Investment Climate in Haryana

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1 Investment Climate in Haryana

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3 HARYANA PAGE 3 Table of Contents Table of Contents Executive Summary... 4 Haryana - Select indicators... 5 Economic Overview of the State... 6 Economic performance...6 People - Economic prosperity... 6 Industrial performance... 7 Industrial centres... 7 Investments... 8 Haryana s contribution to exports... 9 Labour Force... 9 Infrastructure...10 Industrial infrastructure...10 Educational and Training infrastructure...11 Medical & Health Care Facilities...11 Infrastructure for savings and borrowings...12 Physical infrastructure...12 Key Nodal Agencies...13 Policy Framework...15 Industrial Policy Information Technology Policy Key industries and players...16 Agro-based industries...16 Textile industry...16 Automobiles & Auto Components industry...17 Petro-chemicals industry...18 Real Estate & Construction industry...18 Retail & location-based Entertainment...19 IT/ITES and Electronics industries...19 Doing Business in Haryana...21 Contact Information...22 Appendix...22 A report by ICRA for IBEF

4 Executive Summary Regulatory Framework Resources/Input Investment Climate of a State Physical & Social Infrastructure Incentives to Industry Investment climate is a broad concept, encompassing all the factors affecting business decisions, including profi tability and where to locate plants and other units. A good investment climate provides opportunities and incentives for fi rms to invest productively and create jobs, thus playing a key role in ensuring sustained growth and poverty reduction. Factors influencing investment climate include: Availability and ease of use of factor inputs such as land and labour; Availability of adequate physical and social infrastructure, such as power, telecom, urban infrastructure, water supply, hospitals, and educational institutions; Governance and regulatory framework in terms of rules and regulations governing entry, operation, and exit of fi rms, stability in regulation, integrity of public services, law and order and investment facilitation; and Provision of incentives and access to credit. Haryana ushered in the Green Revolution and the White Revolution, with its contribution to agriculture and milk production, respectively. The state is also strong in food grain production and horticulture. Dairy farming has a huge potential in the rural areas and is being promoted as a self-employment option. The state has consistently been leveraging its large agricultural base to establish a strong position in agri-business. As a result, food processing is fast becoming a thrust area for leading corporates. The economy recorded a compound annual growth rate of per cent between and , when it touched $22.37 billion. Exports added up to $5.5 billion in Haryana is one of the biggest trade and consumption centres in the country. It was the fi rst to introduce Value Added Tax (VAT), way back in Its most vibrant city, Gurgaon, is emerging as a major hub for the information technology (IT) industry. The state is strategically located close to the National Capital Territory of Delhi and about a third of its area falls within the National Capital Region (NCR). The Indira Gandhi International Airport is a 20-minute drive from Gurgaon. Haryana is a leading manufacturing hub, accounting for more than a 50 per cent share in the production of passenger cars, motorcycles and scooters, and more than a 25 per cent share in the production of tractors, bicycles and sanitary-ware in the country. The state is home to Maruti Udyog Ltd, India s largest passenger car manufacturer, and Hero Honda Ltd, the world s largest manufacturer of two-wheelers. Large multinational companies like Honda, Alcatel, GlaxoSmithKline, IBM, Tata Consultancy Services and Ericsson have invested in the state. Well-developed infrastructure facilities, a proactive administration, investor-friendly policies, skilled manpower and cordial labour relations provide a favourable investment climate for attracting domestic and foreign investment. Adequate industrial infrastructure exists in the form of industrial parks, industrial model townships, industrial clusters, industrial growth centres and most importantly special economic zones (SEZs). Haryana has the highest number of SEZs in the country eight notifi ed, 29 formally-approved and 28 SEZs that have got in-principle approvals. Reliance Industries $8.89 billion multi-product SEZ at Jhajjar is so far the country s biggest. Specialised industrial estates like the Export Promotion Industrial Park, Food Parks

5 HARYANA PAGE 5 and the Gems and Jewellery Park assist in improving operational effi ciency of specifi c sectors. The state s Industrial Policy 2005 aims at developing economic hubs and encouraging private partnership in the development of infrastructure. It focusses on economic activities where the state enjoys comparative advantage for instance food processing and IT and developing the services sector (tourism, transport, education, health care services and fi nancial services) to drive growth and to create an investor-focused approach in administrative processes. This will bring about effi ciency and transparency and strengthen the grievance redressal mechanism. The state s IT Policy, SEZ Act and e-governance initiatives are committed to position Haryana as a potential hub for investment and industrial opportunities. The state was the fi rst to set up its own Foreign Investment Promotion Board. Now called the Investment Promotion Centre, it plays an aggressive promotional role and provides technical support to appraise investment proposals from foreign as well as domestic companies. The state has a single window clearance mechanism in place to provide assistance to entrepreneurs and reduce procedural requirements. Composite application forms have been introduced to provide approvals and clearances required at the time of establishment and operation of a unit. The state has a fairly well developed education system that supplies skilled workers to industry. The banking and fi nancial services industry has a strong network across the state to facilitate savings and disperse credit. The state also ranks well on social indicators like literacy and health. Haryana is at the forefront of attracting investment in the country. Since its Industrial Policy was announced in 2005, the state has witnessed an investment fl ow of $5 billion. Projects involving investments of more than $11.7 billion are in the pipeline, which also include foreign direct investment of $300 million. According to estimates of the Centre for Monitoring Indian Economy (CMIE), outstanding investments in Haryana as of quarter ended March 2007, added up to $55.23 billion, of which almost 65 per cent is already under implementation. Maximum investments have come into the construction sector, followed by electricity, manufacturing and services. The rise in investments in construction activities has been triggered by the real estate sector, particularly housing complexes, and road construction. In the manufacturing space, food processing, textiles and automotive and auto components have attracted the maximum investments. Haryana - Select indicators Capital Land and Climate Geographical Area (sq km) Climate (Source: UNDP Human Development Report 2004) Industry Chandigarh 44,212 Average Rainfall in (in mm) Number of districts 19 Number of towns (as per Census) Number of inhabited villages 6,759 (as per 2001 Census) People Main religion Hinduism State Language Hindi Population (in million) (2001 Census) Share of urban population 28.9% State s share in India s 2.05% population Population density 338 (per sq km) Sex ratio 861 (females per 1000 males) Literacy rate 67.9% Birth rate 25.1 (per thousand persons) Death rate 6.6 (per thousand persons) Infant mortality rate (per 42 thousand live births) Summer season (April to June) Rainy season (July to September) Winter season (October to March) Key industries having business potential Agro-based industries, Textiles, Petrochemicals, Electronics & Communication, IT & ITES, Automobiles and automotive components, Real estate.

