Gujarat, Sme

Gujarat : An Enduring Strong Economy  Population : Over 50 million (5.0% of India)  Geographical area : 1,96,000 sq. km (6.2% of India)  Gross State Domestic Product (GSDP) : US$ 45.3 billion  Per Capita Income : US$ 915 at current prices  Urbanisation : 37.4%

 High industrial growth : Gujarat has demonstrated a

Composition of GSDP as per economic activity (2006-07)

high industrial growth rate of 12.5% from 2002 - 2007

18.2%

 Industrialisation : Gujarat is home to over 800 large industries and 3,20,000 micro, small and medium

Primary Sector

enterprises

Secondary Sector Tertiary Sector

Source: Socio Economic Review 2007-08

2

44.0%

37.8%

Gujarat : A Thriving Industrial State Contribution to National Economy 30.0%

Stock market capitalization

22.0%

Coastline

21%

Exports

17.0%

Fixed capital investment

15.6%

Value of output Net value added by manufacture No. of Factories

Employees

Presence across industry sectors

14.0%

Petroleum products

31.2 %

Chemical & Pharma

22.9 %

Engineering Industries

12.6 %

Food & Beverages

9.7 %

Textiles & Apparels

6.5 %

Mineral based industries

2.9 %

Metallurgical Industries

7.5 % 6.7 %

Others

10.0%

9.5%

Significant share in key sectors & products Soda ash production

98.0%

Salt processing

 World’s largest producer of castor and cumin

85.0%

Diamond processing

 World’s largest gas based single location sponge iron plant

80.0%

Plastic industry

 World’s largest producer of processed diamonds

65.0%

Petrochemicals

58.0%

Chemicals

 World’s 3rd largest producer of denim

50.0%

 Asia's largest grass root petroleum refinery at Jamnagar Groundnut

42.3%

Pharmaceuticals Cotton

Fabrics

 India's largest producer of cotton

42%

 India's first LNG chemical port terminal at Hazira

35.0% 30.0%

Source: Socio Economic Review 2007-08

3

MSMEs in Gujarat : An Overview Progress of MSMEs registration in Gujarat  The strength of Gujarat’s manufacturing sector lies in its

(MSMEs)  MSMEs have played a pivotal role in industrial dispersal and

No. of MSMEs

strong base of micro, small and medium scale enterprises

350000 300000 250000 200000 150000 100000 50000

overall industrial development of the State

0 2000

2001

2002

2003

Year

2004

2005

2006 (Sept-06)

 MSMEs have proved to be a major contributor to the

economy of the state, especially in terms of value

Under the Act 2006, MSMEs are classified in three classes

addition, employment generation and entrepreneurship

Classes of MSME

development Enterprises

Investment in Investment in Plant & Machinery (Manufacturing) Equipment (Services)

Micro

Less than Rs. 25 Lakhs

Less than Rs. 10 Lakhs

Small

Rs. 25 Lakhs– Rs. 5 Cr

Rs. 10 Lakhs– Rs. 2 Cr

Medium

Rs. 5 Cr– Rs. 10 Cr

Rs. 2 Cr– Rs. 5 Cr

 There are at present over 320,000 MSMEs in Gujarat.  Government of India, under ministry of MSMEs have

enacted the MSME Development Act 2006 and put into operation effective from 2-10-2006

Source : Industries in Gujarat 2007

4

Investment & Employment Trend of MSMEs Investment trend in MSMEs

 The total investments by the MSME units in Gujarat was at 9000

Investment (INR million)

INR 74,460 million (US$1,816.09 Million) while production was estimated at INR 102,230 million (US$ 2,493.41 Million) during 1999-2000

 There has been an average investment of INR 5,000 million (US$121.95 Million) every year in MSME sector between

