TELANGANA THE 29 th STATE OF INDIA

(As of 23 June 2017) 1

Executive Summary... 3 Advantage State......... 4 Telangana Vision....... 5 Telangana An Introduction..... 6 Budget 2016-17.. 18 Infrastructure Status.... 19 Business Opportunities.. 38 Doing Business in Telangana......52 State Act & Policies.53 2

EXECUTIVE SUMMARY Economic growth driven by service sector At current prices, Telangana s GSDP was estimated at US$ 89.10 billion during 2015-16. Services sector is the major contributor in the GSDP of Telangana. Hyderabad The IT hub of the state Hyderabad is the major IT hub of the state across the country. During 2015-16, the value of IT exports from the state of Telangana was recorded at US$ 10.42 billion. The launch of T-Hub in November 2015 has created most energetic community of entrepreneurs across the world for boosting the success stories of the start-ups in India. Growth in annual budget In 2016-17, the overall planned and non-planned allocation for various sectors of the state amounted to US$ 19.92 billion. Promoting tourism & historical past In 2014-15, Telangana Samskruthika Sarathi, a distinct state level body was created to generate awareness about the cultural heritage of Telangana and provide information regarding the various policies and schemes of the Government of Telangana. Source: Telangana State Statistical Year book,2015 3

ADVANTAGE: TELANGANA June 2016 Installed power capacity: 11,568.76 MW Growing economy demandand improving infrastructure Telangana s GSDP grew at a CAGR of 13.76% between 2005-06 and 2015-16. The state government plans to build more airports in the state to improve connectivity. Rich labour pool Majority of the prominent educational universities and institutions Telangana are located in Hyderabad. These institutions provides a massive pool of labour which acts as a catalyst in the development of the state. The state government has announced scholarships to attract more youth to these institutions. 2018 Installed power capacity: 23,675 MW Availability of readymade capital Telangana accounts for easy access to capital along with infrastructure which is benefiting the state. Majority of the multinational companies holds production base in Hyderabad. Information technology and pharmaceutical sectors are the fastest growing sector of the state and driving the economic development of Telangana. Advantage Telangana Policy and institutional support Under the Department of Information Technology, Electronics & Communications, the Government of Telangana introduced three new policies in 2016, namely, Telangana IT Policy, 2016, Telangana Electronics Policy, 2016 and Telangana Innovation Policy, 2016. Source: Telangana State Statistical Year Book, 2015 GSDP: Gross State Domestic Product 4

TELANGANA VISION To develop Hyderabad as a slum free city. Effective implementation of welfare schemes. In next three years, Telangana is expected to be developed as a power surplus state Plans to announce industrial policy to encourage investments in state. Setting up of faster clearances, a single window system. Waiver of agricultural loans up to Rs 1 lakh. Technological advancement in agriculture Government to encourage research in agricultural universities. Promoting investments Agriculture Quality of life of people Promoting research Vision Power Infrastructure Governance Law & order Ensure people centric, transparent and corruption free development. To take steps to eradicate corruption. No negotiation on maintaining law & order in the state. Encouraging people friendly police officials. Installing CCTV cameras for better vigilance. Aim to make Telangana the Seed Bowl of India. Telangana is highly suitable for the growth of seeds. Endorsing greenhouse technology and pilot projects. Hyderabad to have most advanced infrastructure facilities. To have two new airports in Hyderabad, near Shamirpet, Jawaharnagar and Ghatkesar. Source: Telangana Government 5

TELANGANA FACT FILE Mahaboobnagar, Ranga Reddy, Hyderabad, Medak, Nizamabad, Adilabad, Karimnagar, Warangal, Khammam and Nalgonda are the 10 districts of Telangana. Hyderabad, Secunderabad and Warangal are the key cities in the state. Source: Maps of India In June 2014, Telangana was introduced as the 29th state of the India, Hyderabad is the capital of the state. Telangana is surrounded by Andhra Pradesh from the south and east end, Maharashtra and Karnataka from the west, and Odisha and Chhattisgarh from the north end. Telugu is the generally spoken language in the state. Hindi, Urdu and English are also usually spoken. Parameters Capital Telangana Hyderabad Geographical area (sq km) 114,840 Administrative districts (No) 10 Population density (persons per sq km) 312 Total population (million) 35.2 Male population (million) 17.7 Female population (million) 17.5 Sex ratio (females per 1,000 males) 988 Literacy rate (%) 66.5 Source: Population Census 2011, Telangana State Statistical Abstract, May 2015 6

TELANGANA IN FIGURES (1/2) Parameter Telangana All states Source Economy 2015-16 2015-16 GSDP as a percentage of all state s GSDP 4.30 100.0 GSDP growth rate (%) 11.71 8.71 Per capita GSDP (US$) 2,530.7 1546 Directorate of Economics & Statistics of Telangana, Central Statistics Office Directorate of Economics & Statistics of Telangana, Central Statistics Office Directorate of Economics & Statistics of Telangana, Central Statistics Office Physical Infrastructure Installed power capacity (MW) 11,501.28 326,848.53 Central Electricity Authority, as of March 2017 Wireless subscribers (No) 84,239,144 1 1,164,200,000 Telecom Regulatory Authority of India, as of February 2017 National Highway length (km) 2,635.84 100,087.08 NHAI & Roads and Building Department Airports (No) 1 2 125 Airports Authority of India 1 For undivided State 2 International operational airport 7

TELANGANA IN FIGURES (2/2) Parameter Telangana All states Source Social Indicators Literacy rate (%) 66.5 73.0 Census 2011 Birth rate (per 1,000 population) 17.5 21.6 SRS Bulletin Investment FDI equity inflows (US$ billion) 13.76 1 332.11 Department of Industrial Policy & Promotion, from April 2000 to March 2017 Industrial Infrastructure PPP projects Completed & Operational (No) 13 1,246 Operational SEZs (No) 26 186 DEA, Ministry of Finance, Government of India, as of July 2016 Ministry of Commerce & Industry, Department of Commerce, as of July 2016 1 Including Andhra Pradesh, PPP: Public-Private Partnership, SEZ: Special Economic Zone, SRS: Sample Registration System 8

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 TELANGANA THE 29 th STATE OF INDIA ECONOMIC SNAPSHOT GSDP At current prices, Telangana s GSDP stood at US$ 97.3 billion in 2016-17. GSDP of Telangana at current prices (in US$ billion) Between 2005-06 and 2016-17, GSDP of the state grew at a CAGR of 13.34%. 89.10 97.3 24.5 28.1 37.9 41.0 42.9 57.8 65.2 63.9 65.0 71.1 Source: Directorate of Economics & Statistics of Telangana, Central Statistics Office GSDP* - Socio Economic Outlook 2016 9

ECONOMIC SNAPSHOT NSDP At current prices, Telangana s net state domestic product (NSDP) was estimated at US$ 88.34 billion in 2016-17. NSDP of Telangana at current prices (in US$ billion) Between 2005-06 and 2016-17, the average annual NSDP growth rate was about 13.57%. 88.34 81.13 51.5 56.8 56.3 57.4 62.7 21.8 24.9 33.6 36.7 38.1 Source: Directorate of Economics & Statistics of Telangana, Central Statistics Office, Socio Economic Outlook 2016 10