6 Economic Overview of the State With one of the highest per-capita incomes, Haryana is amongst the richest states in India. The state covers 1.37 per cent of the total geographical area, and accounts for less than two per cent of India s population. The state played a signifi cant role in ushering in the Green Revolution. It is self-suffi cient in food production and the second largest contributor to India s central pool of food grains. It is estimated that 86 per cent of the state s area is arable, out of which 96 per cent is under cultivation. About 75 per cent of the cultivated area is under irrigation. The White Revolution, a result of the increased emphasis on livestock farming, followed the Green Revolution in the 1970s. Today, the state has the second-highest per capita availability of milk per day. The economy of Haryana has recorded a compound annual growth rate (CAGR) of per cent between and The gross state domestic product (GSDP) touched $22.37 billion in All three sectors of the economy - primary (comprising agriculture and livestock, forestry and logging, fi shing, mining and quarrying), secondary (comprising manufacturing, construction and electricity, gas and water supply) and tertiary (comprising trade, hotels and restaurants, transport, storage and communication, fi nancial services, real estate and related services, public administration and other services) - have contributed to the growth, with the last two recording signifi - cant increase in contribution over the years. On the industrial front, Haryana has made remarkable strides. The state is a leading producer of automobiles and automotive components. It has more than 1,100 big and medium industrial units, prominent among them are Maruti Udyog, Hero Honda, Escorts, Sony, Whirlpool, Bharti Telecom, Perfetti Van Melle, Benetton, TDT Copper, Modi Alcatel and Carrier Aircon. Out of about 250 large and medium original equipment manufacturing units in the country, about 50 are located in Haryana. The state exported $5.5 billion worth of goods and services in It is among the most favourable destinations for investment (both domestic and international) in the northern region of the country. The structural composition of the state s economy has transformed over the years. The primary sector saw its share fall to 22.1 per cent in from 31.9 per cent in But 70 per cent of the state s population is engaged in agriculture. The share of the secondary sector in the GSDP increased from 30 per cent in to an estimated 34.7 per cent in This is attributable mainly to the contribution of manufacturing with increased industrial activity in sectors like automobile and auto components, light engineering, textiles, sanitary-ware, galvanised iron pipes, gas stoves, construction material and scientifi c instruments. Economic performance Haryana s GSDP (US$ billion) The tertiary sector accounted for the highest share in the GSDP at 43.2 per cent in , a signifi cant rise from 38.1 per cent in The growth was driven mainly by the IT and ITES industries, with Gurgaon emerging as the IT/ITES hub of the state People - Economic prosperity CAGR 12.73% Source: Economic Survey of Haryana, 2007 Percentage distribution of GSDP % 32.4% 44.3% % 38.1% 31.9% 3.70% 8.10% 11.80% Primary Sector Secondary Sector Tertiary Sector Haryana ranks third amongst Indian states in terms of per capita income, which was estimated at $862.9 in , signifi cantly higher than the all-india per capita income at $ The annual income of households is an important indicator of economic prosperity. A comparison of distribution of households by various income categories in Haryana vis-à-vis the all-india fi gures shows that the share of households in higher income categories in Haryana is more than the all-india fi gure. This holds true for urban as well as rural households, which supports the fact that the state also has the least gap between rural and urban prosperity in the country. For example, 30.1 per cent of Haryana s urban households and 10.5 per cent of rural households fi gure in the highest income category of $6,667 and above, as compared to only 22.7 per cent and 4.6 per cent, respectively, at the all-india level. Only

