INDIAN STATES Economy and Business Maharashtra

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1 INDIAN STATES Economy and Business Maharashtra

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3 MAHARASHTRA PAGE 3 CONTENTS Maharashtra - A Snapshot 4 Socio-Economic Profi le 5 INFRASTRUCTURE Physical infrastructure 7 Airports 7 Telecommunications Infrastructure 9 Key Industrial Clusters 9 POLICIES & INCENTIVES Industrial Policy 10 Infrastructure Policy 11 Incentives 12 BUSINESS OPPORTUNITIES Key Thrust Sectors 13 Textile Parks 13 Auto & Auto Components 14 Media & Entertainment 15 Key Players 15 DOING BUSINESS Approval process 19 Regulatory Issues 20 A report by Ernst & Young for IBEF

4 MAHARASHTRA AN INTRODUCTION Located in the western region of India, Maharashtra is the third largest state in the country, stretching over 307,690 sq km and with a total population of 96.9 million (Census 2001). The state shares borders with Gujarat, Madhya Pradesh, Andhra Pradesh, Karnataka and Goa. The state is endowed with diverse physiographic features. The Western Ghats are a hilly range running parallel to the coast, at an average elevation of 1,200 m (4,000 ft). To the west of these hills lie the Konkan coastal plains, km in width. To the east of the Ghats lies the fl at Deccan Plateau. The Western Ghats form one of the three watersheds of India, from which many south Indian rivers originate. The Godavari and Krishna, which fl ow eastward into the Bay of Bengal, forming one of the largest river basins in India, are notable among them. Though a benefi ciary of the South-West Monsoon, which lasts from June to September, the rainfall in Maharashtra varies from a high of 2,000 mm in the Western Ghats to 600 mm in the plains. Maharashtra is the largest among Indian states in terms of the size of economy and the third largest in terms of area. Advantage Maharashtra Largest economy in the country, with a high per capita income of $621. Most attractive investment destination in the country, accounting for 40 per cent of exports. Most industrialised state, with strong presence in petrochemicals, automobiles, pharmaceuticals, fi nancial services, media and entertainment, IT/ ITES and textile industries. Large network of professional education institutions; presence of reputed R&D centres and superior infrastructure. Due to its strategic geographic location, Maharashtra is an established state for trade and commerce. Industrial growth of the state has been robust. This has been further reinforced by availability of skilled manpower, enabling infrastructure and a favourable policy and institutional framework provided by the state government.

5 MAHARASHTRA PAGE 5 SOCIO-ECONOMIC PROFILE Economic Profile Population (Census 2001) 96.9 million Density (2001) 314 person per sq km Sex Ratio (Census 2001) 922 females per 1000 males Principal Languages Marathi & Hindi Literacy Rate (Census 2001) 77% Major Minerals Coal, Manganese, Iron Major Industries Financial Services, Textiles, Auto-ancillaries, Chemical and allied products, Electrical and non-electrical machinery, Petroleum and allied products. Wine, Jewellery, Pharmaceuticals, Engineering goods, Media & Entertainment etc. Major Crops Groundnut,Cotton, Sugarcane NSDP at current prices in US$ 34.3 billion Annual Per Capita Income at current US$ 621 prices in Domestic Airports 10, the main airports are Mumbai, Pune, Nagpur and Nashik Maharashtra's Gross State Domestic Product (GSDP) in 2004 was estimated at $106 billion at current prices. It had a Net State Domestic Product (NSDP) of $35.29 billion in % FDI inflows received by top five destinations in india NSDP Growth US$ billion Source: Economic Survey of Maharashtra is abundant - coal, manganese, iron ore and tin being some of the important minerals. The mineral belt stretches across Chandrapur, Gadchiroli, Bhandara and Nagpur districts. Per Capita Income Maharashtra s rapid economic growth is further reinforced by the increase in the per capita income at constant prices. Per Capita Income in was $ Sectoral Contribution to GSDP Dehli, Part of UP and Haryana Maharashtra, Dadra & Nagar Haveli, Daman & Diu Karnataka Tamil Nadu & Pondicherry Gujarat Source: Region-wise inflows furnished by RBI, Mumbai. (From January 2000 to November 2005) Between and , Maharashtra's real NSDP increased from $22.6 billion to $34.3 billion, registering a growth rate of 4.7 per cent. The state s economy grew at a rate of 13.8 per cent in Maharashtra s economy and infrastructure has fl ourished considerably since the 1970s. The state government has contributed immensely by supporting and facilitating the development and growth of the economy and infrastructure. The rural economy is not diversifi ed, though the mineral base According to the provisional estimates of the Maharashtra State Economic Survey, from 2002 to 2007, the secondary sector (construction, manufacturing) grew at a CAGR of 9.6 per cent, while the tertiary sector (trade, hotels and restaurants, communication, banking and insurance) grew at a CAGR of 8.7 per cent. The agriculture sector/ primary sector grew at a CAGR of 4.3 % during the (Tenth Five Year Plan). The broad sectoral composition of the state income in indicates that the share of the primary (agriculture), secondary (industry) and tertiary (services) sectors was 15.8 per cent, 24.8 per cent and 59.3 per cent, respectively. The sectoral composition of state income has undergone considerable changes during the period between and During this period, the share of the primary sector declined from 34.4 per cent to 15.8 per cent and the share of the secondary sector remained almost the same at about 25 per cent. However, the share of the tertiary sector increased from 39.9 per cent to 59.3 per cent. Maharashtra is now less of an

