MAHARASHTRA. September PDF Free Download

MAHARASHTRA September 2009

Investment climate of a state is determined by a mix of factors Skilled and cost-effective labour Labour market flexibility Labour relations Availability of raw materials and natural resources Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation Resources/Inputs Incentives to industry Tax incentives and exemptions Investment subsidies and other incentives Availability of finance at cost-effective terms Incentives for foreign direct investment (FDI) Profitability of the industry Investment climate of a state Regulatory framework Physical and social infrastructure Condition of physical infrastructure such as power, water, roads, etc. Information infrastructure such as telecom, IT, etc. Social infrastructure such as educational and medical facilities 2

The focus of this presentation is to discuss State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Key players Doing business in Maharashtra Overall state competitiveness 3

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE A snapshot of Maharashtra Located in the western region of India, Maharashtra is the third-largest state in India in terms of area and the second-largest in terms of population. It stretches over 307,690 sq km with a total estimated population of 109.7 million as of March 2009. The state shares borders with Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Goa and the Union Territory of Dadra and Nagar Haveli. The Arabian Sea makes up the state's western coast. The state capital, Mumbai, is the sixth-largest metropolitan area in the world and India s largest and most populous city. 4

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Socio-economic snapshot Population (Census 2001) Density (2001) Sex ratio (Census 2001) Principal languages Literacy rate (Census 2001) Major minerals Major industries Major crops GSDP at current prices in 2007 08 Domestic airports 96.9 million 315 persons per sq km 922 females per 1,000 males Marathi and Hindi 77 per cent Coal, manganese and iron Financial services, textiles, auto ancillaries, chemical and allied products, electrical and non-electrical machinery, petroleum and allied products, wine, jewellery, pharmaceuticals, engineering goods, media and entertainment, etc. Groundnut, cotton, sugarcane US$ 146.7 billion 10 the main airports are Mumbai, Pune, Nagpur and Nasik Source: Economic Survey of Maharashtra 2008 09, page 9 5

US$ bn STATE ECONOMY AND SOCIO-ECONOMIC PROFILE One of the fastest-growing states in India (1/4) Gross state domestic product (GSDP) registered an average growth of 16.1 per cent in 2007 08. Net state domestic product (NSDP) was at US$ 125.4 billion and per capita state income at US$ 1,168 in 2007 08. State contributes 13 per cent to the national income. 160 140 120 100 80 60 40 20 0 GSDP growth Source: Economic Survey of Maharashtra 2008 09, page 25 Source: Economic Survey of Maharashtra 2008 09 6

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE One of the fastest-growing states in India (2/4) Maharashtra vs India: Estimated growth rates 2008 09 (in %) Sector India (GDP) Maharashtra (GSDP) Agriculture and allied activities 2.6 (7.1) Industry 4.8 4.8 Services 9.6 10.5 Total 7.1 6.7 Source: Economic Survey of Maharashtra 2008 09, page 19 Sectoral contribution to GSDP (in %) Year Primary Secondary Tertiary 1960 1961 31 23 46 1970 1971 22 29 49 1980 1981 24 30 46 1990 1991 21 32 47 2000 2001 17 25 58 2006 2007 15 26 59 2007 2008 14 27 59 Source: Economic Survey of Maharashtra 2008 09, page 25 7

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE One of the fastest-growing states in India (3/4) It accounts for 24.6 per cent of foreign direct investment (FDI), 20 per cent of the country s industrial output and 27 per cent of India s exports. Inflows received by top five destinations in India (%), April 2000 June 2009 Of the total foreign direct investment (FDI) in India, Maharashtra continued to be at the top position in 2009. FDI approved projects, for the period April 2000 to July 2009, were mainly in services (23 per cent), IT and telecom (18 per cent), housing, real estate and construction (13 per cent) and automobiles (4 per cent). Source: Fact sheet on FDI, Department of Industrial Policy and Promotion (DIPP) FDI statistics, www.dipp.nic.in, accessed on September 20, 2009 8

(in %) (in %) STATE ECONOMY AND SOCIO-ECONOMIC PROFILE One of the fastest-growing states in India (4/4) Sectoral composition of income, 2008 09 Changing composition of state income Source: Economic Survey of Maharashtra 2008 09, page 22 Source: Economic Survey of Maharashtra 2008 09, page 21 9

INFRASTRUCTURE STATUS Well developed road, rail and air infrastructure (1/2) Source: Economic Survey of Maharashtra 2008 09, page 154 11 ROAD NETWORK AIRPORTS RAILWAYS