7 HARYANA PAGE 7 Distribution of Households by Income (%) <US$ 1667 US$ US$ >US$ Haryana 12.1 Urban India Source: The Market Skylilne of India 2006 by Indicus Analytics 3.8 per cent of Haryana s urban households fi gure in the lowest income category of less than $1,667, as compared to 12.1 per cent of all-india urban households. In the rural areas, 13 per cent of Haryana s households fi gure in the lowest income category, as compared to 46.8 for all-india rural households. Another indicator of the economic well being of the people is the ownership of physical assets like vehicles and consumer electronics. Assets like four-wheelers, two-wheelers and television sets are indicators of consumer aspirations. A comparison of asset ownership by households indicates a higher ownership of these assets in Haryana vis-à-vis the national level. Industrial performance in Haryana Haryana has shown robust industrial performance over the years. The state accounts for two-third of passenger cars, 50 per cent of tractors, 60 per cent of motor cycles, 50 per cent of refrigerators and 25 per cent of sanitary-ware manufactured in the country. Small-scale industry (SSI) units, which account for nearly 25 per cent of all production in the state, provide repair services for capital goods and are involved in the manufacture of metal products, leather and fur products, food items and wooden furniture. SSI units in Haryana account for 20 per cent of the country s total exports of scientifi c instruments, meet 60 per cent of the demand for ammunition boxes of the defence forces and 60 per cent of the woollen blanket needs of the Indian Army, and produces the largest number of electrical mixers and gas stoves in the country Contribution of small, medium and large industries Parameter Large & Medium Industries Source: Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) Industrial centres in Haryana Small scale units Working units (No.) 1,212 80,000 Production (US$ billion) CAGR of 5, production ( ) Fixed investment (US$ billion) Employment ( 000 number) 1,212 80,000 The main industrial centres in Haryana are Gurgaon, Panipat and Faridabad Gurgaon is strategically located on the Delhi-Jaipur national highway, in close proximity to the Indira Gandhi International Airport in New Delhi. Its connectivity and well-developed infrastructure has attracted many high-value projects involving foreign collaboration. There are more than 400 large- and mediumscale units and around 8,000 SSI units in Gurgaon. Investments have come in automotive, automobile parts, telecommunication equipment, electrical goods, software development, hardware, sports goods, rubber products, textiles, light engineering goods, pharmaceuticals, food items, consumer durables, footwear and chemicals. Panipat is known for its handloom industry and is the biggest centre in the country for producing shoddy yarn and low-priced blankets; it also exports cotton durries, made-ups, throws and mats. Samalkha, a smaller town near Panipat, is known for its foundry work and supply of agriculture machinery. Most of the units in the region are small-scale in nature. An Inland Container Depot (ICD) has been developed to promote exports. Indian Oil Corporation (IOC) also operates one of the most modern public sector refi neries in the city. Faridabad, which forms a part of the NCR, is well-connected by road and rail. There are about 15,000 industrial units in the district, with a combined turnover of $33.34 billion. The main industries in Faridabad are light engineering goods, metal goods and automotive components. Many well-known companies like Whirlpool, Goodyear, Larsen & Toubro, Asea Brown Boveri,

8 Breakup of Invesments by sector Investments in Haryana 17.2% 11.3% 8.2% 0.2% 63.1% Haryana is one of the preferred investment destinations in the country. According to estimates by the CMIE, outstanding investments in Haryana as of quarter ended March 2007 were to the tune of $55.23 billion, of which almost 65 per cent is already under implementation. The maximum investments have come into the construction sector, followed by electricity, manufacturing and services. The rise in investments in construction activities has been triggered by large-scale real estate development, particularly housing complexes. Construction Electricity Manufacturing Services Irrigation Source: Monthly Review of States of India, CMIE March Report 2007 GKN Invel, Woodward Governor, Castrol, Escorts, Eicher Motors, Cutler Hammer, Hyderabad Asbestos and Nuchem are operating here. Investments in road construction include about 21 projects, which are under implementation. Of these, the Kundli-Maneshwar-Palwal expressway project, costing more than $475 million, is the most signifi cant. Another major project is the construction of the Panipat Elevated Highway at a cost of $77 million. Two major electricity generation projects under implementation are the Jhajjar Power Project (capacity 1,500 MW, cost $1.6 billion) and the Panipat Stage V Thermal Power Project (capacity 500 MW, cost $425 million). Other important cities in Haryana are Karnal and Ambala. Karnal is the centre for agro-based and handloom industries. Ambala is known for its scientifi c and surgical instruments and hosiery industry. The economic hub around Kundli-Manesar-Palwal and Panchkula is being developed as an IT corridor in the state. The top 10 districts constitute 76% of production Haryana reported 620 outstanding projects as of quarter ended March 2007, of which 166 were in the implementation stage and the remaining under announcement or proposal stage. Two major projects with an investment of over $238 million include the Yamuna Nagar Township project (under the aegis of Tulip Infrastructure) and the Chainsa-Gurgaon-Jhajjar-Hisar District Share in production (per cent) Industries Faridabad 30.0 Tractors, motorcycles, switch gears, refrigerators, footwear, tyres, consumer durables Gurgaon 27.0 IT/ITES, automobiles, automobile parts, hardware, sports goods, rubber products, readymade garments, telecommunication equipments, food items, air conditioners, electrical goods, light engineering goods, pharmaceuticals, footwear, Chemicals Ambala 5.1 Hosiery, scientific and surgical instruments, metal casting, kitchen mixer grinders, submersible motor pumps, textiles Sirsa 4.0 Seed processing, wrapping papers, milk chilling, rice shelling, chemicals, iron and steel fabrication, agriculture implements, leather goods, hard and straw board Panipat 3.9 Cotton yarn, staple yarn, terry towels, soft drinks, hatcheries, handloom goods, foundry products, urea, petrochemicals, power, handloom, power loom, dyeing/ processing, agro based industries, foundries, textile machinery, nuts and bolts Karnal 2.4 Textiles, agro-based industries, leather products, floriculture, electronic motors, wooden and steel furniture Yamuna Nagar 1.5 Metal industry, sugar, wood based industries, cement, steel, stone crushing Bhiwani 1.0 Textiles Hisar 0.9 Stainless steel, automobile repair, textiles, handlooms, pipes, food processing, cotton ginning and oil, engineering components, leather goods Jind 0.3 Agro based industries, sugar mills, live-stock based industries, woollen blankets, foundry Others* 23.9 Total 100 *Others include Kurukshetra, Sonipat, Fatehabad, Rohtak, Kaithal, Narnaul, Bahadurgarh, Rewari, Panchkula and Mewat Source: Department of Industries, Government of Haryana