7929.6

8000

7324.3

6000

6997.4

6758.4 6505.2

7000 5294.6

5740.8 4967.7

4548.6

5000

4911.2

4000 3000 2000 1000

1996-2006

0 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Year

 The functional MSME units in the state has been responsible Employment generated

for generation of a total 700000 jobs in the decade 60000

 Total no. of MSMEs registration (up to 2007) in rural, urban & metropolitan areas are 50,529, 72,506 & 4,483 respectively

Jobs Generated

(1996-2006)

50000 40000

47510

43934

48032

44274

43741

46282

30000

35555

20000

31062

29924

30784

200203

200304

200405

10000 0 199697

199798

199899

199900

200001 Year

Source : Industries in Gujarat 2007

5

200102

200506

District wise Dispersal of MSMEs in Gujarat No. of MSMEs present in the district Ahmedabad region has the highest number of registered MSMEs in Gujarat constituting 21% of the total MSMEs present in the state Ahmedabad, Surat, Rajkot, Vadodara and Valsad are the major MSMEs clusters in the state Surat ranks second with 15% of the total MSME units registered in the state followed by Rajkot with 10% of the total registered MSME units Ahmedabad, Surat and Rajkot together constitute approximately 50% of the total registered MSMEs in the state

Banaskantha 2%

Rann of Kutch Little Rann of Kutch

Kutch

Patan 2%

Mehsana Sabarkantha 5%

Surendranagar Ahmedabad 21%

2%

Jamnagar 4%

Kheda Panch 4% mahal Dahod 2% Anand 6%

10%

Vadodara

Rajkot Porbandar Amreli Junagadh 2%

Central Gujarat constitutes 39.65% of the total MSMEs followed by Saurashtra (26%), South Gujarat (24.35), North Gujarat (8%) & Kutch (2%) region

Narmada

4%

Bhavnagar

Bharuch

3%

Surat 15%

Navsari Valsad 5%

Source : Industries in Gujarat 2007

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Gandhinagar

Dang

Industry Sector wise MSMEs Industry Sector 0.8%

Textiles

0.9% 2.1% 2.6%

0.5%

Machinery & Parts except Electricals

2.8% 3.6%

Metal Products 3.8%

Food Products

4.3%

Chemical & Chemical Product

31.9% 5.0%

Wood Products Electrical Machinery & Apparatus

5.3%

Non-Metallic Mineral Products 21.4%

7.5%

Basic Metal Industries 7.6%

Paper Prod. & Printing Rubber & Plastic Prod. Transport Equipments & Parts Leather Products Beverages, Tobacco & Tobacco Products Others

Beverages, Tobacco & Tabaco Products

Leather Products

Transport Equipments & Parts

Electrical machinery & apparatus

Paper Prod. & Printing

Basic Metal Industries

Non-Metallic Mineral Products

Rubber & Plastic Prod.

Wood Products

Chemical & Chemical Product

Food Products

Metal Products

Machinery & Parts except elect.

Textiles

Others

Source : Industries in Gujarat 2007

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MSMEs-Industry Clusters These clusters together constitute 37.6% of all MSME units, 43.5% of investment, 47.8% of production & 47.2% of employment in MSME sector in Gujarat. Ahmedabad district leads in the state with the presence of all MSME

industries

cluster followed by Rajkot, Surat and other districts.

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Investment Opportunities Textiles 

Manufacture of Taffeta Fabric (Project cost–US$1.17 million)



Manufacture of Crop Shade Fabric (Project Cost–US$0.93 million)



Conversion Activity for Non- woven Healthcare Disposables (Project Cost – US$0.71 million)



Manufacture of Webbings for Seat Belts (Project Cost – US$0.71 million)

Food & Agro processing 

Pack-house Project for Bananas (Project Cost–US$1 million)



Tomato Processing at Important Crop Pockets (Project Cost–US$1 million)



Bakers Yeast (Project Cost–US$1.33 million)



Enzymes for Food Processing Industry (Project Cost–US$ 1.10 million)

Engineering 

Investment Casting Project (Project Cost–US$ 2.2 million)



Auto Components (OEM Supply) (Project Cost–US$ 2.2 million)