ECONOMIC SNAPSHOT PER CAPITA GSDP Telangana s per capita GSDP^ increased to US$ 2,763.6 during 2016-17 from US$ 657 in 2005-06. GSDP per capita of Telangana at current prices (in US$) Average per capita GSDP rose at a CAGR of 13.95% between 2005-06 and 2016-17. 2531 2763.6 657 739 985 1064 1096 1468 1602 1568 1582 1714 Source: Directorate of Economics & Statistics of Telangana, Central Statistics Office Per Capita GSDP^ - calculated using GSDP million US$ / Population in million 11

ECONOMIC SNAPSHOT PER CAPITA NSDP Telangana s per capita NSDP grew from US$ 584 during 2005-06 to US$ 2,379.06 over 2016-17. NSDP per capita of Telangana at current prices (in US$) Average per capita NSDP increased at a CAGR of 13.62% between 2005-06 and 2016-17. 2185 2379.06 584 655 873 951 972 1306 1397 1382 1397 1512 Source: Directorate of Economics & Statistics of Telangana, Central Statistics Office, Socio Economic Outlook 2016 12

ECONOMIC SNAPSHOT PERCENTAGE DISTRIBUTION OF GSDP At a CAGR of 19.08%, services has been the fastest growing sector among agriculture, industry and services from 2004-05 to 2015-16. Percentage distribution of GSDP (Current prices) The industry sector increased at a CAGR of 14.13% between 2004-05 and 2015-16, followed by agriculture (CAGR of 17.44%). In 2015-16, the services sector contributed 61.90% to the state s GSDP at current prices. It was followed by the industry sector (20.40%) and agriculture sector (17.70%). 53.81% 28.28% CAGR 19.08% 14.13% 61.90% 20.40% 17.44% 17.91% 17.70% 2004-05 2015-16 Primary Sector Secondary Sector Tertiary Sector Source: Directorate of Economics & Statistics of Telangana, Central Statistics Office Sector-wise %share of GSDP µ -Geometric mean of YoY calculation from 2004-05 to 2014-15 13

ECONOMIC SNAPSHOT AGRICULTURAL PRODUCTION Crop Annual Area ( 000 hectare) Annual Production ( 000 tones) 2014-15 2015-16 2014-15 2015-16 Rice 1,415 951 4,545 2,979 Cereals & millets Annual area & production of key crops 2205 1591 6955 4685 Pulses 408 455 263 250 Fruits 2613 2046 7218 4935 Cotton 1693 1778 3583 3608 Production of horticulture crops (million MT) 5.28 4.07 Production of Fruits 2.84 2.66 Production of Vegetables 2014-15 2015-16 9.14 7.46 Production of Plantation Crops Telangana is primarily a rain fed state & experiences irregular distribution of rain. During 2015-16, 5.56 lakh hectare of area was under cultivation of maize, whereas pulses were cultivated over an area of 4.55 lakh hectare, in the state. Thus, after the divergence, the state is expected to grasp a leading position in the production of pulses & coarse grains. As per state budget 2016-17, 2 waiver instalments out of 4 have been deposited into the bank accounts whereas the 3 rd instalment is expected to be unconfined during 2016-17. The state government has proposed an amount of US$ 1.03 billion for the departments of Agriculture & Cooperation & Marketing. Source: Telangana Socio Economic Outlook 2016, Telangana State Budget 2016-17, 14

ECONOMIC SNAPSHOT INVESTMENTS & EXPORTS In June, 2015, the Government of Telangana introduced a new industrial policy to attract domestic as well as international investments in the industrial sector of the state, with emphasis on core manufacturing sectors. Investment intentions in terms of IEMs filed, LOIs/DILs issued in Telangana 3,294.06 Additionally, a legal framework has been provided in the policy to make the existing industries more competitive, which is expected to boost the quality of goods manufactured in the state. Telangana is one of the leading exporters of IT services in India. In 2016-17, the overall IT exports from Telangana were valued at US$ 12.71 billion. According to the Department of Industrial Policy & Promotion (DIPP), cumulative FDI inflows (2) in Telangana from April 2000 to March 2017, totaled US$ 13.76 billion. In January 2017, the state government signed MOUs for several investments and strategic partnerships, worth US$ 503.04 million. The investment also includes setting up of Life Sciences Infrastructure Fund in the state. 2,267.90 2,090.90 1,822.20 1,307.60 1,032.70 1,591.43 176 132 132 134 117 145 139 2010 2011 2012 2013 2014 2015 2016 2017 Number of Investment Intentions Proposed Investments (US$ Million) Source: Department of Industrial Policy & Promotion, Government of India Ministry of Commerce & Industry, Government of India (1) As of January 2017 (2) Including Andhra Pradesh IEMs Industrial Entrepreneur Memoranda LOIs Letters of Intent DILs Direct Industrial Licences 5 13.23 15

ECONOMIC SNAPSHOT IRRIGATION...(1/2) The major sources for water for irrigation purpose in the state are Godavari and Krishna Rivers & branches. Telangana also uses water from tanks & ponds for irrigation. During 2015-16, share of Telangana in the water of Godavari & Krishna was recorded to be 1,250 thousand million cubic feet. Further, the state also has a share of 150 thousand million cubic feet in the surplus water. Moreover, Telangana s Chief Minister accomplished an understanding with Maharashtra s Chief Minister for fulfilling the projects which are estimated to be developed over Pranahita, Godavari & Penganga rivers. In addition to these new projects, the state government is also trying to finish the major & medium projects, which are under process in the state. In Telangana, every year around 9,000 tanks are being taken up for their restoration & during 2015-16, the restoration of the tanks was done with the people s active participation. Moreover, the phase-ii of restoration is expected to be initiated within coming years. The state government has proposed an amount of US$ 3.82 million for the construction of the above mentioned projects & for the fulfilment of Mission Kakatiya during 2016-17. Irrigation projects status (as of October 2015) Major irrigation projects Numbers Completed 8 Ongoing 17 Medium irrigation projects Numbers Completed 34 Ongoing 9 Gross Irrigated Area, Net Irrigated Area ( 000 ha) 2014-15 2015-16 (Kharif) Gross Irrigated Area 2,529 1,324 Net Irrigated Area 1,726 1,313 Irrigation Intensity 2014-15 1.47 2015-16 (Kharif) 1.01 Source: Irrigation and CAD Department, Government of Telangana 16

ECONOMIC SNAPSHOT IRRIGATION.(2/2) Major & Minor Irrigation Schemes and Projects being planned by Telangana Schemes and Projects Salient features To make available drinking water to Hyderabad from Krishna river Palamuru-Ranga Reddy Lift Irrigation Scheme Irrigation of 7 lakh acres in Mahabubnagar, 2.7 lakh acres in Ranga Reddy and 0.3 lakh acres in Nalgonda districts. This can be done by the lifting of 70 thousand million cubic feet of water from the Krishna River. Nakkalagandi Project With an aim to irrigate area of 3.41 lakh acres in Nalgonda and Mahabubnagar districts as these districts are affected by fluoride and drought conditions. Irrigation sector investment - 2015-16 (US$ million) Projects Investment Major irrigation 946.26 Medium irrigation 37.74 Minor irrigation (PWD) 295.81 State Irrigation Development Corporation 49.77 Commissioner, CAD-EAP 12.24 Irrigation sector investment- 2015-16 (US$ million) Projects Investment Ground Water Department 0.90 Command area development 6.57 Flood control and drainage 59.61 Source: Telangana State Portal 17