INFRASTRUCTURE STATUS Well developed road, rail and air infrastructure (2/2) Railways Airports Road Network Most cities in Maharashtra are well connected through an efficient railway network. The Central Railways, one of the zones of the Indian Railways, has its headquarters in Mumbai, at the Chhatrapati Shivaji Terminus. Maharashtra also has an intra-city network of railways. The suburban railways is responsible for carrying 6.1 million passengers every day. Maharashtra has air connectivity with 10 cities, the main airports being Mumbai, Pune, Nagpur and Nashik. Mumbai is India s busiest airport. Further, an additional airport is being proposed at Navi-Mumbai. A greenfield airport is proposed near Pune. 34 per cent of the country s International passengers are handled by airports in Maharashtra. The state has the largest road network in the country with a total road length of over 235,595 km. National highways length is 4,367 km and state highways length is 33,800 km Under the ongoing National Highway Development Programme (NHDP), 721 km are being converted into four- to six-lane highways. The Mumbai-Pune Expressway forms an important link between the financial and the cultural capital of the state. Source: Economic Survey of Maharashtra 2008 09, page 154 12

INFRASTRUCTURE STATUS State s coastline served by several ports Ports There are two principal ports at Mumbai and Nhawa Sheva (JNPT) along the state s 720 km coastline. In addition, the state has 48 smaller ports. JNPT is the country's largest container port, with container traffic of over 4.06 million 20-footequivalent unit (TEUs) in 2007 08. It also ranks among the top 30 container ports in the world. JNPT has a container terminal operated by P&O, UK, which has been developed through private investment on a build-operate-transfer (BOT) basis. The road connectivity to the JNPT port shall significantly improve on completion of the ongoing expansion of the national highway linking the port to the mainland. Source: Yearly performance, JNPT port, www.jnport.gov.in, accessed on September 20, 2009 13

INFRASTRUCTURE STATUS Largest installed generation capacity (1/2) Power Installed capacity, 2006 07 Maharashtra has the largest installed electricity generation capacity in the country. Total electricity generation increased from 37,311 million kwh to 79,721 million kwh between 1990 91 and 2007 08. The consumption of electricity in the state increased from 29,971 million kwh in 1990 91 to 69,838 million kwh in 2007 2008. Source: Economic Survey of Maharashtra 2008 09, page 135 Source: Economic Survey of Maharashtra 2008 09, page 135 14

INFRASTRUCTURE STATUS Largest installed generation capacity (2/2) Power Installed capacity of thermal stations continued to form the largest share (51 per cent) of the installed generating capacity followed by hydro stations. The peak requirement for power in the state stood at 17,489 MW for the year 2007 08. The state has a captive electricity generation capacity of 908 MW. The industrial sector is the largest consumer followed by domestic and then agriculture. Source: Economic Survey of Maharashtra 2008 09, page 135 15

INFRASTRUCTURE STATUS One of the strongest telecom markets in India Telecom The state has witnessed rapid development in telecommunications services over the last decade. Maharashtra is the second-largest GSM market with 11.2 million subscribers in 2006 07. By March 2008, the number of PCOs under MTNL and BSNL were 0.16 million and 0.31 million, respectively. Telecom status of Maharashtra as on June 30, 2009 Total no of exchanges (urban + rural) Working connections 4,939 Landlines 2,916,406 Wireless Local Loop (WLL) 344,420 Cellular 3,630,105 No. of villages with public telephones 38,170 No. of Internet connections 341,965 No. of broadband connections 329,070 Source: Maharashtra Telecom Circle, www.maharashtra.bsnl.com, accessed on September 20, 2009 The number of mobile phone users per lakh population at the end of December 2008 in the state was 40,713. Source: Economic Survey of Maharashtra 2008 09, page 151 16

INFRASTRUCTURE STATUS Social infrastructure education and health (1/2) Education Maharashtra has the second-highest literacy rate in the country. The state s education network consists of 10 universities, over 1,800 higher education institutions, 72,053 primary schools and 20,339 secondary schools. The state has 549 engineering colleges with an annual intake of over 100,000 students. In addition, there are 617 Industrial Training Institutes (ITIs) and 53 architecture colleges with an annual intake capacity of over 95,000 and 2,500, respectively. One of the six Indian Institutes of Technology (IITs) is located at Mumbai. The state also 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 Laboratories Tata Institute of Fundamental Research Source: Economic Survey of Maharashtra 2008 09, pages 187-189 17

INFRASTRUCTURE STATUS Social infrastructure education and health (2/2) Health There are 253 medical institutes and 136 nursing colleges with an annual intake of over 10,926 and 3,500, respectively, in the state. The network of public and government-aided health facilities in the state comprises 1,099 hospitals, 2,072 dispensaries and 1,818 primary health centres. The number of beds in various public and government-aided health institutions in the state is 94,603, which is 88 beds per million population. Source: Economic Survey of Maharashtra 2008 09, page 191 18

INFRASTRUCTURE STATUS Mumbai is a leading industrial centre of the country 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. It is the financial and commercial hub of India with headquarters for most Indian and multinational financial institutions, including the Reserve Bank of India (RBI). Mumbai is the centre of India s film and entertainment industry, producing more than 800 movies each year. The city is the main centre for capital marketrelated activities and has the country s two largest stock exchanges. Mumbai is also home to several large chemicals and pharmaceutical players. 19