9 HARYANA PAGE 9 Gas Pipeline project (under Gas Authority of India Ltd). A mega SEZ is being established by Reliance Industries in a joint venture with the Haryana State Industrial Development Corporation (HSIDC). This project will come up on 25,000 hectares of land in the Gurgaon and Jhajjar districts, and envisages an investment of $8.89 billion. Major units undergoing expansion/ diversifi cation in the state include Asahi India Safety Glass Ltd, Alcatel Network Systems Ltd, Perfetti Van Melle and Duracel (India) Ltd. Haryana s contribution to exports Exports from the state having been growing at a CAGR of 20 per cent over the past few years and crossed $5.5 billion in Exports mainly comprise software services, basmati rice, readymade garments, handloom products, automobiles and auto components, scientifi c instruments and sanitary-ware. Software exports from the state increased from $190 million in to $2.23 billion in The state government has set up an Export Promotion Board under the chairmanship of the chief secretary to promote exports. In addition, there is an Export Promotion Cell at the Directorate of Industries that provides basic knowledge of procedures for exports and compiles information on trade enquiries and disseminates it to various associations and prospective exporters. Haryana has a container freight station at Babarpur in Panipat and an Inland Container Depot at Badarpur. A Satellite Freight City is proposed to be set up by the Airports Authority of India in Haryana. Labour Force Haryana provides cost-effective and adequate labour force (both skilled and unskilled). As per the 2001 census, it had a million-strong agricultural workforce. About two-third of the state s population still depends on agriculture for its livelihood. Almost 60 per cent of the workforce in the organised sector is employed in public sector organisations and the remaining in the private sector. Over the years, the state has witnessed migration of workers from the public to the private sector. The state department has fi xed minimum wages for industrial workers, which are amongst the highest in the country. The minimum wage of unskilled workers has been fi xed at $52.2 per month and about $2 a day. The labour department has set standards and norms for ensuring safety in working premises. Labour and industrial relations in Haryana are cordial as compared to other states with lesser occurrence of strikes and labour disputes.

10 Infrastructure in Haryana Industrial infrastructure The Haryana Industrial Policy 2005 lays strong emphasis on creating a sound investment climate. The industrial infrastructure in Haryana is being developed through state agencies like HSIIDC and Haryana Urban Development Authority (HUDA), as well as private players. The state government has laid down certain provisions for land allotment: There is a 10 per cent reservation of plots and sheds for allotment to non-resident Indians and for units with 33 per cent or more FDI in total investment. The allotment of plots and sheds is made on an ongoing basis by a committee consisting of director of industries, managing director, HSIIDC, and managing director, Haryana Financial Corporation. The allotment of plots to projects with an investment of more than $6.67 million is made on an ongoing basis by a committee headed by the principal secretary. Industrial parks Specialised industrial estates are being developed to cater to the requirements of specifi c industries. These industrial parks help in improving operational effi ciency, as various units belonging to a specifi ed sector are located at one place. Export Promotion Industrial Park (EPIP): The Haryana Government has set up EPIP on a 107-acre area along the Haryana-Delhi border for export-oriented units in sectors like food processing, leather garments and accessories, electronics, telecommunications, automotives, auto parts, sports goods, handloom and ready-made garments. Food Parks: These have been set up at Saha in Ambala, Rai in Sonipat, Narwana and Dabwali, to provide facilities for the food processing and food packaging industry. Gems and Jewellery Park: This has been established at Udyog Vihar in Gurgaon. Amongst the new sector-specifi c parks planned for the future are the National Institute for Food Technology Entrepreneurship and Management at Kundli in Sonipat district, a footwear park and a leather garments park at Karnal and Bahadurgarh, respectively, an apparel park each at the SEZs in Gurgaon and Barhi (Sonipat district) under the Apparel Parks for Exports scheme of the Government of India, and a biotechnology park at Manesar. Industrial Model Townships (IMTs) IMT Manesar is being developed as a prominent cluster of automobiles and auto components units. It has industrial, residential, commercial and recreational facilities that have been developed at par with international standards. Maruti Udyog is undertaking a massive expansion programme at Manesar creating fresh investment of $1.78 billion to double the capacity of passenger cars and also for starting a diesel engine project. The success of IMT Manesar has prompted the government to set up four more IMTs at Kharkhoda, Rohtak, Faridabad and Yamunanagar. Industrial clusters The government is in the process of upgrading fi ve industrial clusters in the state. These include the scientifi c instruments cluster at Ambala, the metal industry cluster at Jagadhri, agricultural implements and rice milling clusters at Karnal, the pharmaceutical cluster at Sonipat and the chemicals cluster at Bahadurgarh. The state government plans to develop a few more industrial clusters at Panipat, Gurgaon and Faridabad for textiles, auto parts and light engineering equipment, respectively. Rural industrial clusters are being set up at Ismailabad in Kurukshetra district (for jute manufacturing), Farukhnagar in Gurgaon district (for jute and cane furniture manufacturing), Odhi in Rewari district (for leather footwear manufacturing), and Tallot in Mahendragarh district (for embroidery frame manufacturing). Warehouse Complex/ Inland Container Depots The state has three Inland Container Depots (ICDs) located at Faridabad, Panipat and Rewari. Haryana Warehousing Corporation (HWC) is setting up an ICD at Palwal and a specialised state-of-the-art warehousing complex at Rai in Sonipat district. HSIIDC is developing an ICD in public-private partnership at the Industrial Growth Centre in Bawal. The Container Corporation of India (Concor) is setting up a cold chain complex at Rai (Sonipat) to provide logistic support to the Food Park located there. Logistics service provider, Indo Arya Logistics, has announced the launch of a regional distribution centre at Hassangarh, which would be one of the largest of its kind in the country. The warehouse has the potential to become a support provider for retail and FMCG sectors in north India. Industrial Growth Centres HSIIDC has developed an Industrial Growth Centre at Bawal spread over a 1,200-acre area. Companies like YKK, TDT Copper, Exide, Becton Dickinson, Nerolac, Svedla and Asahi Glass are already present at the centre. Encouraged by the rapid growth in the number of industries, an additional 1,000 acres of land has

