Gujarat, Service Sector

Service Sector 1

Gujarat: A Thriving Industrial State Contributing to India’s economy across all major sectors… Population

5%

Geographical Area

6%

Employees

9.50%

Factorories

9.90%

Net Value

14%

Value of Output Fixed Capital Investment Exports Longest Coastline

15.60%

19.20%

Chemical & Pharma

23%

Engineering

17.6%

Food processing

10.3%

Textiles & Apparels

6.3%

6.30%

22% 30% 98% 85%

Salt Processing

80%

Diamond Processing 65%

Plastic Industry

58%

Petrochemicals 50%

Chemicals Groundnut

42.30%

Cotton

35%

Pharmaceuticals

Source: Socio Economic Review 2007-08

34%

Others

Soda Ash Production

Textiles

Petroleum products

Mineral based industries 2.50%

17%

Stock market capitalisation

Sea Cargo

Presence Across Industry Sectors

28% 25% 18%

Significant share in key industry sectors & products

…India’s largest producer of cotton …World’s 3rd largest producer of denim …Asia’s largest grass root petroleum refinery at Jamnagar …India’s first LNG Chemical Port Terminal at Hazira …World’s largest producer of castor and cumin …World’s largest gas based single location sponge iron plant …World’s largest producer of processed diamonds

Gujarat: Economic Snapshot Gujarat An Enduring Strong Economy

Gross State Domestic Product(GSDP) : USD 45.3 Billion Per Capita Income : USD 722 Urbanisation : 37.36%

Gujarat has demonstrated a 12.5% high industrial growth rate from 2002 -2007

Composition of GSDP as per Economic Activity 18.22%

Gujarat is home to 800 large industries & over 44%

3,20,000 micro, small and medium industries

P rim a ry S e c to r S e c o n d a ry S e c to r

37.78%

T e r tia ry S e c to r

Source: Socio Economic Review 2007-08

Growth Rate in 2006-07

Robust Infrastructure Power

23 Power Plants of Electricity Generation Capacity – 9,561 MW (2007) and estimated to rise to 14,031 MW (2012) ƒ Per capita power consumption is 1,354 units whereas India’s average is 665 units ƒ Rich availability of natural gas (34 MMCD) and Lignite (1,072 MMT) ƒ 24-hour power supply to 98% of the villages

Only State to carry out interlinking of rivers

Water

ƒ An extensive water grid network across the State ƒ The water grid is a network of 75,000 km for water distribution for irrigation ƒ

75% population proposed to be covered by the grid by 2010

Gas

Total length of the existing GSPL pipeline is 14,53,163.33 meter supplying to 18 districts ƒ The pipelines of Gujarat State Petronet Limited (GSPL) supply gas to 13 districts, 5 more districts are proposed to be connected by the pipeline ƒ Total length of Integrated Gas Grid supplying gas to all districts is 2,200 km, of which 1,200 km is complete and 800 km is under construction

Robust Infrastructure Rail & Road

71% of the road in the State is surfaced ƒ State-of-the-art road infrastructure such as India’s first National Expressway from Ahmedabad to Baroda. ƒ Total road length is 74, 111 Km; Target road length is 1,14,866 Km ƒ Total length of railways in Gujarat is 5,188 km (8.25% of India)

First State to privatize ports Ports ƒ

42 ports along 1600 km coastline, including 1 major port at Kandla and 41 minor ports

ƒ

Cost efficient transportation of natural gas, crude oil and petroleum products from Middle East and Europe

ƒ

Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited, Green field port at Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej developed by Petronet LNG Ltd. and Pipapav port developed by Gujarat Pipapav Port Ltd.

Airports

Gujarat is well connected to major cities in the USA, EU, Asia and other Indian metropolitan cities ƒ

13 airports under the operational jurisdiction of Airports Authority of India (AAI), at Vadodara, Surat, Jamnagar,

Rajkot, Bhavnagar, Porbandar, Bhuj, Diu, Mandvi, Mundra, Kandla and Palanpur, including one international airport at Ahmedabad

Service Sector at a Glance ƒ The service sector consists of the "soft" parts of the economy such as insurance, government, tourism, banking, retail, education, and social services. In soft-sector employment, people use time to deploy knowledge assets,

collaboration

assets,

and

process-engagement

to

create

productivity (effectiveness), performance improvement potential (potential) and sustainability. ƒ Typically service sector employment include: ƒ Hotels & Restaurants

ƒ Business services

ƒ Communication (Post/Telecom)