BUDGET 2016-17 In 2016-17, the overall planned and non-planned allocation amounted to US$ 19.92 billion for various sectors of Telangana. The allocation of funds was about 3.80% higher in comparison with the 2015-16 budget. Annual Budget (Estimates in US$ million) Sector 2016-17 Agriculture and allied services 1,032.54 Rural development 1,639.32 Irrigation 3,819.13 Roads & Buildings 578.98 Industries 147.72 Education 1,640.39 Information Technology & Communication 38.80 YA,T&C Department 35.44 Health 911.55 In the state budget for 2016-17, planned allocation amounted to US$ 10.33 billion while non-planned allocation amounted to US$ 9.59 billion. Source: Telangana State Portal, Department of Finance 18

PHYSICAL INFRASTRUCTURE ROADS Source: Maps of India Road type Road length (km) National highways 2,635.84 State highways 3,512 Major district roads 12,079 Other district roads 9,014 Total 27,240.84 Telangana is surrounded by Andhra Pradesh from the south and east end, Maharashtra and Karnataka from the west, and Odisha and Chhattisgarh from the north end. As of June 2015, state was home to 16 national highways with total length of 2,592 km. The overall road length for Telangana state was around 27,240.84 km as of 2015-16. Of the total road length in the state, 17,076 km of roads are of single lane, 772 km are of intermediate lane, 7,357 km are of double lane and the remaining are of 4-lane and above. In order to fulfil the purpose of laying double lane and four lane roads from Mandal headquarters to district headquarters and for linking every headquarter to Hyderabad, the department of R&D commenced construction of 2,570 km long new roads in a phased manner during 2015-16. Moreover, the state government has also undertaken various steps for renovation and repairing of about 4,000 km roads in the state. Further, for the upliftment of roads and bridges, the Government of Telangana has proposed an amount of US$ 509.16 million. In December 2016, the central government approved five road projects worth US$ 1.18 billion. In April 2017, the Ministry of Road Transport and Highways has approved the project for the development of 14 roads with a total length of 570 Km for a cost of US$ 537.50 millon. Source: Roads & Buildings Department, Government of Telangana, Budget 2016-17 19

PHYSICAL INFRASTRUCTURE RAILWAYS Telangana is well-connected to other parts of the country through the rail network. During 2014-15, the state had a railway network of 1,753 km having 228 railway stations. As per the state annual plan, the Government is planning to build rapid rail connectivity in the state. The rapid rail line will connect the capital of Telangana to the new capital of Andhra Pradesh. For construction of new railway lines in the state, the government proposed an investment of US$ 7.08 million in 2015-16. The metro rail project of the state is expected to be completed by July 2017, and as per the budget 2016-17, completion of this metro rail and other strategic plans in the state would help in minimizing traffic congestion across the state. Hyderabad Metro Rail project is being implemented through public private partnership (PPP) mode. Investment of US$ 2.1 billion has been approved by private partners and as of August 2015, combined viability gap funding (VGF) worth US$ 0.24 billion was approved by the central and state governments for the state. The two stretches of Hyderabad Metro Rail Ltd i.e. Miyapur- SR Nagar (11 km in corridor-i) and Nagole-Begumpet (16 km in corridor-iii) sections are expected to get completed by the end of 2017. Source: Maps of India Source: Telangana State Statistical Yearbook 2015, News articles 20

PHYSICAL INFRASTRUCTURE AIRPORTS (1/2) Telangana has one operating airport, Rajiv Gandhi International Airport (RGIA), Shamshabad owned and operated by International Airport Limited. Rajiv Gandhi Hyderabad International Airport Limited (RGHIAL) is a joint venture. The airport is sponsored by GMR Group, Malaysia Airports Holding Berhad (MAHB), State Government and the Airports Authority of India with shares of 63%,11%,13% and 13% respectively. The airport has two prime access points, one is the National Highway NH-7 and another one is Outer Ring Road (ORR) (western side) and Srisailam State Highway (eastern side). Warangal Airport is a non-operational airport built over an area of 748.02 acres. In order to improve the civil aviation sector, the state government proposed an investment of US$ 3.30 million in 2015-16. The Government of Telangana sanctioned an amount of US$ 0.95 million to the Telangana Aviation Corporation. An amount of US$ 138.52 thousand and US$ 1.65 thousand has been approved by the Government of Telangana for the development of Hyderabad airport and regional airport, respectively. For the development of Warangal airport, the government proposed an investment of US$ 165.89 thousand during 2015-16. Source: Telangana State Statistical Yearbook 2015, State Budget 2016-17 21

PHYSICAL INFRASTRUCTURE AIRPORTS (2/2) Hyderabad aircraft movement (nos.) Hyderabad passenger traffic (million) 80,016 82,658 99,013 90,151 87,741 94,057 1,05,772 6.51 7.60 8.44 8.30 8.65 10.40 12.38 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Source: Airport Authority of India During 2015-16, Hyderabad airport handled 110,033 tonnes of freight. In March 2016, the volume of freight handled at the airport stood at 9,876 tonnes. 22

PHYSICAL INFRASTRUCTURE POWER TSERC is the prime authority for power generation in Telangana. Telangana Power Generation Corporation Limited (TSGENCO) and Transmission Corporation of Telangana Limited (TSTRANCO) are the generation and transmission entities of the state. As of March 2017, the total installed power capacity of Telangana state was 11,501.28 MW. Out of this, 6,389.10 MW was contributed by state utilities, 3085.33 MW by private utilities and 2,026.85 MW by central utilities. Thermal power was the largest contributor in the state s total installed capacity with 7,500.07 MW, followed by hydropower with a contribution of 2,306.60 MW, renewable energy with 1,545.88 MW and nuclear power with 148.73 MW. The Government of Telangana is planning to increase the installed power capacity of the state to 23,912 MW by 2019. The state holds two power distribution companies which are Southern Power Distribution Company of Telangana State Limited (TSSPDCL) and Northern Power Distribution Company of Telangana Limited (TSNPDCL). Various new power projects have been taken up in the state during 2015-16, which include Pulichintala, Bhadadri Thermal Power Station, Lower Jurala, Yadadri Thermal Power Station as well as Kothagudem Thermal Power Station. These projects have a capacity of 6,160 MW, collectively. Further, in order to set up thermal power plants of 6,000 MW capacity across the state, the state government signed a MoU with Bharat Heavy Electricals, Ltd. during 2015-16. Per capita power consumption by district (all categories) (KWh) Medak Nalgonda Hyderabad Ranga Reddy Mahaboobnagar Karimnagar Warangal Nizamabad Khammam Adilabad 929 716 682 749 554 503 1,439 1,342 1,307 1,209 0 500 1000 1500 2000 BHEL (Bharat Heavy Electricals Ltd) started the first unit of 4x30MW Pulichintala hydroelectric project in Telangana, on December 2, 2016. In April 2017, ReNew Power, an Indian renewable independent power producer, commissioned the construction of the largest PV plant in Telangana with a capacity of 143MW In May 2017, Bharat Heavy Electricals (BHEL) bagged a project worth US$ 34.65 million for a steam and power generation package from Ramagundam Fertilizers and Chemicals Ltd (RFCL). Source: Central Electricity Authority, State Budget 2016-17, State Portal 23