11 HARYANA PAGE 11 been acquired. An industrial growth centre at Saha, near Ambala, is also being setup by HSIIDC. Special Economic Zones (SEZs) Haryana has eight notifi ed SEZs, 29 formally approved SEZs and 28 SEZs with in-principle approval amongst the highest number of SEZs in the country. Reliance Industries 10,000-hectare multi-product SEZ at Jhajjar is so far the country s biggest SEZ, involving an investment of $8.89 billion. This is followed by real estate giant DLF s proposed multi-product SEZ at Gurgaon, with an investment of $5.78 billion. DLF has also been given the approval to set up a multi-product SEZ at Ambala with an investment of $430 million. SEZs notified under SEZ Act 2005 as on 29th August 2007 Name of the Developer Source: Location Type Uppal Developers Gurgaon Multiservice DLF Limited Gurgaon IT/ITES DLF Cyber City Developers Ltd. Gurgaon IT/ITES Educational and Training Infrastructure Area (in Hectare) Orient Craft Gurgaon Textiles Infrastructure Ltd. Dr. Fresh Health Pvt. Gurgaon IT/ITES Ltd. Selecto Systems Pvt. Faridabad IT/ITES 3.34 Ltd. Luxor Cyber City Gurgaon IT/ITES Pvt. Ltd. Parsvnath Limited Gurgaon IT/ITES 42.7 Realising the importance of a skilled and educated workforce, Haryana has created a well-developed network of educational institutions. The primary education set-up is strong with a primary school within 1.08-kilometre radius of each village. Every year, more than 30,000 students pass out from technical and non-technical institutions in the state. The annual plan budget allocation for on education was increased to $11.12 million from $6.22 million in the previous year. The state has recently taken up several initiatives to improve the education infrastructure. Some of these are: It has set up a State University (Bhagat Phool Singh Mahila Vishwavidyala) at Sonipat exclusively for women s education; It is setting up the Rajiv Gandhi Education City at Kundli in Sonipat, also known as the Knowledge City; The state government has built an EDUSAT network for satellite education and transferred it to the Utkarsh EDUSAT Society, which handles repair and maintenance of equipment, coordination for content development and research. It offers fi ve channels for primary education, senior secondary arts, senior secondary science, higher secondary education and technical education. Educational institutes have been given satellite interactive terminals facilitated by softwarecontrolled multicast through internet protocol, which enable students to ask questions live. Videos of theory and practical classes are made available so that students can view them later for better understanding of the subject; An Institute of Design is being set up at Rohtak in collaboration with the National Institute of Fashion Technology (NIFT); The National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) is being set up by the Ministry of Food Processing, Government of India; The Directorate of Secondary Education in the state has entered into an agreement with an e-learning enabler, Educomp Solutions, to introduce computer education in senior secondary schools. The $4 million project will be implemented over three years and will aim to provide IT education in over 800 Government High Schools. Medical & Health Care Facilities The State Health Department provides quality and affordable health care facilities to its people through its network of health care centres and facilities. The state has about 90 hospitals and dispensaries, 85 community health centres, 400 primary health centres, 2,400 sub-centres and 15 tuberculosis centres. The per capita expenditure on health in the state increased from $4.11 in to $5.41 in Comparison of Health Indicators Haryana All-India Birth rate Death rate Infant mortality rate Life expectancy at birth (years) Male Female Source: Economic Survey of Haryana Gurgaon is on course to have 18 new hospitals equipped with about 5,000 beds by 2010, at a cost of almost $670 million. Investments are being made by leading healthcare fi rms like Fortis