INFRASTRUCTURE STATUS Maharashtra has key industrial centres with presence of several industries (1/2) Pune Pune is the second-largest city in Maharashtra and the sixth-largest city in the country. The city houses a large number of national and international players from the automobile and IT industries, including Tata Motors, Bajaj Auto, Daimler Chrysler, Fiat, Bharat Forge, Tata Consultancy Services, Infosys and Wipro, among others. It has 12 industrial areas focussing on automobiles, chemicals, consumer durables, engineering and information technology. It is also a prominent education centre with the presence of over 100 colleges and institutions. 20

INFRASTRUCTURE STATUS Maharashtra has key industrial centres with presence of several industries (2/2) Nashik Nagpur Nashik is an important commercial and religious centre in the state. It has a significant presence of automobile and auto-components, engineering and grape processing industries. The major players in Nashik include Mahindra & Mahindra, Schneider Electric, Siemens and Crompton Greaves. Being centrally located, Nagpur has excellent road and rail connectivity to all parts of the country. Its unique location in the Indian sub-continent makes it a viable passenger and cargo hub. It is home to reputed companies such as Indo-Rama Synthetics, Electrolux and Voltas. Nashik is a potential destination for engineering, food processing and biotechnology industries in the state. 21 Nagpur is a potential destination for food processing, chemicals and engineering industries.

STATE POLICIES AND INCENTIVES Thrust on industry in state-level policies (1/2) Industrial, Investment and Infrastructure Policy, 2006 The policy is valid up to March 31, 2011. Its target is to reduce the percentage of population living below the poverty line by 50 per cent by the year 2010. In addition, it seeks to improve the Human Development Index (HDI) of Maharashtra to a level comparable with the best of Asian countries. The policy aims at ensuring sustainable industrial growth through innovative initiatives for development of key potential sectors and further improving the state s conducive industrial climate for providing a global competitive edge to the state s industry. Policy objective: To achieve higher and sustainable economic growth with emphasis on balanced regional development, employment generation through greater private and public investment in industrial and infrastructure development. Policy targets: Industrial sector growth rate of 10 per cent by 2010 Service sector growth rate of 12 per cent by 2010 Additional employment generation of two million by 2010 23

STATE POLICIES AND INCENTIVES Thrust on industry in state-level policies (2/2) Policy strategies: Identification of thrust sectors Building quality infrastructure Creating incentives for investments and for employment generation in districts low on the Human Development Index Attracting mega investments, both foreign and domestic Emphasis on tapping local economic resources Strengthening the small and medium enterprise (SME) sector through promotion of quality, competitiveness, research and development, and technology upgradation Nurturing industrial clusters Facilitating smooth exit option for sick industries and, in some cases, reviving sick units if viable Streamlining procedures and creation of a hassle-free industry friendly environment Strengthening institutional support 24

STATE POLICIES AND INCENTIVES State-level policies on sectors with growth potential (1/2) IT/ITeS Policy, 2003 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 Tourism Policy, 2006 Maharashtra Tourism Development Corporation (MTDC) to work as a singlewindow for clearance of tourism projects Tax exemptions and electricity supply at industrial rates Permission for 24x7 working hours and relaxation of labour laws Land allotment process to be made easier Initiatives to strengthen human resources 25

STATE POLICIES AND INCENTIVES State-level policies on sectors with growth potential (2/2) Biotech Policy, 2001 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 a wine institute and wine parks at Nashik/Sangli Excise exemptions and other fiscal benefits 26

STATE POLICIES AND INCENTIVES Emphasis on promoting SEZ activity Special Economic Zone (SEZ) Policy, 2006 Development of special economic zones (SEZs) in the state SEZs, earmarked as duty-free enclaves, have a relaxed and business-friendly policy regime aimed at promoting rapid industrial development and employment generation 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 27 Expeditious process for land acquisition to set up SEZs

STATE POLICIES AND INCENTIVES Policy for infrastructure upgradation 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 industrial units located in the area. They will also collect taxes and revenues for various services. In the first phase, 12 such industrial township authorities shall be set up. The government is also planning to develop industrial parks through private sector participation. The state s electricity sector is considered among the more progressive ones and the state government has taken steps to further streamline the sector. The Maharashtra Electricity Regulatory Commission (MERC) has been set up under the provisions of the Electricity Regulatory Commission Act, 1998. The process of restructuring the Maharashtra State Electricity Board (MSEB) is underway. 28

STATE POLICIES AND INCENTIVES Package scheme of incentives (1/3) Scheme of incentives: Electricity duty: Export-oriented units (EoUs), information technology (IT) and biotechnology (BT) units, and industries set up in 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 units undertaking expansion/diversification, will be exempted from payment of stamp duty up to March 31, 2011. 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 enterprises (MSMEs): Incentives to promote quality competitiveness, research and development, and technology upgradation: 5 per cent subsidy on capital equipment for technology upgradation subject to a maximum of US$ 60,975 50 per cent subsidy on expenses incurred for quality certification limited to US$ 2,440 25 per cent subsidy on cleaner production measures limited to US$ 12,196 29

