibrant Gujarat campaign and an aggressive industrial policy, the State hopes to achieve a growth rate of 15 per cent by 2013.

GUJARAT has had for some time the extremely focussed goal of achieving high growth in the industrial and infrastructure sectors. There are of course both long- and short-term targets, but the ultimate goal is to become the top investment destination for the private sector. Although traditionally Gujarat has been at the forefront of industrial and business growth driven by a culture of entrepreneurship, in the recent past it has made a concerted effort to take its ambitions to the next level.

At several conferences and summits on business, State officials have declared that they aspire not only to make the State number one in the country but also a competitive player on the global stage.

The State has extended an open invitation to corporates looking for an investment destination and is doing whatever it can to ensure that they make it their first choice for setting up manufacturing or service units. The government has, among other things, reworked policies and vastly upgraded infrastructure.

Gujarat is believed to have one of the fastest-growing economies in India. It is also one of the most industrialised States, with 38 per cent of its gross domestic product contributed by the secondary sector (finished manufactured goods). Its per capita GDP is almost twice the national average.

When the Gujarat government released its industrial policy for 2009-13, the stated aim was an ambitious 15 per cent growth in that period. Last year it registered a growth rate of 11.05 per cent and looks to be on course to achieve its target.

Key drivers

A good industrial and manufacturing foundation, adequate investment and infrastructure and sound policies are some of the factors that have driven growth in the State over the years, and these are now being exploited to their utmost capacity.

According to a report by the Confederation of Indian Industry, titled Accelerating Growth in Gujarat, the State occupies a distinctive position in the country's economy. Sixteen per cent of India's industrial production is in Gujarat and the State's main strengths lie in petroleum, drugs and pharmaceuticals, and the diamond industry.

Since it has a robust foundation in industry, it has been able to attract significant investment, including foreign direct investment (FDI).

Gujarat is one of the most urbanised States in the country, with nearly 40 per cent of the population residing in urban areas. Therefore, the State's demographics have had a positive influence on industrial growth and is one of its most valuable assets. Besides, competitive labour costs add to the State's overall productivity.

The State has five of the country's top postgraduate institutes and has emerged as a key educational hub. The government has been vocal about the need for public-private partnerships in education. The knowledge industry is an area it is keen on improving.

These key drivers were clearly defined in the Vibrant Gujarat campaign launched in 2009 to showcase the State. The campaign seeks to make Gujarat a global power by 2015. The government has come out with an aggressive action plan that offers industry-specific advantages in a slew of sectors.

The campaign also outlines the advantages of Gujarat's strategic location on the west coast. Connectivity is easy with major ports in the United Kingdom, Australia, and those of the West Asian and East Asian economies.

Gujarat has 41 ports and offers numerous opportunities for port-based industries. According to the government, ports in Gujarat handled 205 million metric tons of cargo traffic in 2009-10, and this is expected to increase to over 500 MMT in two to three years. Around 22 per cent of Indian exports are contributed by Gujarat, says the State government.

Gujarat's contributions to various sectors are as follows: close to 80 per cent in salt processing and diamond processing, 35 per cent in pharmaceuticals, 50 per cent in chemicals, 62 per cent in petrochemicals and 65 per cent in plastic industry. Gujarat, more specifically Surat, can easily be called the diamond processing capital of India.

Excellent infrastructure

The State attracts investment because of its excellent infrastructure: a 1,37,617-kilometre road network, a 5,188-km rail network and a 2,200-km integrated State-wide gas grid (the only State to have one). It has more airports and ports than any other State.

It is a power-sufficient State as it has 23 power plants and the highest per capita power consumption.

The Sardar Sarovar project on the Narmada river is expected to provide water to areas across the State.

Gujarat is the hub of the chemical industry in India. More than 6,600 chemical and petrochemical products are produced in the State.

Gujarat contributes 53 per cent and 31 per cent respectively to India's total production of crude oil and natural gas. It has the highest number of gas wells in India, making it an easy choice for global petroleum companies.

In the engineering sector, there are more than 30 industrial clusters and this number is increasing. With Tata Motors setting up its Nano plant in Sanand and Mahindra & Mahindra in talks to set up a factory close to Ahmedabad, the State is being endorsed by the auto industry.

The food and agro sector is being given a boost. Out of the total geographical area of 196 lakh hectares, the total cropped area is 128 lakh ha.

There are huge investment opportunities in the mining and mineral sector as the State is looking to add capacity in the sector. Gujarat has one of the highest reserves of lignite, limestone, perlite and clay deposits in India and is the only producer of chalk and agate in the country. There are 6,500 mineral-based industries in the State.

Historically, Gujarat has housed the pharmaceuticals sector: It has more than 50 biotechnology companies and 66 support organisations.

Another major industry in the State is textiles. The State produces a lot of cotton and denim. Technical textiles is an emerging area, and there are over 860 units catering to it, says the government.

An extensive plan to attract investment was put in place with the release of the 2009-13 industrial policy. The government has made a concerted effort to simplify the procedures to set up businesses or to support existing ventures. A single-window approach for investors has been a move that has worked successfully.

The industrial policy will focus on human resource and assures institutions of support as the government believes that this has a ripple effect. Businesses will benefit by tapping into these resources and will in turn provide more employment.

Special investment regions

The Delhi-Mumbai Industrial Corridor (DMIC) area, which is to be developed as a Global Manufacturing & Trading Hub in two phases, will be supported by world-class infrastructure and an enabling policy framework. Twelve special investment regions, with an area of more than 100 square km, are being planned.

A petrochemical and petroleum investment region, 60 special economic zones and the existing 200 industrial areas will create opportunities across sectors. There are plans to develop new industrial areas for agro parks, tourism, recreation, and information technology.

The industrial policy states: Gujarat aspires to become a beacon of comprehensive social and economic development. The State definitely has a bright future ahead of it.

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