6 agrarian state its economy is increasingly being dominated by the services sector. State Demographics Maharashtra has a population of 96.9 million, making it the second most populous state in India. Its density is inhabitants per sq km. Males constitute 50.3 million of the population and females 46.4 million. Maharashtra is the second most urbanised state in the country, with 42 per cent of the people living in urban areas. The state has a large migrant population. The state s sex ratio is 922 females to 1,000 males. It has a literacy rate of per cent; it is higher for males at 86.2 per cent, and for females it is 67.5 per cent. The literacy rate increased from 65 per cent in 1991 to 77 per cent in The state has the second highest literacy rate in the country. Marathi, the offi cial state language, is spoken by a vast majority of people. In Mumbai, however, due to its cosmopolitan nature, Hindi, Gujarati and English, along with a variety of other languages are also spoken.

7 MAHARASHTRA PAGE 7 INFRASTRUCTURE Physical Infrastructure Railways Roads Maharashtra has the one of best road networks in India. The Maharashtra State Road Transport Corporation and private operators provide good connectivity across the state. The total length of roads is 229,302 km, with 4,176 km of national highways and 33,705 km of state highways. There are two major intra-state highways: the Mumbai - Pune Expressway and another, which is under construction. The former provides an important link between the two key economic centres of the state. Mumbai is the hub of the railway network in Maharashtra with three major railway stations and the headquarters of two railway zones. Most important cities in India are connected by rail to Mumbai. Maharashtra also has an intra-city railways network. The Mumbai Suburban Railways is responsible for carrying 6.1 million local passengers everyday. Airports Maharashtra, with 124 km of road for every 100 sq km of geographical area, stands fourth among the major states in the country. Under the on-going National Highway Development Programme (NHDP), 721 km of roads are being converted into 4/6 lane highways. Of this, 319 km has already been upgraded. Highway up-gradation projects covering a length of 611 km are also being undertaken under various schemes. Maharashtra has air connectivity from 10 cities. The main airports are at Mumbai, Pune, Nagpur and Nashik. Mumbai is India s busiest airport. An additional airport is being proposed at Navi Mumbai, and a greenfi eld airport is proposed near Pune. The state s airports handle 34 per cent of the country s international passengers.

8 Ports Maharashtra is the primary hinterland for Mumbai Port, with nearly 44 per cent of its traffi c originating from within the state. Mumbai itself accounts for nearly 28 per cent of the total traffi c of its port. The port of Mumbai is situated almost midway along the west coast of India and is endowed with a natural harbour. There are three enclosed wet docks: Indira, Prince's and Victoria. For handling crude and petroleum products, there are four jetties at Jawahar Dweep, an island in the Mumbai harbour. Chemicals and products are also handled at Pir Pau. The port handles all types of cargo -accounting for up to a sixth of the total sea-borne trade of the country. The entire port area is served by an extensive network of roads of over 126 km. The port owns and operates its own railway, which is connected to the broad gauge main lines of the Central and Western Railway at its Interchange Railway Yard at Wadala. The Railway runs an 11 km route between Ballard Pier and Wadala and has an extensive network of tracks of about 130 km. It serves the docks as well as the important installations and factories on the Port Trust estates. It has its own fl eet of nine diesel locomotives. For handling inland container depot (ICD) traffi c, a full-fl edged railway container depot (RCD) has been set up at the Cotton Depot with facilities for reception and stacking of containers. It can handle two trains of 45 wagons with double dispatch facilities. Power The state has the largest installed electricity generation capacity in the country. Between and , the capacity increased from 8,876 MW to 15,152 MW. In addition, the state has a captive electricity generation capacity of 704 MW. Between and , total electricity generated in the state increased from 37,311 million kwh to 64,740 million kwh. This represents an annual average growth rate of 4.7 per cent. Thermal plants account for the largest share of electricity generation (80.6 per cent) in Maharashtra. The consumption of electricity increased from 29,971 million kwh in to 49,945 million kwh in , at an annual average growth rate of 4.3 per cent. The industrial sector was the largest consumer followed by the domestic and agriculture sectors. Source: Economic Survey of Maharashtra, Further, projects aggregating over 6,300 MW are in the planning stage. Maharashtra is among the few states in the country with signifi cant presence of private sector players in the electricity generation and distribution business. Of the total installed capacity in the state, the private sector accounts for 18 per cent of generation capacity and 22 per cent of electricity generated. Of the total distribution, the private sector accounts for 28 per cent of total power sold. Over two million consumers are served by private power suppliers. Social Infrastructure Education The Government of Maharashtra aims to achieve universal elementary education. The literacy rate in the state increased from 65 per cent in 1991 to 77 per cent in The state has the second highest literacy rate in the country. Its education network consists of 10 universities, over 1,800 higher education institutions, 67,800 primary and 17,530 secondary schools. Maharashtra has 344 engineering colleges, with an annual intake of over 88,000 students. The state also has 612 Industrial Training Institutes (ITIs) and 34 architecture colleges with an annual intake of over 93,000 and 1,000, respectively. Technical Education The Technical Education Department in Maharashtra has created a sound institutional framework, ensuring the availability of a pool of qualifi ed professionals to businesses in the state and the country. It has 90 management institutes with an annual intake of over 6,400 students. In addition, there are 26 hotel management institutes with an annual intake of over 1,450 students. There are 212 medical institutes and 136 nursing colleges with an annual intake of over 13,000 and 3,500, respectively. In addition, the state has 163 pharmacy institutes with an annual intake of over 8,800. Internationally reputed fi rms including Intel, Texas Instruments and Analog Devices have collaborated with IIT, Mumbai, to set up world-class laboratories in the areas of digital signal processing and microprocessors. Maharashtra has a number of reputed national R&D institutions including Centre for Development of Advanced Computing (C-DAC), Bhabha Atomic Research Centre, National Environmental Engineering Research Institute, National Chemical Lab and Tata Institute of Fundamental Research. The state also has one of the six Indian Institutes of Technology