STATE POLICIES AND INCENTIVES Package scheme of incentives (2/3) Special incentives for units coming up in the low Human Development Index districts: New units setting up facilities in notified districts (Annexure-II) and employing at least 75 per cent local persons as defined in the Employment of Local Persons Policy will be offered 75 per cent reimbursement of expenditure on account of contribution towards Employee State Insurance (ESI) and Employee Provident Fund (EPF) schemes for a period of five years Mega projects* Quantum of incentives within the approved limit to be decided by high-powered committee under the chairmanship of Chief Secretary, Government of Maharashtra * Mega projects can be defined as industrial projects with investment of more than US$ 122 million or generating employment for more than 1,000 persons or projects with investment more than US$ 61 million or generating employment for more than 500 persons, and would be eligible for a customised package of incentives such as exemption from sales tax for two years for mega projects in Pune 30

BUSINESS OPPOTU Package scheme of incentives (3/3) Royalty refund: All eligible units, new as well as old units, undertaking expansion in Vidarbha region to be eligible for refund of royalty paid on purchase of minerals from mine owners within the state of Maharashtra for a period of five 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, to 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. The concept has been extended through statutory amendments to enable the establishment of independent industrial townships 31

BUSINESS OPPORTUNITIES Maharashtra stands out for its financial strength (1/2) Financial services The presence of a robust financial infrastructure is an asset for the state. Key financial institutions, such as the Bombay Stock Exchange, National Stock Exchange and the RBI, are located in the state. Over 95 per cent of the value of stock exchange deals is in Mumbai. Over 90 per cent of India's mutual funds are registered in the state. Over 90 per cent of merchant banking transactions are structured in Mumbai. Around 20 per cent of the aggregate deposits of scheduled commercial banks are in Mumbai. 33

BUSINESS OPPORTUNITIES Maharashtra stands out for its financial strength (2/2) Financial services The three largest industrial groups in India namely, Tata Group, AV Birla Group and Reliance have their flagship companies in Maharashtra. Maharashtra also enjoys the largest share of the total FDI and foreign collaborations approved by the Government of India. These include Coco Cola, Mercedes Benz, Siemens, Procter & Gamble and Unilever, among others. Source: Economic Survey of Maharashtra 2008 09, pages 78, 82 34

BUSINESS OPPORTUNITIES Focus on textile industry (1/2) Textile industry The state has an abundance of cotton, which is its key competitive advantage. It accounted for about 62 million kg of cotton production, which was 21 per cent of the country s total production, and produced 267 million kg. of cotton yarn in 2007 08. The state has a large base of a skilled workforce. As of 2007 08, the state s installed capacity was 3.96 million spindles, 53,548 rotors and 17,729 looms. Steps to strengthen the textile industry in the state include establishing textile parks at Nagpur, Dhule and Ambernath. Key players in the state include Bombay Dyeing, Century Textiles, Vertex Spinning and Raymond. Raymond plans to expand its denim manufacturing capacity at Yavatmal from 20 to 30 million metres per annum. Nine textile/apparel SEZs are planned to be set up in the state. Sources: Ministry of Textiles, Annual Report 2008 09; www.txcindia.com, accessed on September 20, 2009 35

BUSINESS OPPORTUNITIES Focus on textile industry (2/2) Textile parks in Maharashtra Nardhana Textile Park, Dhule Spread over 648 hectares on which 72 plots will be demarcated Butibori (Nagpur) Textile Park Spread over 100 hectares, from which 40 are in reserve for bleaching and dyeing units, and 60 for non-polluting activities like garments, weaving and spinning Ambernath Textile Park 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 An ultra-modern industrial area developed on 507 hectares near Ambernath, a Mumbai suburb Sources: Ministry of Textiles, Annual Report 2008 09; www.txcindia.com, accessed on September 20, 2009 36

BUSINESS OPPORTUNITIES Thrust areas of the state ports and logistics hubs (1/2) Logistics industry Mumbai Port The Mumbai port caters to about 10.9 per cent of the total sea-borne traffic handled by major ports of the country in terms of volume. It handles about 12.84 per cent of non-container traffic and 2 per cent of container traffic (in terms of TEUs) handled by major ports in India. The year 2007 08 closed with a throughput of 57.03 million tonnes of cargo traffic, comprising 32.37 million tonnes of imports and 24.66 million tonnes of exports. Rapid growth in FMCG, pharma and agro processing industries Major infrastructure projects Key Growth Drivers Booming auto industry Mumbra Port Burgeoning retail sector FTWZs Inland container terminal at Nagpur Mumbai Pune 37

BUSINESS OPPORTUNITIES Thrust areas of the state ports and logistics hubs (2/2) JNPT Port The container traffic handled during the year 2008 09 was 3.95 million TEUs against 4.06 million TEUs handled during 2007 08. The overall growth in total traffic was 2.58 per cent. The Pune-Nashik-Baroda belt, dominated by Telco, Mahindra, Fiat and GM, is an emerging hub for the auto industry nationally. Logistic hubs and warehousing facilities are expected to come up around major infrastructure projects, such as the Delhi- Mumbai Industrial Corridor. Chiplun Infrastructure Pvt Ltd has proposed the development of free trade warehousing zone (FTWZ) in Mumbai over 40 acres. Sources: Economic Survey of Maharashtra 2008 09, page 148.; Yearly performance, JNPT port, www.jnport.gov.in, accessed on September 20, 2009 38