ƒ IT/ITes

ƒ Banking & Insurance

ƒ Tourism

ƒ Education & HRD

ƒ Transport & Storage

ƒ Consulting

ƒ Healthcare/hospitals ƒ Real estate

6

India’s Service Sector at a Glance ƒ India’s service sector is larger and growing

India’s growing services sector

60

increasing

information

two-way

technology

and

trade

in

information

Percent of GDP

capita GDP as shown in the graph ƒ Rapidly

16000

1985-89 1990-94 1995-99 2000-04 2004 per capita GDP

50

14000 12000 10000

40 8000 30 6000

technology enabled services (IT–ITES) and

20

other high-end services sub-sectors has

10

been a critical factor in India’s improved

0

4000 2000 0 Vietnam

India

Indonesia

China

Thailand

Malaysia

Republic of Korea

economic performance. ƒ The service sector recorded a robust 9.1 % average growth, while total GDP grew at 7.0 % in the first four years of the tenth Five Year Plan (2002–07).

‘[Information Technology (IT) and IT Enabled Services] can do for India what automotives did for Japan and oil for Saudi Arabia.’ (Noshir Kaka, Principal, McKinsey & Company)

7

Current USD

70

faster than that of economies with higher per

Indian Service Sector at a Glance ƒ India’s large pool of engineering talent and its rapidly expanding telecommunications sector, IT–ITES have in recent years been the key catalyst of growth. ƒ Growth and improved efficiencies in other key areas, such as financial services, transportation and transport infrastructure, are vital to facilitating expansion of service sectors of the economy. ƒ Services sector has been buoyant through out the fiscal year 2006-07. This can be gauged from revised estimates of gross domestic product (GDP) for 2006-07 released by central statistical organisation (CSO), which has projected the real GDP emanating from services sector to grow at 11 % from over 9.8% of the previous year. ƒ The ‘trade, hotels, transport and communication’ group is set to grow at 13% during the same period, registering significant improvement over 10.4% achieved a year ago. .

8

Gujarat Service Sector at a Glance ƒ Service sector in Gujarat is growing at a highest growth rate of 15.99% among the other sectors.

Composition of GSDP as per Economic Activity (2006-2007)

ƒ Services contributed 44 per cent of GSDP in 2007–08 compared with 41.45 per cent based on the earlier 20062007.

18.22% 44%

ƒ The growth of the services sector has been augmented by increasing industrial activity.

37.78%

S e c o n d a ry S e c to r

ƒ Growth and improved efficiencies in key areas, such as financial services, transportation and transport infrastructure, are vital to facilitating expansion of other sectors of the economy. S.no. 1 1.1 2

P r im a r y S e c t o r

T e r t ia r y S e c t o r Source: Socio Economic Review 2007-2008

Growth across sectors (2006-2007)

GSDP – Sectoral Contribution (%) Sector At Current Prices At Constant Prices

Primary Agriculture Secondary Manufacturin 2.1 g 3 Tertiary Total GSDP

2005- 06 20.43 15.54 39.25

2006- 07 19.11 14.79 38.6

2005-06 20.23 17.21 38.32

2006-07 18.22 15.29 37.78

29.62 40.32 100

30.18 42.29 100

29.36 41.45 100

29.89 44 100

Tertiary

Secondary

Primary

17.95%

11.36% Source: Socio Economic Review 2007-2008

9 GSDP: Gross State Domestic Product

15.99%

Gujarat Service Sector at a Glance Employment distribution across services sector 700000

with community, social & personal service

600000

of June-2007 growing at 2.33% ƒ The employment in private sector has increased to 0.944 million at the end of June-2006 to 1.00

152000

200000

123000

100000 0

56000

52000

51000 Restaurants, Wholesale & Retail Trade

the end of June-2006 to 1.80 million at the end

300000

Construction

private sector has increased from 1.75 million at

400000

Electric,Gas & Water

ƒ The total employment in public sector and

500000

Financing, Insurance, Real Estate,Business

storage and communication

600000

Transport,Storage & Communication

accounting for 0.6 million followed by transport,

Employment (000)

ƒ Employment is distributed across service sector

Community,Social & Personal Services

Employment Distribution

million at the end of June-2007. ƒ During the year 2006-07, 2.84 lakh persons have registered in the employment exchanges and 0.142 million have placed in employment as against 0.227 million persons registered and 0.131 million persons placed in employment during 2005-06. ƒ During the year 2007-08 (April-September-2007) 0.185 million persons have been registered in the employment exchanges and 0.83 lakh have been placed in employment.

10

Education Service Education Infrastructure

ƒ Gujarat had an effective literacy rate of 61.2% as per 1991 census. Gujarat aims to have 100% literacy by 2010.