9 MAHARASHTRA PAGE 9 (IITs) at Powai in Mumbai, part of the country's renowned network of engineering and technology institutions. IIT Mumbai has 13 departments and various centres for R&D. Health The public health infrastructure comprises 964 hospitals, 2,081 dispensaries and 1,806 primary health centres. The number of beds in various public and government-aided health institutions is 92,106, which is 930 beds per million population. The Total Fertility Rate is 2.2. The Infant Mortality Rate is 36 and Maternal Mortality Ratio is 149 (SRS ), which are lower than the national average. Telecommunications Maharashtra Telecom Circle (MTC) under Bharat Sanchar Nigam Ltd (a Government of India enterprise) is serving the entire state (except Mumbai, which is served by MTNL). The state has witnessed rapid development in telecommunications services during the past decade. The number of fi xed wire telephone subscribers grew from two million in 1995 to over six million in The growth in mobile telephony has been equally strong. Since its launch in 1997, the number of subscribers increased to over 5.85 million in Telecom Status as on Nov 30th, 2007 Total No. of Exchanges (Urban + Rural) 4,944 Working Connections Landlines 35,29,820 WLL 3,62,946 Cellular 26,80,684 No. of Villages with Public Telephone 37,006 No. of Internet Connections 3,40,080 No. of Broad Band Connections 1,13,001 Urban infrastructure: Given the criticality of urban areas to Maharashtra's economy (with almost half the population living in cities), number of steps are being undertaken to improve the urban infrastructure in the state. Important initiatives currently underway include: Mumbai Urban Transport Project (MUTP) MUTP aims to improve the transport infrastructure and services in Mumbai through investment in suburban railway projects, local bus transport, new roads, bridges, pedestrian subways and traffi c management activities. MUTP is estimated to cost $943 million. The World Bank has sanctioned a loan of $542 million for the project. Mumbai Urban Infrastructure Project (MUIP) MUIP is a $600 million project aimed at improving the road network in the Greater Mumbai region to facilitate effi cient traffi c management. The project, funded by the Mumbai Metropolitan Region Development Authority (MMRDA), envisages construction/ improvement of over 450 km of road network during the next three years. Key Industrial centres Mumbai Mumbai, the capital of Maharashtra, is the most populous city in the country. It has an international airport and two major ports, Mumbai and Nhava Sheva, and is the fi nancial and commercial hub of India, with the headquarters of most Indian banks and the Indian headquarters of a number of multinational banks, fi nancial institutions and insurance companies including Reserve Bank of India, Merrill Lynch, Goldman Sachs, JP Morgan, Barclays and Duetsche Bank. Most of the top Indian business houses as well as some of the world's top multinationals such as AT&T, General Motors, Daimler Chrysler, P&G and Shell have their Indian headquarters in Mumbai. The city is also the main centre for capital marketrelated activities and home to the country's two largest stock exchanges. The major industries in and around Mumbai are chemicals, textiles, fi nancial services and IT/ ITES. Mumbai is the centre of India's fi lm and entertainment industry, producing over 300 movies each year. It is a potential hub for fi nancial services, IT/ ITES, leisure and entertainment industries. Navi Mumbai In order to reduce pressure on Mumbai, Navi Mumbai has been developed as a twin city. Located adjacent to it, Navi Mumbai comprises 14 self-contained nodal townships that are strung along mass rapid transport corridors. It is designed to minimise travel time and distance between nodes and neighbouring cities. Navi Mumbai provides a well-planned and laid out urban area suited to meet the needs of a services economy. It also has adequate provision for establishment of industrial units in a planned manner. Future development plans for Navi Mumbai include an IT Park, commuter rail project, golf

10 courses, amusement parks, international convention centre and international sports complex, among others. Pune Pune, the second largest city in Maharashtra and sixth largest in the country, is a prominent hub for automobile and IT industries. The city is home to a large number of national and international players including Tata Motors, Bajaj Auto, Daimler Chrysler, Fiat, Bharat Forge, Tata Consultancy Services, Infosys and Wipro, among others. It is also a prominent education centre with a presence of over 100 colleges and institutions. It has 12 industrial areas focusing on automobiles, chemicals, consumer durables, engineering and information technology. Pune is a potential destination for automobiles and auto components, engineering, food processing, leisure and entertainment and biotechnology. Nashik Nashik is an important commercial and religious centre and has many automobile and auto-components, engineering and grape processing units. The major players in Nashik include Mahindra and Mahindra, Schneider Electric, Siemens and Crompton Greaves. It has seven industrial areas, with focus on engineering and automobiles. Nashik is a major destination for engineering, food processing and biotechnology industries. Nagpur Nagpur has excellent road and rail connectivity with all parts of the country. Its unique location in the sub-continent makes it a viable passenger and cargo hub. It is a growing industrial centre with 10 industrial areas. It is home to companies including Indo- Rama Synthetics, Electrolux and Voltas. It has potential for food processing, chemicals and engineering industries. Development potential Given the relatively advanced stage of Maharashtra's economic development, the state is in a position to exploit its strengths to increase the pace of economic development. While its dominance in the industrial sector is increasing, its relatively well-developed infrastructure and the existing upstream and downstream industrial linkages provide it an edge. Maharashtra is also well placed to signifi cantly benefi t from the on-going boom in the services sector, with its high per capita income and large urban population.