BUSINESS OPPORTUNITIES Large and diversified engineering base (1/2) Engineering industry Maharashtra occupies an important place in both the production and export of engineering goods from the country. The engineering industry in the state is highly diversified and produces a large range of parts, from industrial machinery to industrial castings and forgings. The industry, which was initially concentrated in the Mumbai-Pune belt, has spread all over the state with the major production centers being Nagpur, Aurangabad, Nashik and Kolhapur. The major engineering items of production and export in Maharashtra 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 building. Some of the key engineering companies situated in Pune include Bharat Forge Ltd, the world s secondlargest forging company, and Cummins Engines Co Ltd. 39

BUSINESS OPPORTUNITIES Large and diversified engineering base (2/2) Some engineering companies present in Maharashtra: SBEM Pvt Ltd Pune Atul Electro Formers Pvt Ltd, Pune Hylo Transmissions Pvt Ltd, Pune Kam-Avida Enviro Engineers Pvt Ltd, Pune Legend Communications Pvt Ltd, Pune Mahavir Group of Industries, Pune 40

BUSINESS OPPORTUNITIES Strong presence in automobile industry (1/2) Auto and auto-components Maharashtra accounts for 38 per cent of the country's automobile output. 40 per cent of the workforce engaged in the automobile industry is employed in the state. Every segment of the sector, including two and three wheelers, passenger cars and commercial vehicles, is represented in the state. The major automobile centres in the state include Pune, Nashik, Aurangabad and Nagpur. Pune is home to large players like Bajaj Auto Ltd, Daimler Chrysler Ltd, Telco, etc. Nashik is home to India's largest multi-utility vehicle manufacturer, Mahindra & Mahindra Ltd. 41

BUSINESS OPPORTUNITIES Strong presence in automobile industry (2/2) State s strength in the sector: Presence of established manufacturers Presence of engineering sector Large, skilled labour base Good transport infrastructure for logisticsintensive auto industry 42

BUSINESS OPPORTUNITIES Growing clout of new economy sectors (1/2) IT/ITeS Maharashtra accounts for more than 30 per cent of the country's software exports, with over 1,200 software units based in the state. The Government of Maharashtra is focussing on providing IT-related infrastructure, fiscal incentives to IT units, IT in governance and in providing an institutional framework for the IT sector. Major IT players present in the state include Tata Consultancy Services, Infosys Technologies, Wipro, Patni Computers, i-flex Technologies, Veritas. BPOs of large national and international players in the state include LG, HSBC, Aviva, vcustomer, Xansa, EDS and e- Gain, among others. The state has set up several state-of-the-art IT parks to provide impetus to the IT industry. 43

BUSINESS OPPORTUNITIES Growing clout of new economy sectors (2/2) State s strength in the industry: 40 per cent of India s Internet users. 35 per cent of PC penetration in the country. 169,000 trained technical personnel added to manpower pool each year. Development of large number of IT parks in both the public and private sector and development of knowledge corridor. New developments in the industry: Hughes Communications Ltd to set up 100 information communication technology (ICT) kiosks each in Nashik and Sangli districts, generating around 600 jobs. Organised Gram Baithaks to demonstrate services and applications that ICT kiosks can offer. 44

BUSINESS OPPORTUNITIES Focus on pharma and biotech Pharmaceutical and biotechnology The state accounts for 32 per cent of the country s biotech output. It has strong research capabilities and accounts for over 30 per cent of the country s patents. The state has a presence of reputed companies focussing on the biotech sector, including Wockhardt, Nicholas Piramal, Cipla and Lupin, among others. Major opportunities have emerged in the pharmaceutical sector, primarily in the areas of contract research, contract manufacturing and clinical trials. State s strength in the industry: Low costs, strong manufacturing base. Well-developed laboratory and R&D infrastructure. A strong resource pool. Presence of reputed companies focussing on the sector, including Wockhardt, Nicholas Piramal, Cipla, GlaxoSmithKline, Johnson & Johnson. Backward linkages with chemicals and petrochemicals sector is an added advantage. Source: Seventh Industry Survey, ABLE website, http://www.ableindia.org/, accessed on September 14, 2009 45

BUSINESS OPPORTUNITIES Leading player in petrochemicals sector (1/2) Chemicals and petrochemicals Maharashtra has a strong presence in the chemicals, petrochemicals, and oil and gas sector. The petrochemical industry has witnessed tremendous growth in the state after the installation of India's offshore oil wells near Mumbai in 1976. The state contributes 27.4 per cent of the country s chemicals, petrochemicals, and oil and gas output. It also accounts for 18.2 per cent of the country's employment in the sector. Maharashtra contributed as much as 15 per cent of the total production of basic petrochemical products during 2006 07, second only to Gujarat. Opportunities in the chemicals sector primarily exist in the areas of polymers and plastics, fertilisers and synthetic yarn. 46