KEY PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS (1/2) Project name Sector Type of PPP Hyderabad Multi-Modal Suburban Transportation Project - Phase II Roadways between Hyderabad - Bangalore Section Road Upgradation (Kadtal-Armur NH-7) Project Road Upgradation (Islam Nagar-Kadtal NH-7) Project Road Upgradation (Armur-Adloor Yellareddy) Project Municipal Solid Waste to Energy in Hyderabad (Hyderabad, Gadamaguda, R.R.District) Municipal Solid Waste to Energy in Hyderabad Integrated Solid Waste Management (3800 TPD) for Hyderabad Hyderabad-Yadgiri Four-Lane NH-202 Road Project Hyderabad International Airport Railway track, tunnel, viaducts, bridges Build-Own-Operate-Transfer (BOOT) Project cost (US$ million) 58.7 Roads and bridges Build-Operate-Transfer (BOT) 103.9 Roads and bridges Roads and bridges Build-Operate-Transfer (BOT) Annuity Build-Operate-Transfer (BOT) Annuity Stage Under Construction Under Construction 42.0 Operational 79.2 Operational Roads and bridges Build-Operate-Transfer (BOT) 58.3 Operational Solid waste management Solid waste management Solid waste management Roads and bridges Airports Build-Own-Operate-Transfer (BOOT) Build-Own-Operate-Transfer (BOOT) Design-Build-Finance-Operate- Transfer (DBFOT) Design-Build-Finance-Operate- Transfer (DBFOT) Build-Own-Operate-Transfer (BOOT) 13.0 Operational 5.2 Operational 137.0 Under Construction 68.4 Operational 378.6 Operational Source: Ministry of Commerce & Industry, Department of Commerce NA Not Available 24

KEY PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS (2/2) Project name Sector Type of PPP Project cost (US$ million) Three Star Hotel at Madhapur, Hyderabad Tourism Build-Operate-Transfer (BOT) 0.8 Multiplex & Shopping Mall at Secunderabad Tourism Build-Operate-Transfer (BOT) 4.1 HITEC City Cyberabad Hyderabad Common infrastructure for industrial parks, SEZ Stage Under Construction Under Construction Not Available 68.7 Operational Golf Course At Naya Quilla Hyderabad Tourism Build-Operate-Transfer (BOT) 1.9 Food Courts Project at Lower Tankbund Road Hyderabad Tourism Build-Operate-Transfer (BOT) 1.1 Under Construction Under Construction Source: Ministry of Commerce & Industry, Department of Commerce 25

DEVELOPMENT PROJECTS: SEZs (1/2) For the supervision & execution of SEZs in the state, Telangana State Industrial Infrastructure Corporation is the concerned authority. During 2015-16, a SEZ has been developed in Madikonda village of Warangal district. IT/ITeS, formulation, biotech & aerospace are the major sectors where SEZs are operating. In February 2016, Cognizant Technologies Services Pvt Ltd sought government approval to set up a special economic zone (SEZ) in Telangana. Cognizant has proposed to set up an IT/ITeS SEZ in Ranga Reddy district of Telangana, over an area of 2.51 hectares. As of July 2016, Telangana had 123 SEZs; of which, 26 are operational, 44 are notified & 53 are formally approved. Sector-wise operational SEZs in Telangana (2015-16) 1 1 1 1 1 1 20 IT/ITES Biotech Gems & Jewellery Aviation Sector Semiconductors Aerospace Engineering Industries Pharmaceuticals As of 10 th May, 2016, the total utilised area of notified SEZs in Telangana stood at 1,957.22 hectares. Source: Ministry of Commerce & Industry, Government of India 26

DEVELOPMENT PROJECTS: SEZs (2/2) Industry IT/ITeS Sector-wise Operational SEZs in Telangana Name of SEZs DivyaSree NSL Infrastructure Private Limited, RR Dist.\ DLF Commercial Developers Ltd Gachibowli, APIIC Ltd Nanakramguda Wipro Limited, Gopannapally Sundew Properties, Madhapur Stargaze Properties Pvt Ltd, RR Dist, Serene Properties, Ghatkesar JT Holdings Pvt Ltd, RR Dist. Divyasree NSL, Raidurga Infosys Limited, Pocharam Tech Mahindra Limited (Satyam Computers), Madhapur, Tech Mahindra Limited (Satyam Computers), Bahadurpally Maytas Enterprises SEZ Pvt Ltd, Gopannpally Indu Techzone Pvt Ltd, Mamidipally Lanco Hills Technology, Manikonda Wipro Limited, Manikonda L&T Phoenix Infoparks, RR Dist Navayuga Legala Estates Pvt Ltd, Serilingampally Tata Consultancy Services Limited, RR Dist. Hill County SEZ Private Limited, Bachupally No of SEZs 20 Sector-wise Operational SEZs in Telangana Industry Name of SEZs No of SEZs Biotechnology APIIC Ltd 1 Gems & jewellery Aviation Semiconductors Aerospace engineering Pharmaceuticals Hyderabad Gems SEZ Ltd, RR Dist M/s GMR Hyderabad Aviation SEZ Limited, Hyderabad FAB City SPV (India) Pvt Ltd, RR Dist M/s. APIIC Ltd., Adibatla, Ibrahim patnam, R.R. Dist, APIIC Pharma SEZ - Jedcherla Source: Ministry of Commerce & Industry, Government of India 1 1 1 1 1 27

PHYSICAL INFRASTRUCTURE TELECOM Telecom infrastructure (As of February 2017) Wireless subscribers 84,239,144 Wire-line subscribers 1,626,397 Tele-density (in%) 96.44 Performance Status of NOFN Project (As of April 2016) No. of GPs in Phase-I 2,097 Pipe laid (km) 4,038 Cabe Laid (km) 3,431 GPs for which cable laid 1,552 No. of GPs lit 106 According to the Telecom Regulatory Authority of India (TRAI), undivided Andhra Pradesh had nearly 84.23 million wireless subscribers and 1.62 million wireline subscribers as of February 2017. As of December 2015, there were 5,780 post offices in the state. Airtel launched 4G services in the states with special focus on Hyderabad. Other players such as BSNL & Aircel are also entering in the 4G business of the state In November 2016, Telangana State Road Transport Corporation, in conjugation with Airtel, announced Wi- Fi services for passengers of metro luxury buses. In December 2016, telecom company Idea announced investment of US$ 14.7 million for developing 4G infrastructure in Telangana. In order to provide broadband services to consumers in the state, Bharat Sanchar Nigam Ltd. (BSNL) is tying up with local cable operators. As of May 2017, the company already tied up with operators in Warangal and Karimnagar. Source: Telecom Regulatory Authority of India, Ministry of Communications & Information Technology Telangana Statistical Yearbook - 2015 28

SOCIAL INFRASTRUCTURE EDUCATION (1/3) Telangana s share in educational institutions includes: 3 central universities located in Hyderabad: University of Hyderabad, English & Foreign Languages University & Maulana Azad National Urdu University. Technological institutes such as IIT, IIIT & NIT. Nalsar Law University, Indian School of Business as well as private institutes such as Symbiosis & TISS are located in the locality of Hyderabad. The Telangana Government has announced fee compensations for students who belong to native & low income backgrounds. During 2015-16, the spend on the fee reimbursement was US$ 125.5 million. In 2015-16, the 3 newly established universities Sri. P.V. Narasimha Rao Telangana State Veterinary University, Sri. Konda Laxman Horticulture University & Prof. Jayashankar Agricultural University have been allocated with an investment budget of US$ 43.5 million. As of March 2017, to create awareness & encourage the students, the state government has decided to give US$2974.86 as incentive to each of those students who have secured admission in the National Defence Academy & have successfully completed their training. As per budget 2016-17, the state government has proposed an amount of US$ 258.78 million under plan & US$ 1.38 billion under the non-plan. Literacy rates (%) Literacy rate 66.5 Male literacy 74.9 Female literacy 57.9 Enrolment of students in Schools (2015-16) Classes Total Pre Primary 94,892 (I-V) 3,246,785 (VI-VIII) 1,758,189 (IX-X) 1,058,284 (XI-XII) 33,721 Source: Central Statistics Office, Budget 2016-17, Telangana Finance Department, News Articles, IIT: Indian Institute of Technology, IIIT: International Institute of Information Technology, NIT: National Institute of Technology, 29