12 Healthcare, Apollo Hospitals, Artemis, Max Hospitals, Healers Hospital, Rockland and Paras Hospitals, and by surgeon-turnedentrepreneur Naresh Trehan. Infrastructure for savings and borrowings Industrial growth in Haryana has been supported by a strong and well-developed fi nancial network. Financial assistance is provided through commercial banks, cooperative banks and other lending institutions. Credit-deposit ratio is a signifi cant indicator of credit fl ow for accelerating economic development in any state. The credit-deposit ratio in Haryana increased to 65 per cent as of September 2006 as compared to 53 per cent during the corresponding period in The Haryana State Cooperative Agricultural and Rural Development Bank is the prime lender for agriculture-related activities. Haryana Finance Financial Institutions in Haryana Co-operative Societies 18,424 Primary Agricultural Credit Societies 2,433 Post Office Saving Banks 2 650, Indian Commercial Banks 1,726 Co-operative Banks 373 Source: Reserve Bank of India Corporation and Haryana State Co-operative Apex Bank Ltd are the other agencies providing fi nance facilities. Physical Infrastructure Transport The state government is developing a well-planned and effi cient network of transport facilities in Haryana. Roads Haryana has a well-developed network of passenger roads, with the remotest parts of the state linked with metalled roads. Haryana Roadways, with its fl eet of nearly 3,400 buses, is one of the biggest state road transport undertakings in the country. The state is well connected to neighbouring states through a network of national highways. The four-lane national highway 1 passes through Haryana from Delhi to Ambala, linking Punjab, Himachal Pradesh and Jammu & Kashmir. NH-2 (Delhi-Mathura Road) passes through Faridabad and links vast areas in the state to Uttar Pradesh, Madhya Pradesh, right up to Mumbai. NH-8 (Delhi-Jaipur) passes through Gurgaon, IMT Manesar and Growth Centre Bawal, right up to Ahmedabad and Mumbai. NH- 10 passes through Haryana from Delhi to Dabwali. Railways Haryana is well connected through the rail network of the Indian Railways. The main railway routes passing through the state are Amritsar-Delhi, Rewari-Ahmedabad, Bhiwani-Rohtak-Delhi, Ambala-Ferozepur, Delhi-Ferozepur, Kalka-Jodhpur, Kalka-Howrah, Amritsar-Howrah and Delhi-Shimla. As on 31st December 2006, the state had a 1,595-kilometre long rail network. The Delhi Metro is being extended to Gurgaon district and a rail link from Rohtak to Rewari is being undertaken. There is a proposal to provide a rail corridor linking the major satellite towns of Faridabad, Gurgaon, Bahadurgarh and Kundli with New Delhi. Civil Aviation The state has a domestic airport at Chandigarh (Haryana s shared capital with the state of Punjab). The Indira Gandhi International Airport is located in close proximity (a 20-minute drive from Gurgaon), which is a major reason for the rapid emergence of Haryana as an IT and ITES destination in India. There are civil aerodromes at Pinjore, Karnal, Hisar, Bhiwani and Narnaul. Power Haryana became the fi rst state in the country to achieve 100 per cent rural electrifi cation way back in The installed generation capacity in the state as on 31st March 2006 was 4,033 MW, most of it being thermal power. The major consumer of electricity is the domestic sector accounting for 78 per cent of power consumption. The per capita consumption of electricity is 660 kwh, much higher than the all-india average of kwh. An estimate by Haryana Power Generation Corporation Ltd (HPGCL) reveals that there exists a gap in demand and supply, with demand exceeding supply by 4,864 MW. To increase the availability of power, the state government is encouraging massive investments from the private sector for capacity generation, improvement in operational effi ciency and extension of distribution network. Some key upcoming ultra mega power projects proposed in the state are tabulated below: Upcoming Power Projects in Haryana HPGCL has signed agreements for various independent power projects (IPPs). Jindal Power and Weizen Pvt Ltd will set up gasbased plants having 1,000 MW and 600 MW capacities, respectively. The state also has a long-term power purchase agreement

13 HARYANA PAGE 13 Plant Agency Type Thermal power station for Delhi / Jhajjar with North Eastern Electric Power Corporation. Special efforts have been made to increase the plant load factor for existing power stations through better maintenance practices, renovation and modernisation. Telecom & IT According to estimates of the Telecom Regulatory Authority of India (TRAI), Haryana had a strong cellular subscriber base of 3.88 million as on June All the major telecom players like Airtel, Hutch, BSNL, Reliance and Idea have a presence in the state. Haryana has 1,026 telephone exchanges, 2,329 post offi ces in rural areas and 317 in urban areas. The state government is setting up a Hi-Tech Habitat Centre with state-of-the art facilities for IT and BPO companies in the Electronics City at Gurgaon. The Nano City and IT Park projects are under implementation in Panchkula. The state is making rapid strides in its e-governance initiative to provide citizen-centric services. It has committed $22.5 million to set up a State Wide Area Network (SWAN). e-governance in Haryana Capacity (in mega watt) Likely year of operation NTPC COAL Yamuna HPGCL Coal Nagar Hisar Thermal Power Station HPGCL Coal Source: Eleventh Annual Plan, , Infraline Haryana has made remarkable achievements in providing citizencentric services through several e-governance projects that provide a single point of interaction between the citizen and government departments. e-disha: This is an initiative for setting up district level centres to provide timely and effective information to citizens regarding various transactions entered into with the government departments at district and lower levels at a single window point. e-disha centres have been set up in 18 districts. Each centre provides services within specifi ed time lines. The services currently being provided include provision of driving licence, vehicle registration, issuance of certifi cates, passport application, arms licences and services related to house tax. e-food.net: This is a web-based decision support system which has made the procurement and storage of food grains in the state fl exible. Data is captured from mandis (markets) during procurement by various agencies into a web-enabled software. Under this system, stock information is captured by godowns location-wise under various categories of stock. The statistical and GIS reports generated from the system help in taking prudent decisions related to movement and despatch of food grains. The system drastically reduces the manpower engaged and time taken in preparing various reports and movement plans. Key Nodal Agencies Investment Promotion Centre and District Industries Centre for single window clearance The state was the fi rst to set up its own Foreign Investment Promotion Board under the chairmanship of the chief minister in Now called the Investment Promotion Centre, it plays an aggressive promotional role and gives technical support to appraise investment proposals from foreign as well as domestic companies. It is empowered to take decisions regarding allotment of land, sanction of term loan, etc. and acts as a single point contact agency. It has a complete database on availability of land, water, power and fi nance as well as rules and regulations pertaining to all the institutions engaged in industrial development. It recommends a customised package of incentives and concessions for projects involving investment of $6.63 million and above. The state government has enacted the Haryana Industrial Promotion Act 2005 to make it mandatory on the part of various departments and authorities to provide approval and clearances in a fi xed-time frame. In July 2007, the state government notifi ed the Haryana Industrial Promotion Rules 2007 to implement the provisions of the Act. The Act provides for a single window clearance mechanism to provide assistance to entrepreneurs and reduce procedural requirements. It follows a three-tier structure as elaborated below: High Powered Clearance Committee: This committee is headed by the principal secretary to the chief minister and receives composite application forms for grant of clearances for setting up of industrial units with a proposed investment of $7.14 million and above. Its members include several principal secretaries including those from Excise and Taxation, Power, Town and Country Planning, Industries and Labour and Environment ministries. Its member secretary is the director, Industries and Commerce.