960 Degree Engg. & Hotel Mgmt. Degree Pharmacy

ƒ Knowledge-based industries have been prominent among the fastest growing services in Gujarat

15241

Degree Architecture & Allied

19480

MCA

ƒ The provisional number of educational institutions imparting primary education is 39,064 in 2006-07

MBA/ PGDBM

4005

ƒ The total intake capacity for technical education was 14551 seats in degree engineering, 220 in degree architecture course and 3045 in degree pharmacy course. While in 2007-08, 1140 seats, 40 seats and 660 seats have been added in degree pharmacy bring total intake capacity to 15691 seats.

3405 260 1530

Diploma Engg. & Hotel Mgmt.

India’s premier institutes in Gujarat

ƒ 31 Universities and 44 degree engineering and 57 diploma colleges provides a pool of quality knowledge manpower ƒ Every year 0.7 million graduates are passing through Gujarat

11

Education Service ƒ With increasing growth of knowledge-based industries and increase in the need for technical manpower, the state is focusing on the development of a good academic foundation. Education Infrastructure Opportunities ƒ Setting up of short term courses in existing ITI, Polytechnics and Engineering Colleges ƒ Setting up of anchor Institutes in different focus industry sectors. ƒ Setting up of Bio-Technology research oriented institutions covering a wide variety of contract research (pre-clinical and clinical) bioremediation and quality certification / validation facilities and institutes speciallizing in post graduate courses, specialized courses and value added courses ƒ Opportunities in health-care sector to initiate clinical research institutes, Healthcare Outsourcing (BPO)

12

Healthcare Sector Gujarat Healthcare Infrastructure (2005 – 2006)

ƒ Heathcare is important for having a healthy productive

4%

workforce and general welfare so as to achieve population 17%

stabilization. ƒ Gujarat is on forefront of establishing and maintaining good health infrastructure at various levels. Currently 1424 health institutions are functioning at various levels 1073 primary health centers, 273 community health centers & sub district level hospitals, 25 district level hospitals and 30 others.

79%

Primary Care Secondary Care Tertiary Care

Hospitals in Gujarat (2005-2006)

ƒ Gujarat offers holistic medicinal services and cost effective treatment through various District hospitals, Sub district hospitals and Private Specialty Hospitals ƒ Most sought after Super – Specialties in the State include Cardiology, Neuro – Surgery, Orthopedics, Infertility treatment, joint replacement and eye surgeries Source: Office of Commissioner Of Health : Government of Gujarat

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Private Specialty District Hospital, Hospital , 20 25 Sub District Hospital, 25

Healthcare Sector No. of Registered Doctors (2006)

ƒ During the year 2006-07, 36.918 million patients 41000

were treated in the outdoor while 3.253 million patients

were

treated

in

the

indoor

through

Government medical institutions ƒ Gujarat has 13 medical colleges, 39,734 registered

40000 39000

39734

2005

2006

38013

38000

36831

37000 36000

39461

35086

35000 34000

Doctors and 16,816 registered nurses ƒ The state government’s initiatives in healthcare have

33000 32000 2002

2003

2004

been nationally and internationally recognised: Chiranjeevi Scheme was awarded the Asian Innovation Award 2006 at the Global Entrepolis Singapore by the Singapore Economic Development Board. Dataquest e-Governance initiative National Award presented to Commissionerate of Health and Family Welfare for e-Governance in Integrated Disease Surveillance Project.

14

Healthcare Sector ƒ Gujarat

is

becoming

a

preferred

medical

tourist

Medical Tourists visiting India, 2000-2006

destination. About 1,200 to 1,500 Non Resident Indian’s, 250000

Non Resident Gujaratis (NRG’s) and a small percentage of foreigners come every year for different medical

200000

treatments. Gujarat contributes close to 25-31% of the

150000

total medical tourism business in India.

100000

ƒ Gujarat is evolving in terms of number of hospitals,

230000

140000

40000

50000 10000

healthcare centres, beds and are expected to continue a

0 2000 2001 2002 2003 2004 2005 2006

positive trend in future. Doctor to patient ratio is 1 : 10 and nurse to patient ratio is 1: 5 ƒ Market for tertiary care expected to grow at a faster rate,

Benefits of Public Private Partnership

due to rise in income levels, increasing adoption of

ƒ

Cost Effectiveness, Higher Productivity

health insurance and rise in complex in-patient ailments(

ƒ

Accelerated

Delievery,

Clear

Customer

Focus

heart diseases, kidney ailments, cancer.