SOCIAL INFRASTRUCTURE EDUCATION (2/3) As per budget 2016-17, the state government set up a total of 70 new English medium residential schools in the state, at an estimated cost of US$ 53.46 million, for minorities, which are expected to be active by 2016-17. For medical education, training & research department, the budget allocation during 2016-17 is expected to be US$ 32.18 million. T-Hub, a start-up incubator launched by the Telangana Government in March 2017, entered into an agreement with Anthill, a Hyderabad-based speed scaling platform for early-growth stage start-ups, to launch an international start-up initiative, the Smart Women Angels Network (SWAN). In May 2017, the state government announced its plan to hire 11,428 Vidya volunteers and 8,792 teachers in the academic year of 2017-18, with an aim to fill the vacant seats for teachers in various schools and universities across the state. In June 2017, the National Institute of Tourism & Hospitality Management (NITHM) signed a Memorandum of Understanding with the Indian Overseas Bank Gachibowli Branch to facilitate education loans to the students, without any guarantee or collateral security. Budget Allocation for Education Sector in 2015-16 US$ million Elementary education 763.35 Secondary education 707.95 Universal and higher education 255.23 Adult education 8.37 Language development 0.69 Technical education 69.14 General 12.09 Total 1,816.81 Source: State Budget 2016-17 30

SOCIAL INFRASTRUCTURE EDUCATION (3/3) Proposed medical colleges in Telangana with investment (US$ million) Construction of medical college and hospital at Nizamabad 15.26 Construction of new nursing college at Adilabad 0.11 Construction of new nursing college at Warangal 0.10 Construction of medical college and chest hospital, Hyderabad 0.06 Construction of nursing college and hostel at Gandhi Hospital Premises, Secunderabad 0.33 Construction of nursing college, Hyderabad 1.38 RIMS medical colleges 1.95 Source: Telangana State Statistical Abstract 31

SOCIAL INFRASTRUCTURE HEALTH (1/2) Out of the country s pharma production, Telangana accounted for onethird share; the state government plans to enhance it further by promoting a pharma city. Some of the initiatives by the state government to promote the healthcare sector are as follows: To double the budget allocation for the healthcare sector from the present 2% & increase public health delivery services. Supporting private players who are willing to invest in the healthcare sector. The government announced investment of US$ 16.58 billion for establishment of super speciality hospitals in the state, till 2019. The upcoming hospitals would be based on the same pattern as Nizam's Institute of Medical Sciences (NIMS) of Hyderabad. In January 2017, Telangana tied up with Cerestra Advisors to set up country s 1st Life Sciences Infra Fund, with a corpus of US$148.74 million. The state government in February 2017, launched an initiative RICH Research & Innovation Circle with an initial investment US$7.43 million to make research establishments such as CCMB, IICT, LV Prasad Eye Institute and ICRISAT. In June 2017, the state government inaugurated the largest dedicated medical devices park of the country. Companies such as Apollo Hospitals, Cyient Ltd. Sandor Medicaids, and 11 other companies have already been allocated 50 acres in the 250-acre park in Sultanpurof Sangareddy district.. Health infrastructure (as of November, 2015) Primary health centres 675 Sub centres 4,863 Community health centres 114 Area hospitals 42 District hospitals 8 Budget allocation for health & family welfare in 2016-17 US$ million Urban Health Services 495.88 Rural Health Services 414.67 Total 910.55 For 2016-17, the state government also proposed to establish 40 diagnostics and 40 dialysis centres in the state. Further, the transmission of Community health centres to Vaidya Vidhana Parishad of Telangana is also expected to be accomplished during 2016-17. Source: Department of Health, Medical & Family Welfare & National Health Mission, Government of Telangana Telangana Budget 2016-17 32

SOCIAL INFRASTRUCTURE HEALTH (2/2) The state government proposed an endowment of US$ 91.65 million for purchase or replacement of equipment, US$ 48.27 million for implementing repair of civil works, purchase of diagnostic equipment, etc. and US$ 24.37 million for buying drugs, disposals and surgical, as per budget 2016-17. Further, an amount of US$ 8.55 million is also projected to be delivered to Medical and Health Department heads for fulfilling the growing needs of the healthcare during 2016-17. In March 2017, Telangana was the best performing state pan India, since the implementation of Mission Indra Dhanush. The mission aims at immunizing infants below two years of age and pregnant women. Distribution of district hospitals, area hospitals & CHCs in Telangana Hyderabad Mehbubnagar Warangal Nalgonda Adilabad Karimnagar Medak Khamman Ranga Reddy Nizamabad Primary hospitals in Telangana, by district 40 0 20 40 60 80 100 52 57 67 72 72 71 75 85 84 Source: Department of Health, Medical & Family Welfare & National Health Mission, Government of Telangana CHC: Community Health Centres 33

The industrial sector accounted for around 24% share in overall GVA of the state during 2015-16. In the state budget 2016-17, the Government of Telangana proposed an investment of US$ 147.72 million for endorsement of various industries in the state. INDUSTRIAL INFRASTRUCTURE.(1/2) Distribution of industrial parks in Telangana The Telangana Government plans to encourage an industrial corridor. This industrial corridor would be in between Hyderabad & Warangal. After this industrial corridor, the employment opportunities are also expected to grow. The Telangana state plans to invest in power plants in a large way to back up its industrial infrastructure. With the launch of the Industrial policy in the state, all clearance certificates are being easily issued to around 1,609 units in the state involving an investment of US$ 5.06 billion. These clearances have generated an employment potential of 120 thousand during 2015-16 in the state. Across 100 approvals from 1,609 units are associated with the medium & large industrial units and have generated the employment potential of around 34 thousand with an investment of US$ 1.29 billion. Further, for establishing three Aerospace parks in the state, the state government has been depicting various proposals out of which the construction work of NIMZ phase-i is projected to be accomplished during 2016-17. CETPs at Jeedimetla and Patancheru and TSDF at Dundigal under Jeedimetla Zone are established by the Government. TSIIC has recognised 150 industrial parks in 10 districts having land of about 74,133.18 acres with 13,165 units (enterprises). Under TSIIC, for the execution and monitoring of Infrastructure projects in the state, the government sanctioned an investment of US$ 1.65 million. Source: Telangana State Statistical Year Book, 2015 CETP- Common Effluent Treatment Plants TSDF- Treatment Storage Disposal Facility TSIIC-Telangana State Industrial Infrastructure Corporation 34

INDUSTRIAL INFRASTRUCTURE.(2/2) Industrial Parks in Telangana Industrial park name No of plots No of sheds Vacant area (sq. m) Proposed industries Jeedimetla 250 0 1,222,765 Automotive based industries, general engineering, steel re rolling, R&D of biotech, pharmaceuticals, vaccines Karimnagar 2 0 2,136 General Patancheru 68 15 345,963 Textile, cargo, edible oils Shamshabad 376 11 2,098,571 Aerospace, solar equipment, electronic hardware Warangal 57 1 101,874 IT & ITeS, general Prime Minister's Employment Generation Programme (PMEGP) schemes in Telangana Year Margin money subsidy released US$ million Margin money subsidy utilised US$ million Number of projects assisted Estimated employment generated (no. of persons) 2014-15 3.17 3.13 604 6,604 2015-16 (1) 2.64 0.29 44 606 Source Telangana State Industrial Infrastructure Corporation (TSIIC) Ministry of Micro, Small and Medium Enterprises (1) As of July, 2015 35