11 MAHARASHTRA PAGE 11 POLICIES & INCENTIVES To accord top priority to the industrial sector for the vital role it plays in a balanced and sustainable economic growth, employment generation, mobilisation of capital, and contribution to exports, the state government has introduced an industrial policy common to all industries and a few sector-specifi c policies. Industrial Policy Maharashtra has entered the next phase of economic reforms, with emphasis on structural changes in addition to fi scal incentives for the promotion of industry and balanced regional growth. The state aims to achieve economic development that should help in reducing the percentage of population living below the poverty line by 50 per cent by The state s aim is to ensure that its Human Development Index (HDI) be comparable with the best among Asian countries. The Industrial, Investment, and Infrastructure Policy aims at ensuring sustainable industrial growth through innovative initiatives for development of key potential sectors and further improving the conducive industrial climate, for providing the global competitive edge to industry. Strategies Policy objectives will be realised through the following strategies: Identifi cation of thrust sectors. Building up of quality infrastructure. Incentivising investments for employment generation in districts low on Human Development Index Attracting mega investments, both foreign and domestic. Commercial exploitation of local resources and local economic potential. Strengthening the SME sector through promotion of quality competitiveness, research and development and technology upgradation Nurturing industrial clusters Prevention of industrial sickness and revival of viable sick units. Smooth exit option for industries. Streamlining procedures, de-bottlenecking and creation of hassle free industry friendly environment. Strengthening institutional support. IT/ITES Policy Setting up of an Empowered Committee and a Directorate of Information Technology Fiscal incentives including stamp duty and electricity duty exemptions, double FSI (FAR) for units built in IT Parks. Permission for 24x7 working hours and relaxation of labour laws. Initiatives to strengthen human resources. Tourism Policy Maharashtra Tourism Development Corporation to work as a single window for clearance of tourism projects Tax exemptions and electricity supply at industrial rates Ease in land allotment process Biotech Policy Establishment of Maharashtra Biotechnology Board and Maharashtra Biotechnology Commission Setting up of a special Biotechnology Development Fund Creation of biotech parks and biotech resource centre Fiscal incentives including stamp duty and electricity duty exemptions and other incentives available to IT units Establishment of Grape Processing Industry Board Creation of wine institute and wine parks at Nashik/ Sangli Excise exemptions and other fi scal benefi ts Approved policy regime includes: Exemption of all state and local taxes and levies for transactions with the SEZ and for supply from domestic tariff areas to the SEZ Exemption from stamp duty and registration fees Grant of labour and environment-related permits and approvals through a dedicated single-window mechanism Permission to generate electricity for own consumption Expeditious process for land acquisition to set up SEZs Infrastructure Policy In order to improve the management of existing industrial infrastructure in the state, the government is planning to set up industrial township authorities in respective industrial areas. These authorities will be autonomous bodies responsible for managing common infrastructure with active participation from the industrial units located in the area. They will also collect taxes and revenues for various services.

12 In the fi rst phase, 12 such industrial township authorities shall be set up. The government is also planning to develop industrial parks in the state through private sector participation. The state s electricity sector is considered among the more progressive ones and the government has taken steps to further streamline the sector. It has set up the Maharashtra Electricity Regulatory Commission (MERC) under the provisions of the Electricity Regulatory Commission Act, The process of restructuring the Maharashtra State Electricity Board (MSEB) is underway. Incentives Electricity Duty: Export Oriented Units (EOUs), Information Technology (IT) and Bio-Technology (BT) units, and industries set up in Special Economic Zones (SEZs), and Electronic Hardware Technology Parks will be exempted from payment of Electricity Duty for a period of 10 years. Waiver of Stamp Duty and Registration Fees: New as well as old units undertaking Expansion/ Diversifi cation will be exempted from payment of Stamp duty up to 31st March Stamp duty exemption would be available as given below: BT and IT units in public Parks: 100 per cent BT and IT units in private Parks: 75 per cent Mega Projects: 50 per cent Strengthening Micro, Small and Medium Manufacturing Enterprises: Special Incentives for units coming up in the low Human Development Index Districts: New units setting up facilities in notifi ed districts (Annexure- II) and employing at least 75 per cent local persons as defi ned in the Employment of Local Persons Policy will be offered 75 per cent reimbursement of expenditure on account of contribution towards Employees State Insurance (ESI) and Employees Provident Fund (EPF) Scheme for a period of 5 years. Mega Projects The quantum of incentives within the approved limit will be decided by the High Power Committee under the chairmanship of chief secretary, Government of Maharashtra. Royalty Refund: All eligible units, new as well as old, undertaking expansion in Vidarbha region will be eligible for refund of royalty paid on purchase of minerals from mine owners within the state for a period of fi ve years from the date of commencement of commercial production. Promotion of Education and Research Institutions: Educational and research institutions of international or national standards, including world-class business education institutions, would be provided land in industrial areas/ estates at nominal or concessional rates. New Industrial Townships: Maharashtra pioneered the establishment of institutions of democratic decentralisation and local self-governance several decades ago. More recently, these concepts were extended through statutory amendments to enable the establishment of independent Industrial Townships. Incentives to promote quality competitiveness, research and development and technology up gradation: Five per cent subsidy on capital equipment for technology upgradation subject to maximum of Rs2.5 million 50 per cent subsidy on expenses incurred for quality certifi cation limited to Rs100, per cent subsidy on cleaner production measures limited to Rs500,000