BUSINESS OPPORTUNITIES Leading player in petrochemicals sector (2/2) Petrochemical industrial units have set up base taking into account three main criteria: Logistical convenience Availability of raw materials Internal and external economies of scale Petrochemical companies in Maharashtra: Reliance Petrochemicals Patalganga, 70 km from Mumbai State s strength in the industry: Upstream and downstream linkages for raw materials and products Availability of oil and gas from Bombay High oil fields (offshore Mumbai) spurred large-scale development of chemicals and petrochemicals industry in the state Bharat Petroleum Corporation Limited (BPCL) Mumbai (Mahul) Indian Petrochemicals Corporation Ltd (IPCL) Nagothane (near Mumbai) IPCL Rabale, Navi Mumbai (catalyst manufacturing) Hindustan Petroleum Corporation Ltd (HPCL) Mumbai refinery 47

BUSINESS OPPORTUNITIES Thrust areas of the state agro and food processing (1/4) Agro and food processing Large areas of the state have been brought under fruit cultivation. Some of Maharashtra s well-known agro products include Nagpur and Bathplug oranges, the Alphonso mangoes and the grapes of Nashik. The state pioneered the use of water saving technologies, such as drip and sprinkler irrigation and the watershed programme, and accounts for 60 per cent of the total area under drip irrigation in the country. The Government of India (GoI) has announced the creation of the Agri Export Zone (AEZ) for promoting greater exports of fresh and processed agricultural produce from the country. The state has identified eight potential horticultural crops of commercial importance for the AEZ. The main food crops of Maharashtra are mangoes, grapes, bananas, oranges, wheat, rice, jowar, bajra, and pulses. Cash crops include groundnut, cotton, sugarcane, turmeric and tobacco. Sugar output in the state in 2007 08 was pegged at 909 lakh million tonnes with an average recovery rate of 11.9 per cent. 48

BUSINESS OPPORTUNITIES Thrust areas of the state agro and food processing (2/4) State s strength in the industry: Diverse agro climatic conditions suitable to cultivation of a wide range of crops. Strong industrial base with scope for agroprocessing and agro exports. 20 15 10 Annual growth rates of gross value added of agriculture and animal husbandary (in %) Well-developed basic infrastructure. 5 Four agriculture universities and a chain of agriculture research institutions. 0-5 1999-2000 2001-2002 2002-2003 2004-2005 2005-2006 Vibrant crop-based farmer organisations like Mahagrape, Maha mango, etc. Predominance of cash crops in irrigated areas. -10-15 -20 2000-2001 2003-04 More than 1.3 million hectares under fruit cultivation. Source: Economic Survey of Maharashtra 2008 09, page 124 49

BUSINESS OPPORTUNITIES Thrust areas of the state agro and food processing (3/4) Agro and food processing Maharashtra is one of the largest producers of jowar, tur, cotton, onion, cashew nut, grapes, bananas, oranges, pomegranate and long-stem cut flowers. It is the second-largest producer of soya bean and sugarcane. Apart from 16 major fruit crops, spices, medicinal and aromatic plant plantations have also been set up. Cotton Sugarcane Rice Mango Jowar Coconut Orange Wheat 50

BUSINESS OPPORTUNITIES Thrust areas of the state agro and food processing (4/4) Maharashtra s position vis-à-vis various crops in 2007 08 Crop/crop group Per cent share Position in India Pulses 20.46 First Coarse cereals 17.40 Second Sunflower 13.70 Third Sugarcane 25.40 Second Soya bean 36.28 Second Cotton 27.13 Second Source: Union Budget and Economic Survey, Ministry of Finance, GoI, http://indiabudget.nic.in/, accessed on September 20, 2009 51

BUSINESS OPPORTUNITIES Media and entertainment hub of the country (1/2) Media and entertainment Mumbai is the nerve centre of the Indian film, media and entertainment industry. Mumbai is also the celluloid capital of India. The city is home to the country's first I-MAX dome theatre as well as cinema multiplex. The city has famous film studios such as Film City in Goregaon, Natraj in Andheri and RK Studio in Chembur. Maharashtra is also home to the famous Film and Televsion Institute of India (FTII) in Pune. Established in 1960, the FTII is one of the oldest and best institutes in the field of film making and television programme production. The Hindi film industry is worth nearly US$ 1.22 billion and presents a huge investment opportunity in several areas such as film production, studios (indoor and outdoor), music recording, editing, choreography, etc. 52

BUSINESS OPPORTUNITIES Media and entertainment hub of the country (2/2) Enabling factors In 2001, the state government announced an entertainment tax waiver policy, under which the tax was not levied on new multiplexes in Maharashtra for the first three years of their operations. Further, 75 per cent of the entertainment tax for the following two years has also been waived as per the policy. Films produced in 2006 (based out of Mumbai, Maharashtra) Hindi 223 Tourism Marathi 73 Bhojpuri 76 The Maharashtra Tourism Development Corporation (MTDC) recorded a 100 per cent increase in revenues from US$ 0.86 million in 2005 to US$ 1.45 million in 2006 07. MTDC is working on innovative schemes to tap the tourism potential of the state to the fullest; the response to the bed and breakfast scheme has been good. 53