14 State Level Clearance Committee: It deals with investment proposals between $1.19 and $7.14 million. This committee is chaired by the Principal Secretary, Industries, with its members and member secretary from the High Powered Clearance Committee. District Level Clearance Committee: This committee handles investment proposals below $1.19 million. Its chairman is the deputy commissioner, with members including executive engineer, Uttar Haryana Bijli Vitran Nigam or Dakshin Haryana Bijli Vitran Nigam, deputy excise and taxation commissioner, district town planner, district level offi cer of Haryana State Pollution Control Board and assistant director, Industrial Safety, and general manager, District Industries Centre as the member secretary. The Investment Promotion Centres at New Delhi and Chandigarh and the District Industries Centre act as nodal agencies to provide support to these committees. Composite application forms have been introduced to provide approvals and clearances required at the time of establishment and operation of the unit. The details of these forms are as follows: Form 1 (for establishment) No objection certifi cate from the Haryana State Pollution Control Board; Change of land use certifi cate from the Town and Country Planning Department; Approval of factory/ building plan under the Factories Act; Approval of building plan from Town and Country Planning Department; Application and agreement for release of electric connection from Dakshin Haryana Bijli Vitran Nigam or Uttar Haryana Bijli Vitran Nigam Form 2 (for operation) Consent from the Haryana State Pollution Control Board under Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981; Licence from Chief Inspector of Factories under the Factories Act, Every applicant seeking clearance is required to apply to the nodal agency in the relevant parts of Form-1 or Form-2 of the composite application form. The composite application forms are received from entrepreneurs at least 15 days prior to the scheduled meeting for consideration by the respective committees. The authorities issue necessary clearances within three days of the receipt of orders of the committee. The respective committees are the fi nal authority in granting clearances and the decision is binding on all concerned authorities Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC) HSIIDC was set up in 1967 for promoting medium- and largescale industries in the state. It provides fi nancial assistance by way of term loans, equipment re-fi nance, equipment leasing and working capital. It also provides services like infrastructure development. Haryana Agro Industries Corporation Ltd (HAIC) HAIC is engaged in providing seeds, fertilisers, pesticides, tractors and other agricultural machinery at economical prices to the farming community. It has set up an R&D centre for the agro sector. HAIC is also the designated agency for procuring wheat and paddy in the state and is responsible for the promotion of food processing and agro-based industries. Haryana State Small Industries & Export Corporation Ltd (HSSI & EC) HSSI & EC performs multifarious activities for the promotion of SSIs and rural industrial units. The agency is recognised as an Export House and promotes exports from SSI units. It also assists SSI units by making raw material available and providing market assistance. Haryana State Electronics Development Corporation Ltd (HARTRON) HARTRON is the nodal agency of the Haryana Government for promoting the electronics and IT industries. It offers expertise in infrastructure development. Haryana Urban Development Authority (HUDA) HUDA is responsible for promoting and securing development of urban areas and has the powers to acquire, develop and sell property for residential, industrial and commercial purposes as well as to make developed land available to the Haryana Housing Board to undertake building work.

15 HARYANA PAGE 15 Haryana Finance Corporation (HFC) HFC meets the credit needs of small- and medium-scale industrial units by advancing term loans. The loans are advanced for acquiring fi xed assets such as land, building, plant and machinery. Haryana Renewable Energy Development Agency (HAREDA) HAREDA is the nodal agency for coordinating all activities relating to renewable energy development, including generation of power using non-conventional energy sources. It is also responsible for laying down the procedure for inviting proposals from independent power producers, detailed project report preparation, evaluation of project proposals, project approvals and project progress monitoring. Policy Framework Industrial Policy 2005 Haryana s Industrial Policy 2005 aims to achieve the creation of an effi cient and investor friendly environment. Its focus is on the following: Developing economic hubs and encouraging private partnership in the development of infrastructure; Focussing on economic activities where the state enjoys comparative advantage (for example, food processing and IT); Developing the services sector (tourism, transport, education, health care services and fi nancial services) to drive growth; Creating an investor-focused approach in administrative processes, bringing about effi ciency and transparency and strengthening the grievance redressal mechanism; Providing subsidy to electronics units, agro and food processing units and prestigious projects as well as to units being set up in backward areas; Exempting all new industrial units - except those in the negative list - from payment of electricity duty for a period of fi ve years. Information Technology Policy 2000 The IT Policy 2000 is an initiative to encourage replacement of the traditional delivery system of public services with IT-driven systems of governance through private initiatives in providing critical infrastructure, systems framework and an enabling environment. For this purpose, the following steps have been taken: Constitution of a state-level steering committee - IT Prism - responsible for setting the priorities for sectors to be taken up for computerisation, reviewing the progress of implementation of the IT action plan of various departments and approving their budgets and sanctioning posts for IT-related activities; Setting up of a separate Secretariat for Information Technology to monitor the implementation of IT initiatives and take necessary steps to remove hurdles; Setting up a Facilitation Committee of government offi cials and representatives from the IT industry under the chairmanship of principal secretary to the chief minister, to coordinate and facilitate private investments; Establishment of an IT initiative fund with an initial corpus of $2.1 million for e-governance, for developing replicable and reusable models of e-governance and applicable enabling technologies; Introduction of smart card-based citizen ID cards with multifunctions that enable citizens to interact with government departments for services including online payments, obtaining ration cards, passports, driving licences and vehicle registration; it also acts as a voter ID; Preferential treatment for allotment of land to IT units in all industrial areas developed by state agencies, along with continuous and uninterrupted power supply with exemption from scheduled power cuts; Total exemption from payment of electricity duty for captive power generation sets installed by the IT industry; Escort services and single desk clearance for obtaining easy clearances and approval by various government departments for IT companies, with online clearance and support network linking all related departments. The Secretariat for IT coordinates approvals and facilitation. The state s Labour Policy has declared the IT industry as a public utility service, which prevents the occurrence of strikes as well as lockouts without due notice. The industry has also been exempted from operations of provisions regarding opening and closing hours. The Haryana SEZ Act 2005 The Haryana SEZ Act 2005 aims to promote industrial townships with world-class infrastructure and creating a conducive climate for export promotion. The developer, after identifying the area for an SEZ, has to submit an application to director, Industries & Commerce Department, along with a pre-feasibility report. The Project Evaluation Committee, constituted under the chairmanship of Haryana Industries and Commerce Department, evaluates the proposal and after scrutiny forwards it to the Project Approval Committee, for a fi nal decision. The private sector is allowed to purchase land directly from the