ƒ

ƒ The State Government is taking several initiatives to

Enhanced Social Service, Recovery of user charges

make Gujarat a Global healthcare destination

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Information Technology Emerging IT/ITeS destinations

ƒ Information technology enabled services (ITeS) and IT hardware industry are the focus growth areas of Gujarat’s IT industry

Gandhi Nagar

ƒ Gujarat currently has about 22,358 professionals in the

Ahmedabad Rajkot

sector

Vadodara Bhavnagar

ƒ Software exports from the State saw a growth rate of

Surat

107.3% to reach USD 134 million in FY 2006-07 as compared to that of FY 2005-06

Software exports (in USD million)

ƒ The IT/ITeS sector turnover should grow from USD 60

134

million in 2005 to USD 2.4 billion in 2010-11 64.64

ƒ The Information and Communication Technology (ICT)

48.86 35

sector in Gujarat is projected to see investments of up to USD 3.7 billion by 2010

FY 2003-04

Source: DST, Government of Gujarat

16

FY 2004-05

FY 2005-06

FY 2006-07

Information Technology IT Manpower (Projected )

Software Exports (Projected )

800 600 400 200 0

990

35,000

991

30,000

750

22,958

25,000

568

24,597

26,353

28,235

30,251

India’s GDP and the IT20,000 sector

430

No

No

1,200 1,000

15,000 10,000 5,000

2007-08

2008-09

2009-10

2010-11

0

2011-12

2007-08

2008-09

2009-10

2010-11

2011-12

ƒ The projected Software Exports will be approximately 241 million USD in 2011 - 2012 ƒ The State produces around 6,11,909 graduates every year, nearly 14.5% of which can be directly form the IT workforce base and the rest have the eligibility to be employed in the ITeS sector. ƒ The state has 37 AICTE approved engineering colleges which produce nearly 13,000 students every year. ƒ The main focus is on an extensive critical infrastructure and a sound e-commerce foundation plentiful opportunities in IT enabled services. ƒ The government has also taken initiatives on Gujarati language software standardization which will help improve interoperability of software/database among the government departments. ƒ

The state shall provide highest of security for the operation of IT/ITES units.

17 Source: Frost & Sullivan

Tourism Sector Tourist Flow in Gujarat

including some of the most substantial excavations of Indus Valley civilization period at Lothal (near Ahmedabad), Surkotada and Dholavira (in Kutch).

12.34

7.98 7.61

2006 - 07

ƒ There are more than 400 archaeological sites in the state

6.16

2005 - 06

Sikh.

10.7

2004-05

religions of Asia – Hindu, Buddhist, Jain, Islamic, Parsee and

14 12 10 8 6 4 2 0

2003-04

Its historical monuments represent the great

2002-03

destination.

Number of Tourists (millions)

ƒ Gujarat has immense potential to become a major tourist

ƒ The archaeological zone of Champaner - Pavagadh have been acclaimed by UNESCO as the “World Heritage Site”

IT Manpower (Projected )

because of its great mosques, temples, stepwells and forts. The Wild Ass sanctuary,Dholavira Harappan City and Rani-

2% 21%

Ki-Vav are in the process of getting status of the World Heritage site. ƒ The state has important pilgrimage places like Dwarka, Somnath, Dakor, Ambaji, Udwada, Navsari and Surat for Parsees, Palitana, Girnar, etc

77% With in Gujarat

18

OIS *

Foreigners

Tourism Sector ƒ More than 2000 Fairs and Festivals are organised every year.

Average Tourist Spend (one person per day)

Important state for Event-based tourism especially based on Navratri, Kite Festival and Tarnetar Fair (The Ternatar Fair

Domestic Tourists

popularly known as the Trinetreshwar Mahadev Mela revolves around the scared temple 'Trinetreshwar‘)

Rs. 630

Foreign Tourists $7001050

$1250

Rs. 500

ƒ The State witnessed total 12.34 million tourists during 2006 – 07 out of which 12.1 million were the domestic tourists and 0.20 million foreign tourists. The average contribution of tourism

Gujarat

India

Gujarat

India

industry to the State’s GDP is close to 2.5 %, while the comparable figure for India is 5.3%. The average foreign tourist spend per person per day is close to USD 700 to 1050 in Gujarat ƒ Opportunities for knowledge and leisure, restaurants & cafetarias infrastructure is Junagadh, Bhavnagar, Modhera, Sidhhpur, Idar, Pavagadh, Adalaj, Vadodara, Dandi, Ranpur, Rajkot, Jamnagar, Dholavira, Lothal, Morbi, Somnath, Ahmedabad, Vadnagar ƒ The tourism sector in Gujarat has attracted dozens of hoteliers, because of its proximity to leading tourist states. Hotels have lined up 2593 USD million worth of investments, which are expected to create 26,370 jobs. Medical tourism is a recent concept in India and Gujarat has been able to match world standards in almost all areas of treatment.