AMRUT & SMART CITIES (1/2) As of June 2015, 5 cities of Telangana namely Hyderabad, Karimnagar, Nalgonda, Nizamabad & Warangal were announced to be developed as a smart cities. Out of those 5 cities, Greater Hyderabad & Greater Warangal were shortlisted in the list of 98 smart cities to be developed in India. In 2015, along with the smart cities, 15 cities of the Telangana state are selected for infrastructure development under the scheme Atal Mission for Rejuvenation and Urban Transformation (Amrut). The central government has approved a budget of US$ 8.3 billion for the first phase of the Amrut project. US$ 1.05 million was allocated to the state of Telangana for administrative & office expenses (A&OE) in order to prepare the Service Level Improvement Plan (SLIP)/Capacity Building (CB). In July, 2015, the Ministry of Urban Development of Government of India released US$ 0.46 million as advance for the 11 cities under Atal Mission for Rejuvenation & Urban Transformation (AMRUT) guidelines. In March 2017, as an initiative to make the city slum free, the state government announced its plans to hasten the 2 bedroom permanent housing projects on 600 acres of land situated on the outskirts & to complete skyways in municipal areas. Source: TechSci Research 36

AMRUT AND SMART CITIES (2/2) Smart cities in Telangana Cities Population Greater Hyderabad 6,731,790 Greater Warangal 819,406 Cities/towns in Telangana covered under AMRUT S. No. City/town 1. Khammam 2. GHMC 3. Warangal 4. Nizamabad 5. Karimnagar 6. Ramagundam 7. Mahbubnagar 8. Nalgonda 9. Adilabad 10. Suryapet 11. Miryalaguda Greater Hyderabad Greater Warangal Source: TechSci Research 37

KEY INDUSTRIES The Information Technology (IT) and pharmaceuticals manufacturing sectors are catalysing the growth of Telangana s economy. Hyderabad is a major exporter of IT and ITeS products. Micro, small and medium enterprises are also strengthening the economic growth of the state. During 2015-2016, 3,779 MSME units were established in the state with a cumulative investment of US$ 242.32 million. The state government is in discussions with Steel Authority of India (SAIL) for establishing a steel factory comprising a deal of value US$ 5 billion on the Khammam-Warangal border. The state government plans to improve cotton rich Warangal, the second major city after Hyderabad, in all aspects particularly by establishing textile parks analogous to those in Tirupur in Tamil Nadu. The state aims to setting up of industry across Telangana rather than limiting it to any specific city. Incorporation and implementation of Telangana State Industrial Project Approval & Self Certification Systems is expected to increase the investments in the state coming years. Key industries in Telangana Information technology Pharmaceuticals manufacturing Tourism Textile Mines and minerals Source: Socio Economic Outlook 2015, Government of Telangana MSME- Micro, Small and Medium Enterprises As per state budget 2016-17, the work on construction of the textile hub & a new pharma city in Warangal is under process. Moreover, Government of India has also provided the state government with final approval for establishing a food park across the district of Khammam in coming years. In addition, the state government has also proposed to establish 3 Aerospace parks in the state during 2016-17. Incentives for micro & small enterprises from the Government of Telangana: 100% reimbursement of stamp and transfer duty on the purchase of land for industrial use 100% reimbursement of Stamp duty for lease of land/shed/ buildings and also mortgages and hypothecations 25% rebate in land cost limited to US$ 16.58 thousand in industrial estates/ industrial parks 38

Information technology is one of the fastest growing sectors in Telangana, contributing around 21% share in the total GSDP of the state. The central government has declared the realisation of an Information Technology Investment Region (ITIR) near Hyderabad. With the establishment of the ITIR, the Government plans to generate 1.5 million direct and 5.3 million indirect jobs in the IT sector in the next five years. Telangana was the first state in India to initiate e- governance projects in India. The growth in the total exports of IT and ITeS products in Telangana is higher than India s IT and ITeS exports by 2.7%. Hyderabad accounts for a majority of the share in the exports of IT products in the state. During 2015-16, exports of IT products of Telangana stood at US$ 10.42 billion. As of May 2016, out of the 348 approved IT SEZs in India, 40 are situated in Telangana. Leading IT companies like Facebook, Google, IBM and Microsoft hold significant presence in Hyderabad. Continuous growth of these companies in conjunction with expansion plans is expected to generate 40,000 direct jobs along with indirect employment of several thousands. State government signed an MoU to explore cloud, machine learning with Microsoft Corporation, India, to improve healthcare and agriculture sectors in the state of Telangana. KEY INDUSTRIES INFORMATION TECHNOLOGY (1/2) IT & ITeS exports from Telangana (US$ million) 2015-16 Exports 10.42 IT Units 1,300 Source: Telangana Economic Survey 2015-16, IT/ITeS: Information Technology/Information Technology enabled Services Sector, Under the Department of Information Technology, Electronics & Communications, the Government of Telangana has introduced Telangana IT Policy, 2016 in April 2016 for the uplifting the performance of the sector in the state. Datawind is going to set up a manufacturing facility in Hyderabad, with a investment of US$ 15.27 million. In the first year of inception, the facility has a target of producing 20 lakh tablets and phones. The state government has set a target of connecting its 23 million residents via internet, by 2018. 39

KEY INDUSTRIES INFORMATION TECHNOLOGY (2/2) Google Microsoft Amazon Google s Hyderabad office played a essential role in the growth of the firm s main products like Gmail, Chrome, Calendar and Docs. The engineers at Hyderabad make specially Google products for native markets and handling structures for agencies in India and other Asia Pacific markets. In 2015, Google announced plans to establish its largest campus in Hyderabad with an investment of US$ 166 million. In July 2014, Microsoft declared its strategies to develop processes in Hyderabad. The state government has guaranteed land and other facilities essential for the development of project. Microsoft s CEO Satya Nadella visited Hyderabad in September 2014, and there are probabilities of discussions with the state government concerning growth of the IT industry in Hyderabad. In 2015, the company announced that it will establish its largest fulfilment centre in Telangana. Amazon aims to intensify its employee base by more than three fold from the existing 4,000 to 13,500 in phases. Facebook Facebook is a US-based online public networking provision company with set-ups in India. The agency in Hyderabad was the 1 st organisation for the company in Asia. Facebook India has designed a programme to strengthen Digital India and Skills India initiatives of the Government of India. The program named Small Business Boost was inaugurated by Telangana s IT Minister K T Rama Rao in Hyderabad in August 2015. Facebook s Small Business Boost initiative will serve as an incredible resource for the growth of these businesses by offer training on best practices for growing a small business online. The programme will also aim at encouraging and training the business owners to access international markets by branding on Facebook platform. 40