16 landowner for single product SEZs, IT/ ITES, biotechnology and warehousing SEZs where land area requirement is not high. The state government assists developers in ensuring contiguity of land for SEZs. Outside the NCR, the state government assists in acquisition of land in cases where the minimum requirement is 250 acres. In case of joint ventures where HSIIDC or the government has 26 per cent or more share in equity, the state acquires the entire land for the project. Proposals for land acquisition are received by HIPB. The developer is bound to rehabilitate the affected villagers by ensuring built-up houses, residential plots, street lights, drainage and sewage, drinking water, medical care facilities, schools and community centres. Besides, the developer has to offer at least 25 per cent of the employment to the Haryana domicile, give employment to at least one member of the family whose land is acquired for setting up the project, pay external development charges, provide right of way and develop infrastructure like roads and bridges. The Act allows for exemption from payment of any tax, duty, fees, cess or any other levies for any goods exported or imported into the SEZ, inter-unit transaction of goods within the zone, goods sent for value addition outside the SEZ to the domestic tariff area and returned back, and services that provide value addition to the project within the SEZ. All transactions and transfers of immovable property within the SEZ are exempted from stamp duty. Key industries and players in Haryana Haryana has 80,000 SSI units and 1,290 medium- and large-scale industrial units, with the key ones being agro-based and food processing, IT and ITES, textiles, automobiles and auto components, pharmaceuticals and biotech, real estate and construction, retail and location-based entertainment. Agro-based industries Agro-based industries are one of the largest employment generators in rural Haryana and have a strong potential in terms of value addition and exports. The total food grain production in Haryana increased from 13,295 tonnes in to 14,443 tonnes in Besides, the state produces 212,000 tonnes of fruits and 2.09 million tonnes of vegetables. The state is also promoting organic farming aggressively, providing fi nancial assistance of $12 per hectare to farmers for production and use of vermi-compost. It is also encouraging the use of green house production technology to promote disease-free nursery and production of off-season fruits and vegetables. There is a huge potential for raising horticulture production and exports to the USA, Europe and Japan. Dairy farming also has a huge potential in rural areas and is being promoted as a self-employment option. Value addition from the sector is more than $2 billion per annum. Haryana has about 750 food processing and agro-based units in the large and medium sectors. Food processed and agrobased products worth $340 million including $44.5 million worth of pickles are exported annually Some of the major players in the agriculture and food processing industry in Haryana are Yakult Danone, GlaxoSmithKline Consumer Healthcare and Perfetti Van Melle India. Yakult Danone India Pvt Ltd Yakult Danone India Pvt Ltd, a joint venture between Japan s Yakult Honsha and Group Danone of France, is setting up a manufacturing facility in Haryana to produce fermented milk. The company has been allotted eight acres of land in the HSIIDC Food Park. It will have an installed capacity of a million bottles per day, which will be achieved in four phases. GlaxoSmithKline Consumer Healthcare Ltd (GSKCH) GSKCH is a group company of GlaxoSmithKline UK, and one of the largest players in the health food drinks industry in the country. Its fl agship product Horlicks is a widely recognised brand. The company s factory at village Khera, Sonipat, on a 140- acre plot, has been set up at a cost of $55 million with a capacity to produce 261,000 tonnes of Horlicks per annum. Perfetti Van Melle India Perfetti Van Melle India, a 100 per cent subsidiary of global conglomerate Perfetti Van Melle, started its operations in India in 1992 by setting up a factory at Manesar. It launched its fi rst brand Center Fresh in the Indian market in Today, it leads the Indian sugar confectionery market with an over 25 per cent share of the market. It also has under its ambit the development of South Asian markets and exports to other Asian countries. In the last 12 years, the company s portfolio has grown from a single brand to 15. Textile industry Abundant availability of raw material gives Haryana a competitive advantage in the textile sector. Cotton production in was 1.81 million bales. The state s contribution to the national