KEY PLAYERS Key players Reliance Industries Ltd It is India's largest business house with total revenues of US$ 34.7 billion and exports worth US$ 21 billion in 2007 08. The group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers and intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. The group has emerged as India's largest wealth creator in the private sector. The group has its corporate headquarters at Mumbai. ICICI Bank ICICI Bank was formerly the Industrial Credit and Investment Corporation of India. ICICI Bank is India's largest private sector bank in market capitalisation and second-largest overall in terms of assets. The bank has total assets of about US$ 77 billion (June 2009), a network of over 1,500 branches and offices, about 4,800 ATMs and 24 million customers. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries. It also affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank is headquartered at Mumbai. 55

KEY PLAYERS Key players Bharat Petroleum Bharat Petroleum Corporation Ltd (BPCL) was established in 1976 with the nationalisation of the Burmah Shell Group of Companies by the Indian government. It is one of India's largest public sector unit (PSU) companies, involved in the refining and retailing of petroleum products. The PSU s revenues stood at US$ 31.6 billion in March 2009. BPCL sells its products through a network of 8,402 retail outlets and 2,117 liquified petroleum gas (LPG) distributors across India. BPCL's refinery 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 flexible refineries in the country. Larsen & Toubro Larsen & Toubro (L&T) is India's largest engineering and construction conglomerate. Founded in 1938, the company is headquartered in Mumbai. The company had a revenue of US$ 7.4 billion in 2008 09 and about 35,000 employees in 2007. It generates almost 85 per cent of its revenue from the construction business. L&T's in-house capabilities in technology development are complemented by tie ups with world leaders. The company has the infrastructure for its global operations with office locations in the US, Europe, the Middle East and Japan. 56

KEY PLAYERS Key players Hindustan Unilever Limited Hindustan Unilever Limited (HUL), formerly Hindustan Lever Limited, is India's largest consumer products company and was established in 1933 as Lever Brothers India Limited. With over 15,000 employees, it is currently headquartered in Mumbai. The company has leadership in the home and personal care products section, and in foods and beverages. HUL's brands are spread across 20 distinct consumer categories. It achieved a scale of combined volumes of about 4 million tonnes and sales of US$4.5 million in over the period January 2008 to March 2009. HUL products are manufactured in 80 factories. The operations involve more than 2,000 suppliers and associates. 57 Godrej Group The Godrej Group, headquartered in Mumbai, was founded by Ardeshir and Pirojsha Godrej in 1897. The group is one of the largest industrial groups in India, involved in businesses such as appliances, precision equipment, machine tools, furniture, office equipment, food processing, security, materials handling and industrial storage solutions, construction and information technology. The group s revenue was approximately US$ 1.875 billion in 2007 08. The group operates across India and its products are exported to more than 40 countries. The group can broadly be divided into two major holding companies that work independently Godrej Industries Ltd and Godrej & Boyce Mfg. Co. Ltd.

KEY PLAYERS Key players Mahindra & Mahindra Ltd Mahindra & Mahindra Limited (M&M), the Mumbaiheadquartered flagship company of the Mahindra Group, was set up in 1945. It is a US$ 4.5 billion conglomerate (December 2008) and has a leadership position in the Indian automotive sector. M&M is present in the automotive sector, the farm equipment sector, and the systems and technologies sector. It is the leading manufacturer of multi-utility vehicles (MUV) and tractors in India. By 2005, M&M had become the largest producer of MUVs in India. The company recently started a separate unit, the 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), Mumbai-based 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 2004. The company is the only cement company to get the Superbrand status in India. It also provides consultancy services in the areas of project engineering, geological investigation and environment management. 58

KEY PLAYERS Key players Bajaj Auto Ltd Bajaj Auto is India s leading two-wheeler manufacturer. Founded in 1945, the company has 10,250 employees (2006 07) and a revenue of US$ 1.82 billion (March 2009). Bajaj Auto makes five kinds of motorcycles, two kinds of scooters and eight kinds of three wheelers. Based in Pune, the company has three plants in Maharashtra, at Akurdi, Waluj and Chakan. The company has a technical tie-up with Kawasaki Heavy Industries of Japan to produce a range of the latest, stateof-the-art two-wheelers in India. Bharat Forge Ltd (BFL) Bharat Forge Ltd (BFL), founded in 1961, is the world's second-largest forging company and the largest in Asia. The company, based in Pune, has nine manufacturing plants in India and is a market leader in forged and machined autocomponent manufacturing and exports. In 2008 09, BFL recorded sales of US$ 459 million. BFL has manufacturing facilities at nine locations spread over six countries India, Germany, Sweden, Scotland, North America and China. The company's international operations are carried out by its subsidiary Carl Dan Peddinghus GmbH. It is planning to open assembly plants in Brazil and Indonesia to enhance its overseas presence. 59