19

Telecom Sector ƒ There were nearly, 2.36 million telephone connections

Telecommunication Snapshot

(including W.L.L.) working in the State. ƒ India’s leading GSM players like Vodafone, Idea Cellular, Bharti Cellular, and Bharat Sanchar Nigam Ltd. (BSNL), have been given licenses to provide GSM Cellular

Telephone

Services

while

Phones per 100 population (including WLL + mobile

6.77

Phones per sq.km (including WLL + mobile)

17.48

No. of Internet Subscribers

146176

No of Cellphone Subscribers (2006)

7413500

Reliance

communication and Tata Telecom have been given Cellular Subscribers Trend in Gujarat

licenses to provide CDMA cellular telephone services in

ƒ The state’s share in the countrywide outstanding subscriber base rallied around 7.34%.

000

telecom circle of Gujarat.

ƒ An investment of 682 USD million is announced in the

6000 5000 4000 3000 2000 1000 0

5041 3089 2073 467

2001-02

state followed by 60 USD million of proposed investment

20

1045

2002-03

2003-04

2005-05

2005-06

Real Estate Sector ƒ The industrialization of the state has helped the real estate sector to groom in different cities. The cost of real estate properties in the cities like Ahmadabad, Gandhinagar, Vadodara, Surat etc are very encouraging and these have emerged as important sectors for investment. ƒ The real estate sector has witnessed enormous growth. There are many factors for this like retail, finance, IT, BPO and telecom, there is a boom in real estate too. ƒ Gujarat, which has a strong middle class population and one of the highest per capita GDP, is now becoming a preferred destination for the organized retail sector. This is evident with the spurt of malls in the state with companies like Prozone that are looking at setting up their first two malls in Rajkot and Surat before entering other cities in India. Raymond, too, started its first kids apparel store, Zapp, in Ahmedabad before entering markets like Mumbai and Pune. ƒ The State offers great road connectivity and reliable power supply to its consumers. It has one of the highest per capita power consumption (1175 units, as compared to India’s average of 592 units) and competitive commercial real estate rates in comparison to other states in India.

21

Real Estate Sector ƒ Apparels and jewellery retailing offers tremendous

Rental Value Trend*

opportunities for the sector. 160

ƒ Gujarat, which, is the hub for textile and jewellery

120

manufacturing in India is well positioned to exploit

80

this opportunity.

40 0

ƒ With organized retail constituting only 3% of the total

1994

Indian retail, the state offers a huge potential for

2000

* Quoted rentals in existing malls

growth. ƒ The state aims to increase the availability of specialized courses like retail management, which can go a long way to serve the need of quality human resources ƒ Brand proliferation witnessed in recent years (last 45 years).

22

2007

Civil Aviation ƒ There is a tremendous growth in passenger traffic in the State. ƒ Total passenger traffic in the State expanded by 27.2% to 31.5% recorded in the 2006-07. ƒ The rise in passenger traffic was due to 38.25% hike in domestic passenger traffic to 0.267 million. ƒ Cargo routed through the state airports revived by 22.96% from a decline of 5.52% recorded during 200607. ƒ Traffic of domestic passengers gained by a robust 41.47 percent after a 25.8%t. ƒ A total of 6341 USD million of investment is in pipeline in Gujarat in 2007

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Invest in Gujarat : A World- class Business Destination To Delhi Banaskantha

Bio-Tech Cluster Patan Mehsana

Soda Ash & Salt Based Industries, Cement & Steel Pipes

Kutch

Himmatnagar

Gandhinagar Ahmedabad Kheda

Surendranagar

202 Industrial Estates across Gujarat Petroleum & Brass parts Engineering and Ceramics

Panchmahal Dahod

Anand Jamnagar Vadodara

Rajkot Porbandar

Narmada

Bharuch Bhavnagar Amreli Junagadh

Surat

Soda Ash and Salt Based 18 Captive Ports along 1600 km coastline across Gujarat

Gujarat International Finance Tec City

Navsari

Special Investment Region (SIR)

Knowledge Corridor Industrial Corridor (DMIC) Savli Biotech Park Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) Chemicals, Petrochem. Pharma, Textiles & Engineering

Valsad

To Bombay

55 Special Economic Zone (SEZs) across Gujarat

Key Contacts

Industries Commissionerate, Government of Gujarat

http:// www.ic.gujarat.gov.in

iNDEXTb -Industrial Extension Bureau

http://www.indextb.com

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