Forged Auto Components (Project Cost–US$ 0.88 million)



Ready Mix Concrete for Construction (Project Cost–US$0.77 million)

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Investment Opportunities Gems & Jewellery 

Assaying & Hallmarking Centre (Project Cost–US$ 0.44 million)



Gold Refinery (Project Cost–US$ 0.66 million)

Chemicals 

Fine chemicals



Specialty chemicals



Polymer additives



Nylon, Engineering plastics

Centres of Excellence 

Research & development facilities



Industry specific educational institutes and training centres

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Gujarat: Robust Infrastructure Power

Dependable power supply–key to industrial development  Present power generation capacity is 9,628 MW; plans afoot to raise it to 25,000 MW by 2012  Per capita power consumption is 1,354 units against the national average of 665 units  Rich availability of natural gas (34 MMCD) and lignite (1,072 MMT)  24-hour 3-phase uninterrupted power supply

Gujarat is the only State to carry out interlinking of rivers

Water

 An extensive water grid network of 75,000 km for irrigation and drinking  It will cover 75% population of the state by 2010

Gas

Transformation of economy through natural gas  Gujarat State Petronet Limited (GSPL) supplies piped gas to 13 districts, 5 more districts will be added  Total length of Integrated Gas Grid will be 2,200 km, of which 1,453 km is complete and the rest is under construction

11

Gujarat: Robust Infrastructure Rail and Road

Surfaced road length – one of the highest in Gujarat  State-of-the-art road infrastructure: India’s first National Expressway between Ahmedabad to Vadodara operational  Total road length is 74,018 km - 95% surfaced road  Rail length in Gujarat of 5188 km (8.25% of India)

Gujarat Ports opening the gateway to prosperity Ports 

42 ports along 1,600 km coastline, major port at Kandla other important ports at Mundra and Pipavav.



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

Airport connectivity – a cutting edge for business



13 airports - Vadodara, Surat, Jamnagar, Rajkot, Bhavnagar, Porbandar, Bhuj, Keshod, Mandvi, Mundra, Kandla, Palanpur, Deesa and Ahmedabad (International Airport)

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Gujarat Industrial Policy 2003

Good governance

Development of Micro, Small & Medium Enterprises

• • • •

Labour reforms to facilitate industrial investment to generate employment and ensuring productivity. Upgradation of Industrial and Urban Infrastructure Power reforms Port led development

• Interest subsidies at 5% to MSMEs for setting up new units, expansion and modernization of existing units • Interest subsidy at 3% to MSMEs for technology upgradation of existing units • Financial assistance to MSMEs for quality upgradation, including obtaining ISO–9000 and ISO –14000 certification • Assistance for filing patents

• Government has decided to recognize a cluster with a critical mass of a minimum of 50 units located within the radius of 10 kms at a particular location. Cluster development

• Common facility centers for clusters to be encouraged • Under the scheme, assistance will be given to Cluster Association for carrying out certain activities leading to further strengthening of the clusters.

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Incentives for MSMEs 









Interest Subsidy •

Incentives to SMEs for setting up new projects, expansion, diver sification or modernisation.

•

5% interest subsidy up to Rs. 5 lakhs per year for five years period

Technology Up gradation •

Interest subsidy @3% per annum maximum Rs. 3 lakhs on term loan towards capital equipment

•

Technology Acquisition Fund

•

Assistance for Patent Registration

R&D Support •

Support to R& D institutions

•

Sponsored Research–Subsidy @ 50% of the project maximum Rs. 5 lakhs

Quality Certification •

Support for BIS certification, ISO 9000, ISO 14000, ISO 18000, HACCP, WHO GMP and others

•

Subsidy @ 50% subject to Max. INR 0.2 million

Marketing Support •

Assistance for participation in International Trade Fairs upto maximum Rs. 2 lakhs

•

Assistance to Industries Associations @ 50% of total rent subject to Maximum Rs. 5 lakhs

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Present Institutional Structure in Gujarat Gujarat has several institutions that supports the growth of MSME segment in the state: 

Small Industry Service Institute (SISI) SISI is an arm of the office of the Development Commissioner, Small Industry Development Organization (SIDO), New Delhi, in Gujarat state. SISI helps MSME’s meet various needs of planning, assessment and implementation by offering services in technical consultancy, industrial management, training and workshops.