13 MAHARASHTRA PAGE 13 Business Opportunities in Maharashtra Key Thrust Sectors Financial Services Maharashtra has the one of the best fi nancial infrastructures in the country and is commonly referred to as an economic powerhouse. Important fi nancial institutions like the Bombay Stock Exchange, the National Stock Exchange and Reserve bank of India are located in the state. About 95 per cent of the value of stock exchange deals is in Mumbai. A staggering 80 per cent of India's mutual funds are registered in Mumbai, and almost all transactions involving fi nancial institutions are done here. Over 90 per cent of merchant banking transactions are structured in Mumbai, which also accounts for 14 per cent of national bank deposits. Maharashtra continues to remain a favoured destination amongst both foreign as well as domestic investors. The three largest industrial groups in India have their fl agship companies in Maharashtra. These are the Tata Group, the AV Birla Group and Reliance. Maharashtra also enjoys the largest share of total foreign direct investment and foreign collaborations approved by the Government of India so far. These include Coca Cola, Mercedes Benz, Siemens, Procter & Gamble and Unilever, among others. Textile Industry Textile Parks in Maharashtra: Nardhana Textile Park, Dhule The total area of the Park would be about 648 Ha on which 72 plots will be demarcated. Butibori (Nagpur) Textile Park Spread over 100 Ha; 40 Ha are held in reserve for the bleaching and dyeing units, and 60 for non-polluting activities like garments, and weaving and spinning. Ambernath Textile Park It is an ultra-modern industrial area developed on 507 Ha near Ambernath, a suburb of Mumbai. Textile / Apparel SEZs in Maharashtra Developer Location Area (in hectares) MIDC Nagpur 383 MIDC Kagal 104 MIDC Yavatyamal 208 MIDC Pune 101 Nirmal Realty Pvt. Ltd. Thane 162 Lodha Dwellers Pvt. Ltd. Thane 360 Welspun Anjar SEZ Ltd. Anjar NA MIDC Solapur 195 MIDC Aurangabad 200 The state's key competitive advantage in textile industry is the abundant availability of cotton, which is a major raw material for the industry. Maharashtra accounts for about 65 million kg of cotton production, which is 19 per cent of the country s total production, and 272 million kg of cotton yarn, which is 12 per cent of the total production in India. Maharashtra also has a large base of skilled workforce for its textile industry. It has an installed capacity of 1.66 million spindles, which is 17 per cent of the country's capacity. The state government is also taking steps to strengthen the industry by establishing textile parks at Nagpur, Dhule and Ambernath. Key players in the state include Bombay Dyeing, Century Textiles and Raymond. Raymond plans to expand its denim manufacturing capacity at Yavatmal from 20 million metres per annum to 30 million metres. Carrera Holding Inc proposes to set up a green-fi eld textile project with an estimated investment of $130 million at Kolhapur. Nine Textile/ Apparel SEZs are planned in the state. Engineering Industry Maharashtra occupies an important place in both production and exports of engineering goods. The engineering industry is highly diversifi ed and produces a large range of products from industrial machinery to industrial castings and forgings. Initially concentrated in the Mumbai-Pune belt, it has spread all over the state, with the major production centres being Nagpur, Aurangabad, Nasik, and Kolhapur. The major engineering items of production and export are textile mill machinery, machinery for sugar, cement, and chemical plants, food processing machinery, construction machinery, tractors electric power machinery, transmission line towers, automobiles and ship and ship building. Key engineering goods companies situated in Pune are Bharat Forge Ltd., the world s second largest forging company and Cummins Engines Co Ltd.