KEY INDUSTRIES PHARMACEUTICALS (1/2) Hyderabad accounts for about 20% share in the total export of pharma products from India. This is making Hyderabad as a centre for the drug production. Telangana backs nearly one-third of complete pharma manufacture in the country. The state government declared establishing a Pharma City to enhance the pharmaceutical business in Telangana. As of 2014-15, Telangana had about 429 and 185 pharma companies and bulk drug units, respectively. Companies like Dr Reddy s and Aurobindo are continuously expanding and have already lined up vast investments for the same. Total R&D by pharmaceutical enterprises has grown by additional 20.6% in 2014-15, indicating the potential in Telangana. As per the socio-economic survey 2015-16, at a projected cost of US$ 2.0 billion, the Hyderabad Pharma City is being established, which will consist of R&D Lab, university, etc. The park is proposed to be established on 11,000 acres of land at Mucherla and is expected to create employment opportunities for 70,000 people. In June 2017, the state government has announced plans to set up a life sciences infrastructure fund with a corpus of US$ 148.73 million. The funds collected will be used to create a modular plug-and-play specialised infrastructure for pharmaceuticals, biotechnology and medical devices industry. Funds for support for drugs & supplies under Mission Flexible Pool 2014-15 (US$ million) Approved Released 7.94 1.31 Source: Ministry Of Health And Family Welfare, Government of India,State Portal & News articles 41

KEY INDUSTRIES PHARMACEUTICALS (2/2) Dr Reddy s Aurobindo Pharma Divi's Laboratories Dr Reddy s initiated its business processes as an Active Pharmaceutical Ingredients (API) producer in 1984 and added formulations procedures in 1987. The enterprise entered in to international markets in 1991. In 2013-14, the company works with 50 R&D associates through out the world, having three major clusters in the US, Western Europe and India. In 2014-15, the company generated revenues of US$ 1,660.73 million. From April-September 2015, the company recorded revenues of US$ 899.53 million. Aurobindo Pharma was established in 1986 and turn into a public listed company in 1995. The corporation trades its drugs to 125 countries and derives more than 70% of its total returns from global operations. The company has a group of about 650 scientists who carry out the operations in research and product development. During the third quarter of 2015-16, ending in December 2015, the company recorded total revenue of US$ 361.26 million. Divis Laboratories, started in 1990, produces APIs & intermediates. The company has 500 acres of 13 multi-purpose manufacture units in Hyderabad and a plant in Seemandhra. At the end of third quarter of 2015-16, the total revenues recorded by the company were US$ 130.29 million. Granules India Ltd Granules India is an Indian pharmaceutical company with manufacturing facilities dispersed across India and China. The company assists clienteles across 60 countries with four facilities in India, which include Hyderabad, and a facility in Jingmen, China. In 2013, it acquired Auctus Pharma for expansion of business. In 2015-16, the company generated revenues of US$ 218.63 million. 42

KEY INDUSTRIES TOURISM.(1/3) Dynasties such as Sathavahanas, Kakatiyas, Chalukyas, Qutubshahis, Mughals & Asafjahis have ruled the state of Telangana. Hyderabad, the capital of Telangana, is highly popular for Charminar, Golconda Fort, pearls & biryani. The Kakatiya track with Warangal & Karimnagar are recognised as highly popular tourist places. Jinnaram near Kawal Tiger Sanctuary & the lake resorts at Kadem (Adilabad) & Alisagar Lake (Nizamabad) are places which are extremely popular. Amongst the new tourist spots, the state has established jungle resorts on the border of Telangana- Maharashtra. In order to encourage tourism, the state government has planned listing of a new public limited company, Telangana State Tourism Development Corporation Ltd. (TSTDC), under the Companies Act 2013. The Government of Telangana has set up Yadagirigutta Development Authority (YDA) for maintaining the historic Hindu & Jain monuments at Yadagirigutta & nearby regions. As per budget 2016-17, for renovation & renewal of historic temples in the state, the state government proposed an outlay of US$ 7.63 million as a one time grant during 2016-17. Moreover, the state government allocated an amount of US$ 35.44 million for the development of tourism & culture department during 2016-17. The state's archaeology department in March 2017, discovered & unearthed the world's largest capstone weighing of 40 tonnes, after excavating an ancient human burial site in Narmeata village in Siddipet district 2016 2015 2014 2013 2012 2011 2010 2009 Number of tourist arrivals (millions) 1 54.2 49.7 51.8 51.2 71.6 72.5 91.7 Source: News Articles, Telangana State Statistical Year Book, 2015 1- Includes Foreign Tourists Arrivals till November 2015 94.6 0 20 40 60 80 100 43

KEY INDUSTRIES TOURISM.(2/3) Monuments Charminar Golconda Fort Key tourist spots Qutb Shahi Tombs Chowmahalla Palace Falaknuma Palace Bhongir Fort Ramoji Film City Religious Tourism Others Thousand Pillar Temple Bhadrachalam Temple Nelakondapalli Dhulikatta Phanigiri Kolanpaka Mecca Masjid Kuntala waterfall Pochera waterfalls Number of domestic tourist arrivals in Telangana (million) 91.4 94.5 72.3 71.5 32.1 43.0 50.6 50.5 50.4 51.5 49.4 54.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of foreign tourist arrivals in Telangana (million) 0.7 0.72 0.75 0.57 0.47 0.29 0.23 0.22 0.15 0.07 0.12 0.14 Nirmal Paintings 1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: News Articles, Telangana State Statistical Year Book, 2015 1- Data till November 2015 44

KEY INDUSTRIES TOURISM.(3/3) Initiatives undertaken by the Government of Telangana: Creation of Telangana Samskruthika Sarathi, a distinct state level body to create awareness regarding the cultural heritage of Telangana & provide information about various schemes launched by the Government of Telangana & development of different policies. Proposal to build a new mega Cinema City to promote the tourism film industry in Telangana. The proposed project is expected to span over 2,000 acres in the Nalgonda-Ranga Reddy border in Rachakonda. Proposal to develop Kaloji Kala Kendram at Warangal and Telangana Kala Bharati at Hyderabad, to promote cultural activities in the state. Allocation of US$ 16.59 million for the development of Yadagirigutta Devasthanam. Further, development of Narasimha Abhyaranyam has been planned in 400 acres of land. Meditation centres, Veda pathshalas, marriage halls, parks and cottages would be constructed in additional 1,600 acres of land. With the skills & efforts of the local people & Masters Athletics Association of Telangana, the 38 th National Masters Meet was conducted successfully at the Gachibowli Stadium, which witnessed participation of 3,700 athletes. With this succession, the Masters Athletics Federation of India (MAFI), can plan on the next level by selecting the team for India to participate in the Asian championship, which will be held in China in September 2017. Source: News Articles, Telangana State Statistical Year Book, 2015 45

KEY INDUSTRIES MINES AND MINERALS (1/2) Granite, coal, lime stone, bauxite and mica are the major mineral resources in Telangana. Adilabad, Karimnagar, Khammam and Warangal are the largest producers of coal in the state of Telangana. The state have high volumes of limestone deposits, which gratify various cement factories in the region. Karimnagar, Khammam and Adilabad, are the prime districts for mining in the state of Telangana. These districts accounts for 50% share in the mining business of the state. Karimnagar is considered as strong granite reserve districts in Telangana. Wide range of granites such as Tan Brown, Maple Red and Coffee Brown granite are available in the district. Telangana holds 426 quarries for colour granite and six quarries for black granite. Khammam is emerging as the new growth engine with around 15,000 acres of land being freed by the state government in the district. District Adilabad Karimnagar Khammam Mahbubnagar Medak Nalgonda Nizambad Ranga Reddy Warangal Major Minerals Limestone, Coal, Iron ore, Manganese Lime stone, Coal, Iron ore, laterite & granite Limestone, Coal, Iron ore, quartz & granite, Steatite, Dolomite, Barites, Corrundum Amethyst, Feldspar, laterite, Quart Amethyst, laterite, Granite Limestone & Limestone Slabs Quartz, laterite, Granite Amethyst, laterite, Granite, Limestone Amethyst, Granite, Coal Source: Indian Mineral Scenario States, Ministry of Mines, ASSOCHAM India 46