Gujarat Institute of Development Research (GIDR) It is an autonomous body engaged in research related to development issues. GIDR, through its Industry and Finance research, undertakes study on sectoral development. A large portion of studies undertaken by the institute have focused on development of small scale rural industries.



Entrepreneurship Development Institute of India (EDI) It is an autonomous body supported by Government of India and Government of Gujarat and sponsored by other apex financial institutions. EDI offers education of excellence in entrepreneurship, training and research. The institute has a mandate to promote the creation of Micro, Small & Medium Enterprises.

15

Present Institutional Structure in Gujarat 

Center for Entrepreneurship Development (CED) It is an autonomous body jointly promoted by Government of Gujarat, GIIC*, GIDC*, GSIC* and GSFC*. CED aims to cater potential entrepreneurs by grooming their management skills. The institution offers variety of learning platforms for micro, small and medium enterprise creation.



Small Industries Development Bank of India (SIDBI) SIDBI is a national support institution for small and medium enterprises for their financial requirements and up gradation. Its mandate is to work for technology up-gradation in Micro, small & medium enterprises clusters.



District Industries Centers (DIC) DICs, under the governance of Industries Commissionerate supports the development and economic activities of MSMEs, at district level.

*

GIIC-Gujarat Industrial Investment Corporation GIDC-Gujarat Industrial Development Corporation

*

GSIC-Gujarat Small Industries Corporation Ltd. GSFC-Gujarat State Financial Corporation Ltd.

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Invest in Gujarat : A world-class Business Destination To Delhi Agroprocessing, Dairy and Engineering

Banaskantha

Bio-Tech cluster Patan Mehsana

Soda ash and saltbased industries, cement and steel pipes 202 industrial estates across Gujarat Petroleum and brass parts

Kutch

Gujarat International Finance-Tec City

Himmatnagar

Gandhinagar Ahmedabad Kheda

Surendranagar

Panchmahal Dahod

Anand Jamnagar

Dholera Vadodara

Rajkot Porbandar

Engineering and ceramics

Bhavnagar Amreli Junagadh

Surat

Soda ash and salt based 18 Captive Ports along 1600 km coastline across Gujarat

Rajpipla

Bharuch

Navsari

Special Investment Region (SIR)

17

Industrial corridor (DMIC) Savli Biotech Park Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) Chemicals, petrochem. pharma, textiles and engineering

Valsad

55 special economic zones (SEZs) across Gujarat

To Mumbai

55 special economic zones (SEZs) across Gujarat 202 industrial estates across Gujarat

Knowledge corridor

Vibrant Gujarat : Global Investors’ Summit  The Government has been playing a very active role in promoting the State as a potential investment destination through a series of Global Investors’ Summits, organised every two years since the year 2003  Total 363 MoUs signed during Vibrant Gujarat Global Investors’ Summit 2007  Apart from the total MoUs, 309 projects are currently under implementation aggregating an investment of INR 278,940 million (US$ 6,803.415 million), with employment potential for 65,194 jobs  Encouraged by the outstanding response to the Summits held in 2003, 2005, and 2007, the fourth Global Investors’ Summit is planned in January 2009

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Connecting Further… Industries & Mines Department, Government of Gujarat

http://www.imd-gujarat.gov.in

Industries Commissionerate, Government of Gujarat

http://www.icgujarat.gov.in

Industries Department, Government of Gujarat

http://www.gujaratindustry.gov.in

Industrial Extension Bureau (iNDEXTb)

http://www.indextb.com

Maps used not to scale

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