14 Auto & Auto Components The auto sector has played a key role in the industrialisation of the state, which accounts for 38 per cent of the country's output and 40 per cent of the workforce engaged in the automobile industry. Every single segment, including two and three wheelers, passenger cars and commercial vehicles, is represented in the state. The major automobile centres include Pune, Nashik, Aurangabad and Nagpur. Pune is home to large players like Bajaj Auto Ltd, Daimler Chrysler Ltd and Telco. Nashik is home to India's largest multi-utility vehicle manufacturer, Mahindra & Mahindra. IT/ ITES Maharashtra accounts for more than 30 per cent of the country's software exports, with over 1,200 units based in the state. The government is largely focusing on providing infrastructure and fi scal incentives to IT units, IT in governance and institutional framework for the sector. Major IT players present in the state include Tata Consultancy Services, Infosys Technologies, Wipro, Patni Computers, i-flex Technologies, Veritas. The state is home to BPO centres of large national and international players including LG, HSBC, Aviva, vcustomer and Xansa. To provide impetus to the IT industry, the government has set up several state-of-the-art IT parks. The state s strengths in the sector include: 40 per cent of India s Internet users. 35 per cent of PC penetration in the country 169,000 trained technical personnel added to the manpower pool each year Development of a large number of IT parks in both the public and private sectors and development of a knowledge corridor. Pharmaceutical/ Biotechnology Maharashtra is among the most preferred destinations for the pharmaceutical industry. Out of the 20,053 registered pharmaceutical manufacturers in India, 4,100 are in Maharashtra. The state has strong research capabilities and accounts for over 30 per cent of the country s patents. Most international companies have shown their preference for Maharashtra. These include GlaxoSmithKline, Novartis, Pfi zer, Johnson & Johnson, Abbott, Aventis and Knoll. Major Indian companies such as Wockhardt, Sun Pharma, Cipla, Lupin and Nicholas Piramal have their base in Maharashtra, and are making forays into biotechnology. Wockhardt has already entered biopharmaceuticals, whereas Lupin and Nicholas Piramal are moving into innovative drug research. Reliance Life Sciences has made forays into stem cell research. The state is setting up a Biotech Park at Hinjewadi, near Pune. The major opportunities are primarily in the areas of contract research, contract manufacturing and clinical trials. Chemicals & Petrochemical Maharashtra has a strong presence in the chemicals, petrochemicals and oil and gas sector. The petrochemical industry has witnessed massive growth after the installation of India's offshore oil wells near Mumbai in It contributes 27.4 per cent of the country s chemicals, petrochemicals and oil and gas output. The chemicals sector in the country is expected to grow at 15 per cent per annum till 2010 and thus presents ample opportunity for the state, especially in the areas of polymers and plastics, fertilisers and synthetic yarns. The state also accounts for 18.2 per cent of the country's employment in the sector. It contributed 15 per cent of the total production of basic petrochemical products during , second only to Gujarat (62 per cent). Agriculture Agriculture is the mainstay of the state of Maharashtra. The main food crops are mangoes, grapes, bananas, oranges, wheat, rice, jowar, bajra and pulses. Cash crops include groundnut, cotton, sugarcane, turmeric, and tobacco. Large areas of the state have been brought under fruit cultivation - Nagpur oranges, oranges of Bathplug, Alphonso mangoes and grapes of Nashik. Maharashtra has been able to bring only 16 per cent of its area under irrigation. The state has pioneered the use of water saving technologies like drip and sprinkler irrigation, and watershed programmes and accounts for 60 per cent of the total area under drip irrigation in the country. The total irrigated area, which has been used for crop cultivation, is 33,500 sq km. To promote exports of fresh and processed agricultural produce, the Government of India has announced the creation of Agri Export Zones (AEZs). The state has identifi ed eight potential horticultural crops of commercial importance for AEZs. Source: Economic Survey of Maharashtra

15 MAHARASHTRA PAGE 15 Maharashtra is the largest producer of jowar, tur, cotton, onion, cashew nut, grapes, banana, orange, pomegranate and long stem cut fl owers. It is the second largest producer of soya bean and sugarcane. It has the highest per ha productivity of soyabean and second highest yield of sugar cane. Apart from 16 major fruit crops, spices and medicinal and aromatic plants have also been allowed under horticulture. Media & Entertainment The Media and Entertainment industry in India is essentially based in Maharashtra. Mumbai is the nerve centre of the widely popular Hindi fi lm industry, and along with Pune is the key centre for the entertainment industry. Mumbai also happens to be the celluloid capital of India. It is home to the country's fi rst Imax dome theatre. The city also has famous fi lm studios like Film City in Goregaon, Natraj in Andheri, and RK Studio in Chembur. Maharashtra is also home to the famous Film and Television Institute (FTII) in Pune. Established in 1960 on the erstwhile Prabhat studio premises, the FTII is one of the oldest and fi nest institutes in the fi eld of training in fi lm making and television programme production. Logistics: Mumbai Port The Mumbai Port caters to per cent of the total sea borne cargo handled by major ports of the country in terms of volume. It handles per cent of POL (petroleum, oil and lubricants) traffi c and 2.53 per cent of container traffi c (in terms of twenty-foot equivalent units - TEUs) handled by major ports of India. The year closed with a throughput of million tonnes of cargo traffi c, comprising million tonnes of imports and million tonnes of exports. JNPT Port The container traffi c handled during was 3.30 million TEUs against 2.67 million TEUs handled in The growth in container traffi c was per cent and overall growth in total traffi c was per cent. Inland Container Terminals at Nagpur, Mumbai and Pune Mumbai Industrial Corridor. Chiplun Infrastructure Pvt. Ltd has proposed to develop an FTWZ (Free Trade Warehousing Zone) in Mumbai on over 40 acres of land. Key Players Maharashtra has typically led the country's industrial development and continues to attract the largest quantum of investments, both domestic and foreign. The state presents several opportunities by providing signifi cant advantages across the value chain. Reliance Group Reliance Group, founded by late Dhirubhai H. Ambani ( ), is India's largest business house with total revenues of $16.8 billion, and exports of $2.5 billion. The group's activities span exploration and production (E&P) of oil and gas, refi ning and marketing, petrochemicals (polyester, polymers, and intermediates) and textiles. The Reliance Group has emerged as India's largest wealth creator in the private sector. The group has its corporate headquarters in Mumbai. Logistic hubs and warehousing facilities are expected to come up around major infrastructure projects like the Delhi