KEY PLAYERS Key players Kirloskar Group The Kirloskar Group, founded in 1888, is one of India's largest engineering and construction conglomerates. The group produces pumps, engines, compressors, lathes and electrical equipment such as motors, transformers and generators; it is the world s largest genset manufacturer. The group s products are exported to more than 70 countries. Tata Chemicals Tata Chemicals Ltd is a Tata Group Company (India) that is headquartered at Mumbai. The company was a pioneer in the branded, iodised salt segment. It employs 4,900 people and had an annual turnover of US$ 1.8 billion in 2008 09. The various products manufactured by Tata Chemicals find applications in agriculture, animal nutrition, construction, food products, glass, metals, pharmaceuticals, safety and environment, soaps and detergents, textiles and leather. The company manufactures about 34 per cent of the country's soda ash. 60

KEY PLAYERS Key players Essel Group The Essel Group is one of India s prominent business houses with a diverse portfolio of businesses in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Essel, a Mumbai-based company, was started in 1976 with the commodity trading and export firm, Rama Associates Limited. Jet Airways Jet Airways, a Mumbai-based company, started commercial airline operations in May 1993. The airline, India s largest private sector airline, operates more than 380 flights daily across 63 destinations within India and to 20 international destinations. In April 2007, Jet Airways bought out Air Sahara for US$ 340 million. The deal has given the airline a combined domestic market share of about 32 per cent. The company has a fleet size of approximately 84 aircraft and a staff strength of 10,017 people. 61

KEY PLAYERS Key players Pantaloon Retail (India) Limited Pantaloon Retail, the flagship company of the Future Group, is India s leading retailer that operates multiple retail formats in both the value and lifestyle segments of the Indian consumer market. Headquartered in Mumbai, the group operates over 12 million sq ft of retail space, has over 1,000 stores across 71 cities in India and employs over 30,000 people. The company s leading formats include Pantaloons, a chain of fashion outlets; Big Bazaar, a uniquely Indian hypermarket chain; Food Bazaar, a supermarket chain; and Central, a chain of seamless destination malls. Indian Hotels Company The Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, recognised as one of Asia's largest and finest hotel companies. The company opened its first property, The Taj Mahal Palace Hotel, Bombay, in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. The company comprises 59 hotels at 40 locations across India and 17 international hotels in the Maldives, Mauritius, Malaysia, the UK, the US, Bhutan, Sri Lanka, Africa, the Middle East and Australia. The company is grouped into the luxury, leisure and business categories to provide consistency and standardisation across different hotels. 62

KEY PLAYERS Key players Pfizer It is one of the fastest growing global pharmaceutical companies in India. Headquartered in Mumbai, Pfizer Limited (India) has a turnover of US$ 135.24 million (November 2008) and a staff strength of more than 2,300 employees. Pfizer has made clinical research investments of US$ 5.66 million in India. Seven Pfizer brands feature among the Top-100 pharmaceutical brands in India. Pfizer s plant at Thane, near Mumbai, has won a number of national safety awards. Pfizer Inc.'s India unit sold Johnson & Johnson's local arm the exclusive license for trademarks related to the cough syrups Benadryl and Benylin, anti-allergic lotion Caladryl and Listerine mouthwash, as well as other assets for US$ 52 million in early 2008. Nicholas Piramal India Limited (NPIL) NPIL is the flagship company of the US$ 500 million Piramal Enterprises (PEL). Headquartered in Mumbai, it came into existence in 1988 when it acquired Nicholas Laboratories from Sara Lee. The company is India's second-largest pharmaceutical healthcare company. NPIL has a 2,700-strong field force and, with its joint ventures with several companies, 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. Piramal Healthcare recorded a consolidated revenue of US$ 499 million for 2008 09. 63

KEY PLAYERS Key players 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 first 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 such as Adobe Systems, Retail Pro, Microsoft Corporation, Mercury Interactive Corporation, Web Health Systems Ltd and IBM. 64

DOING BUSINESS IN MAHARASHTRA Key approvals required (1/2) List of approvals and clearances required Prior to setting up the unit Registration Allotment of land/shed Permission for land use No objection certificate under the Water Act, 1974 and the Air Act, 1981 Approval for construction activity and building plan No objection certificate Provisional trade tax registrations Registration under Central Sales Tax Act, 1956 Before commencement of production No objection certificate under the Water Act, 1974 and the Air Act, 1981 No objection certificate Permanent trade tax registration under Central Sales Tax Act, 1956 Registration under Central Sales Tax Act, 1956 After commencement of production/activity Registration Departments to be consulted Development authority Development authority Industrial development authorities Pollution control board Development authority Fire department Central and state excise departments Central and state excise departments Pollution control board Fire department Central and state excise departments Central and state excise departments Industries department 66

DOING BUSINESS IN MAHARASHTRA Overall business climate (1/2) Skilled manpower High literacy rate of 77 per cent Robust infrastructure Network of educational institutions 12 per cent of country s universities 17 per cent of medical colleges Skilled manpower Key growth drivers Conducive business environment 13 per cent of engineering colleges (344) 19 per cent of management institutions Strong services sector Strong industrial base 169,000 technocrats every year Source: Economic survey of Maharashtra 2008-2009, p. 117. 67

MAHARASHTRA. September 2009