KEY INDUSTRIES MINES AND MINERALS (2/2) Coal industry is one of the prime segments for Telangana minerals & mines sector. Telangana coal deposits account for 20% share in India s coal deposits. In 2015, a new website for Online Sand Sale Management & Monitoring System was started & is being developed by Telangana State Mineral Development Corporation. The purpose of this website is to identify illegal mining of natural resources & maintain records of the revenues of the mining sector. Production of major minerals, 2015-16 (1) Minerals Production (tonnes) Barytes 26,077 Coal 33,116,541 Dolomite 403,743 Feldspar 361,887 Garnet 9 Latarite 1,780,239 Lime Stone 13,166,012 Manganese ore 1,400 Quartz 310,960 Shale 51,700 Stowing Sand 1,333,991 White clay 62,240 Production of minor minerals, 2015-16 (1) Minerals Unit Production B.Granite Cubic meter 136,992 C. Granite Cubic meter 377,365 Gravel / Earth Cubic meter 17,021,456 Fuller's earth Tonnes 277,025 L. stone slabs Meter Square 1,360,770 Mosaic chips Tonnes 14,890 Road metal Cubic meter 20,786,426 Ordinary sand Cubic meter 1,618,019 Source: Ministry of Commerce and Industry, Government of India Note: 2015-16 (1) : till October 2015 47

KEY INDUSTRIES APPARELS AND TEXTILES (1/2) Cotton is grown in almost all districts of the state except Hyderabad & Nizamabad. The state had 10 lakh spindles as of 2014-15. Out of these spindles, about 8 lakh spindles utilise cotton & the rest use synthetic & viscose fibres. In 2014-15, under Integrated Textile Park scheme, the state government proposed to set up 2 textile parks in Warangal & Sircilla cities. These cities are based in Karimnagar district. Both parks will be established similar to the parks present at Tirupur in Tamil Nadu. The Government of Telangana sought authorization from the central government for the conversion of forest area in Warangal, which is the largest cotton producing district in the state, into a mega textile park. As per the budget 2016-17, the work on textile hub in Warangal has initiated & is under process. As of March 2015, a new textile policy was introduced in Telangana. Purpose of this policy is to provide special incentives to the textiles sector. In 2015-16, the state produced 27 metric tonnes of raw silk, as of August, 2015. In order to promote the textile sector in the state, the Government of Telangana is working on a new textile policy to attract investments in the sector. Proposed textile parks in Telangana (as of October 2015) Pochampally Handloom Park Limited Whitegold Integrated Spentex Park Avantika Textile Park Location Kanumukkala,N algonda Ranga Reddy Medak Telengana Details of Handloom and Textile Industry (2015-16) Handloom Co-operative Societies Number Cotton 259 Silk Weaver Cooperative Societies (WCSs) 33 Wool ICSs 44 Power loom WCSs 157 Tailor CSSs/ Garments CSs 122 Source: Telangana Economic Survey 2015-16 48

KEY INDUSTRIES APPARELS AND TEXTILES (2/2) Financial assistance to the handloom weavers (in US$ million) 0.234 0.128 2014-15 2015-16 Source: Telangana Annual Plan, 2015-16 49

KEY APPROVALS REQUIRED Incorporation of company List of approvals and clearances required Department Registrar of Companies Registration, Industrial Entrepreneurs Memorandum, industrial licences Permission for land use Commerce and Industries Department Allotment of land Site environmental approval No-objection Certificate and consent under Water and Pollution Control Act Registration under States Sales Tax Act and Central and State Excise Act Commercial taxes Telangana Pollution Control Board Excise Department Sanction of power Power feasibility Energy and Power Department Power connection Approval for construction activity and building plan Water and sewerage clearance Water connection Public Works Department Water Security & Public Health Engineering Department 50

CONTACT LIST Agency Contact information Industrial Infrastructure Corporation 6th Floor, Parisrama Bhavan, Fateh Maidan Road, Basheerbagh, Hyderabad 500 004, Telangana, India Ph: +91-40-23237625, 23237626 Fax: +91-40-23240205, 23241385 Website: http://telangana.apiic.in/ email: hyd@apiic.in Telangana State Power Generation Corporation (TSGENCO) Vidyutsoudha, Khairatabad, Hyderabad-500 082, Telangana, India Phone: 040-23499000/39839000 Fax: 040-23499101 email: contactus@tsgenco.gov.in Telangana Pollution Control Board Telangana Pollution Control Board Payavaran Bhawan, A-III, Industrial Estate, Sanath Nagar, Hyderabad - A.P. Website: http://appcb.ap.nic.in email: eew_ss@pcb.ap.gov.in 51

COST OF DOING BUSINESS IN TELANGANA Parameter Cost estimate Land price (US$ per sq m) 3.6 254.6 Labour cost (minimum wages per day) US$ 2.9 22.7 Commercial lease rent (US cents per sq ft per month) 5.4 714.3 Electricity (US cents per kwh) Commercial: 9.5 19.4 Industrial: 8.1 11.9 Residential rent (US cents per sq ft per month) 6.7 40.0 Five-star hotel room (US$ per night) 58 330 Water cost (US$) Industrial: 0.8-3 per 1,000 litres Commercial: 0.7-3 per 1000 litres Source: Telangana State Electricity Regulatory Commission, Ministry of Labour, Telangana State Portal, Property sites, News articles, Travel sites 52

STATE ACTS & POLICIES The Telangana Solar Power Policy 2015 Objectives To promote regionalised and dispersed generation of solar energy. Effective energy conservation by the stimulation of connected grid and off-grid solar tenders. Endorsement of all skills related to solar power generation. Addition of solar parks Read more Telangana Full Fee Reimbursement Policy 2015 Objectives To confirm a uniform scholarship for each category of study, as well as vocational training, which is independent of the fees charged. To guarantee that fees are lower than the subsidy quantities to help students to meet their living expenses. Read more The New Industrial Policy 2014 Objectives Objectives To improve 6 industrial corridors with emphasis on main industrialised sectors, with life sciences, IT and hardware being the major benefactors. Read more To certify viable & comprehensive industrial development. 53

STATE ACTS & POLICIES Telangana IT Policy 2016 Objectives To make Telangana the most favoured destination for the IT companies. To position the state among the leading global hubs for innovation and technology entrepreneurship in the country. Read more Telangana Electronics Policy 2016 Objective To entice US$ 3 billion funds for the Electronics sector through 2020. To develop an employment potential of around 160 thousand by 2020. Read more Telangana Innovation Policy Objectives To boost the start-ups present across the social & rural enterprises by the provision of additional incentives to them. To endorse the innovative ideas through positive industrial engagement. Read more Upcoming Policies in Telangana Telangana Innovation in Multimedia, Animation, Gaming and Entertainment Objectives Telangana Textile and Apparel Policy (T-TAP) Policy 54

Telangana The capital of Telangana, i.e., Hyderabad is regarded as the IT hub of Telangana on the account of increasing growth in the exports of IT and ITeS products from the state. The tourism sector in the state is also being promoted by the state government through the initiative of Telangana Samskruthika Sarathi, which aims in creating awareness regarding the state s culture among the tourists. The major mineral resources being produced in the state include coal, granite, lime stone, mica and bauxite. The limestone deposits in the state are also present at high volume in the state due to which the mines and minerals sector is boosting the economic growth of Telangana across the country. Source: Telangana Economic Survey 2014-15 55