16 ICICI Bank Headquartered in Mumbai, ICICI Bank is India's largest private sector bank in terms of market capitalisation and second largest in terms of assets. It had total assets of $79 billion (end-march 2007), a network of over 950 branches and offi ces, about 3,600 ATMs, and 24 million customers (as of end July 2007). It offers a wide range of banking products and fi nancial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affi liates in the areas of investment banking, life and non-life insurance, venture capital and asset management. Bajaj Auto Ltd Bajaj Auto is a leading two-wheeler manufacturer. In , it sold over 1.5 million vehicles aggregating sales of $1.24 billion. It has three manufacturing plants in the state at Akurdi, Waluj and Chakan. It plans to open assembly plants in Brazil and Indonesia to enhance its overseas presence. Bajaj Auto is ramping up its production capacity to meet the increasing demand for twowheelers for domestic and export markets. Bharat Forge Ltd (BFL) Bharat Forge Ltd is the largest forging company in Asia and among the most technologically advanced commercial forging shops in the world. Its clients include Daimler Chrysler, Mitsubishi, Volvo, Renault and Toyota. BFL s plants for manufacturing forgings are located at Pune and Jalgaon. Its other plant for manufacturing engineering and other material handling equipment is located at Satara. BFL is increasing its manufacturing capacity from 140,000 TPA to 200,000 TPA. Recently, BFL acquired Carl Dan Peddinghaus (CDP), Germany's second largest forge shop with plants in Ennepetal and Daun/ Eifel. Tata Consultancy Services (TCS) Tata Consultancy Services, a part of the Tata Group, is one of India's largest IT organisations. It began operations in 1968 and offers services to Fortune 500 clients across 55 countries. TCS has its headquarters at Mumbai and development centres at Mumbai and Pune. In 1981, TCS set up the Tata Research, Design and Development Centre (TRDDC), India's fi rst industrial software R&D centre, in Pune. The core areas of research are systems and software engineering, process engineering, embedded systems, VLSI, bioinformatics and security. TCS has strategic, technical and marketing alliances with companies like Adobe Systems, Retail Pro, Microsoft Corporation, Mercury Interactive Corporation, Web Health Systems Ltd. and IBM. Pfizer Pfi zer is one of the fastest growing global pharmaceutical companies in India. Headquartered in Mumbai, Pfi zer Limited (India) had a turnover of $172 million (November 2006) and over 2,000 employees. Pfi zer established a large and modern plant at Thane near Mumbai in 1960, which has won a number of national safety awards. Recently, the Thane plant was upgraded to align with Pfi zer s global manufacturing standards. Pfi zer has invested $15.75 million in clinical research facilities in India Essel Group Started in 1976, the Essel Group is one of India s prominent business houses with a diverse portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Bharat Petroleum (BPCL) Established in 1976 following the nationalisation of the Burmah Shell Group, Bharat Petroleum Corporation Ltd (BPCL) is one of India's largest PSUs involved in the refi ning and retailing of petroleum products. BPCL had revenues of $17.61 billion for the year ended March 2006,. BPCL's refi nery in Mahul, Mumbai, processes about 9 million metric tonnes of crude oil per annum. The unit has so far processed 61 different types of crude, making it one of the most fl exible refi neries in the country. BPCL sells its products through a network of 4,562 retail outlets and 970 kerosene dealers spread all across India. Larsen & Toubro Larsen & Toubro Ltd is India's largest engineering and construction conglomerate. Founded in 1938, the company is headquartered in Mumbai. It had revenues of $5 billion (2006) and had 35,000 employees (2007). L&T generates almost 85 per cent of its revenue from the construction business. The company

17 MAHARASHTRA PAGE 17 has offi ces in the USA, Europe, the Middle East and Japan. Its inhouse capabilities in technology development are complemented by tie-ups with world leaders. Hindustan Unilever Ltd (HUL) Hindustan Unilever Ltd (HUL), formerly Hindustan Lever Ltd, is India's largest consumer products company. The company was established in 1933 as Lever Brothers India Ltd. With over 41,000 employees, it is headquartered in Mumbai, India. HUL's brands are spread across 20 distinct consumer categories. It has a leadership position in home & personal care products and foods & beverages. HUL s products are manufactured in 80 factories and its operations involve over 2,000 suppliers and associates. Godrej Group The Godrej Group was founded by Ardeshir and Pirojsha Godrej in It is one of the largest industrial groups in India, involved in businesses spanning appliances, precision equipment, machine tools, furniture, offi ce equipment, food-processing, security, materials handling and industrial storage solutions, construction and information technology. The group revenue was about $1.7 billion in FY The Godrej Group can be broadly divided into two major holding companies, working independently: Godrej Industries Ltd. and Godrej & Boyce Mfg. Co. Ltd. It operates across India and its products are exported to more than 40 countries. Mahindra & Mahindra Ltd (M&M) Mahindra & Mahindra Ltd (M&M), the fl agship company of the Mahindra Group was set up in It is a $4.5 billion conglomerate and has a leadership position in the Indian automotive sector. M&M spans sectors including automotive, farm equipment and systems and technologies. The company is a leading manufacturer of Multi-Utility Vehicles (MUVs) and tractors. By 2005, M&M had become the largest producer of SUVs in India. The company recently started a separate unit, Mahindra Systems and Automotive Technologies (MSAT), to focus on developing components and offering engineering services ACC Ltd ACC, set up more than six decades ago, is one of India s largest cement manufacturers. A pioneer in cement and Ready Mixed Concrete (RMC), ACC is also a leading Indian player in the refractories segment. ACC manufactures various types of ordinary portland cement, composite cement and special cement. The management control of the company was taken over by Swiss cement major Holcim in The company is the only cement fi rm to get the Superbrand status in India. It also provides consultancy services in the areas of project engineering, geological investigation and environment management. Kirloskar Group The Kirloskar Group, founded in 1888, is one of India's largest engineering and construction conglomerates with sales of $2.70 billion (2005) and 20,000 employees (2004). The group produces pumps, engines, compressors, lathes and electrical equipments such as motors, transformers and generators (it is the world s largest genset manufacturer). The Group today exports to over 70 countries Tata Chemicals Ltd Tata Chemicals Ltd is a Tata Group company, headquartered in Mumbai. It was a pioneer in the branded, iodised salt segment. Its products fi nd application in agriculture, animal nutrition, construction, food products, glass, metals, pharmaceuticals, safety and environment, soaps and detergents, textiles, and leather. Jet Airways Jet Airways, India s largest private sector airline, started its commercial operations in May The airline operates over 350 fl ights daily across 44 destinations within India and also operates fl ights to nine international destinations. In April 2007, Jet Airways bought out Air Sahara for $340 million. The deal will give the airline a combined domestic market share of 32 per cent. The airline has a fl eet size of 62 aircraft and employs over 10,000 people. Pantaloon Retail (India) Ltd Pantaloon Retail (India) Ltd is the fl agship company of the Future Group. It is India s leading retailer and operates multiple retail formats in both the value and lifestyle segment of the consumer market. Headquartered in Mumbai, the group operates over 5 million square feet of retail space, has over 450 stores across 40 cities in India and employs over 18,000 people. The company s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a hypermarket chain, Food Bazaar, a supermarket chain, and Central, a chain of seamless destination malls.

18 Indian Hotels Company (IHC) The Indian Hotels Company (IHC) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, recognised as one of Asia's largest and fi nest hotel companies. The company opened its fi rst property, The Taj Mahal Palace Hotel, in Bombay Taj Hotels Resorts and Palaces comprises 59 hotels at 40 locations across India with an additional 17 international hotels in the Maldives, Mauritius, Malaysia, the United Kingdom, the USA, Bhutan, Sri Lanka, Africa, the Middle East and Australia. Taj Hotels Resorts and Palaces is grouped into Luxury, Leisure and Business categories to provide consistency across different hotels and standardise products and services. Nicholas Piramal India Ltd (NPIL) NPIL is the fl agship company of the $500 million Piramal Enterprises. NPIL came into existence in 1988 when it acquired Nicholas Laboratories from Sara Lee. NPIL is India's second largest pharmaceutical healthcare company. It has a 2,700-strong fi eld force and together with its joint ventures it has 16 strong brands in the Indian pharma industry. In the last 15 years, the company has grown primarily on acquisitions, mergers and alliances. Key Investments Maharashtra is the only Indian state to feature in IMD Switzerland s World Competitiveness Report 2006, and was even ranked ahead of countries like Korea, South Africa, Brazil, Russia and Italy. According to a recent Reserve Bank of India bulletin, Maharashtra has emerged as one of the leading states in attracting corporate investments. There has been tremendous response to the Mega Project Policy of the state with over $11.5 billion investment commitments. Several global players like Boeing, General Motors, Volkswagen, Siemens, Daimler Chrysler, Renault and Mico Bosch have begun setting up facilities in the state.

19 MAHARASHTRA PAGE 19 DOING BUSINESS Key Approvals Required List of Apporvals & Clearances Required Respective Departments of State Estimated time Registration, IEM, Industrial licenses Registrar of Firms 7-10 days Allotment of Land/Shed in Industrial Estates or Industrial Areas Maharashtra Industrial Development Corporation Chief Commissioner of Land Administration (CCLA) Acquisition / Alienation of Govt. Lands 45 days Site & Building Plan Approval Change of Land Use Consent for Establishment under pollution control Green Orange Red Panchayat Raj Department Urban Development Authority Town & Country Planning Municipality Urban Development Authority Town & Country Planning Municipality Maharashtra Pollution Control Board 7 days up to 1000 sq. mts. 21 days above 1000 sq. mts. 7 days 45 days 7 days 21 days 45 days Green 7 days Consent for Operation 21 days Maharashtra Pollution Control Board under pollution control Orange Red 45 days No Objection Certifi cate for Fire Safety Fire Services Department 15 days Excise Registration Excise Department 14 days VAT/CST Registration Commercial Taxes Department 7 days Power Feasibility 7 days Distribution Companies Power Connection 23 days Approval of Factory Plans 7 days Factories Department Factory License 7 days Assessment of the Business Climate of the State Strong Industrial Base It is the one of the most industrialised states in India and contributes around 20 per cent of the country's Gross Domestic Product (GDP). Around 30 per cent of India's exports - gems/ jewellery, textiles/ garments, leather goods, engineering goods, plastics, pharmaceuticals, electronics/ information technology, horticulture - are from Maharashtra. The state has a diversifi ed industrial base. Its output ranks fi rst in 12 out of 35 sectors. Maharashtra ranks among the top three in 25 sectors. It has the largest network of industrial areas industrial complexes, with 125,000 acres (50,000 hectares) of land. There are specialised parks for different sectors, including IT. High literacy rates and developing skills Maharashtra has a high literacy rate, with an average literacy rate of 77 per cent, which is higher than the national average. Network of Educational Institutions 12 % of the country s Universities 17 % of Medical Colleges. 13 % of Engineering Colleges 19 % of Management Institutions 169,000 technocrats every year Strong Service Sector Services contribute 61 % to the state s economy. 20% of country s software exports. 32% of country s IT professionals. 90% of all merchant banking activities take place in Mumbai.