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Madhya Pradesh: Means Business PowerPoint Presentation
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Madhya Pradesh: Means Business

Madhya Pradesh: Means Business

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Madhya Pradesh: Means Business

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  1. Madhya Pradesh:Means Business Information Technology/ Information Technology Enabled Services

  2. Overview Overview Madhya Pradesh (MP) – State that means business • MP is the second largest State in the Country stretching over 308,000 sq kms. • The State is blessed with large mineral resources of coal, diamond, limestone, methane etc. • MP is among the top 4 states of the Country for industrial investments. Economic Snapshot Madhya Pradesh is emerging as a key growth center for the Country • Per capita GSDP USD 369** • Manufacturing sector USD 8.5 bn** (Registered & Unregistered) • Gross state domestic product (GSDP) USD 23,983.63 Mn** • Average growth rate 5.5% per annum Advantage MP Madhya Pradesh has one of the upcoming industrial base in India • The State is centrally located • Investor friendly Government policies • Total electricity generation capacity 6,449.25 MW* • India’s first greenfield SEZ Indore SEZ • Industrial Centers 8 Power Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09 • MP is rich in low grade coal suitable for power generation. • Potential of hydro-energy generation. • Installed power capacity (MP’s share) • Hydel Power Generation: 852.7 MW* • Thermal Power Generation: 2,147.5 MW* *Ministry of Power (powermin.nic.in) **Source: Indiastat.com (as on 23 Feb 2006)

  3. Enabling Infrastructure The State is well connected with the rest of India with almost 425 trains passing through the State on a daily basis. Of these 175 trains pass through the State capital Bhopal alone. MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA RAILWAY NETWORK 25 airstrips.** Convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho. 5 operational airports. Indore airport has the capability of handling international cargo. An international airport proposed in Bhopal. GWALIOR KHAJURAHO AIRPORTS INDORE BHOPAL JABALPUR The total length of roads spanning MP is 67,600 kms.** National highways of 5,200 kms run through the State.* 18 National highways including trunk routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad. The total length of State highways in the State is 9,885 kms.** Convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust. ROAD NETWORK *Source: Department of Road Transport & Shipping (morth.nic.in) **Source: www.destinationmadhyapradesh.com

  4. Madhya Pradesh: A Preferred Investment Destination 31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants Over 2,000 kms of roads being developed with Private Partnership (BOT) Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/ adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc. India’s 1st operational Greenfield SEZ at Indore Third largest producer of cement in India* Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor Favourable climatic conditions for cotton and over 40,000 power-looms are driving the textile industry Various blocks available for power, cement, iron and steel units Largest producer of pulses and oilseeds in the Country (~75% of soyabean production) Over 18,000 technical graduates and 230,000 graduates add to workforce each year 12 blocks with reserves totalling 2,585 million tons of coal has been identified Over 144 BCM of coal bed methane reserves available Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative *Source: www.mpsidc.org & Brochure: MP Means Business

  5. Delhi (740 Kms) (MPV - 789.5) Ahmedabad (570 Kms) (MPV - 220.63) Kolkata (1350 Kms) (MPV - 613.19) Mumbai (780 Kms) (MPV - 1000) Pune (800 Kms) (MPV - 206.51) Hyderabad (840 Kms) (MPV - 257.9) Key Markets (Distance From Bhopal) MPV – Market Potential Value Chennai (1430 Kms) (MPV - 362.84) Bangalore (1400 Kms) (MPV - 254.52) MP: The Right Place with the Right Environment Savings in Office Space Rates (A comparison of rates in Central Business Districts) DESTINATION MADHYA PRADESH Fastest mover* in overall performance among the big States in the Country. Fastest mover in agriculture Fastest mover in infrastructure development. Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities. Savings in Land Cost Ranks 2nd in terms of governance. (Estimated Values for Multi-product SEZs) Ranks 3rd in terms of law & order Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 – USD 4.0/day in metros The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost. MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country. * Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003 **Source: India Today (September ‘06 Issue) - Distances rounded off Source: (Reference: RK Swamy)

  6. Industrial Policy: Catalyst for the Investments The Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives. The main thrust of this policy is: • Establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation which would take decisions about rationalization of taxes, facilities of mega projects and other related matters. • Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented. • Developing infrastructure for supporting the identified industrial clusters • Reviving closed down/ sick industrial units by granting special packages. • Attractive incentive schemes. SPECIAL INCENTIVES Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister. Industrial investment promotion assistance – 50% to 75% of commercial tax for 3-10 years Concessional registration charges and stamp duty exemption for Term Loans. Interest subsidy on term loan for 5 – years @ 3% to 5%. For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000 Land on 75% concessive rate for Mega Projects limited to USD 4.4 million. Entry tax exemption for 5 years. 5 years electricity duty exemption on captive power generation 15% capital subsidy to SSI up to USD 33,000 in backward areas Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost CLUSTER APPROACH • Indore – Pharmaceutical, Textile, Food Processing, IT, Auto Components • Bhopal– Engineering, Biotechnology, Herbal, IT, Food Processing • Jabalpur– Garment, Mineral, Forest & Herbal, Food Processing • Gwalior– Electronics, IT, FMCG, Engineering, Food Processing • Rewa– Refractories, Lime Stone, Forest Based • Sagar– Mineral Processing SPECIALIZED INFRASTRUCTURE

  7. Doing Business Made Easy Through MPAKVN In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials, skilled labour andmarket potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs) scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of developed area is still untapped and open for investment. Area Developed: 2,262 Hectares Allotted: 800 Hectares Units established: 326 Major Groups: JK, Surya Roshini, Godrej, Grasim, Cadbury, Hotline, Crompton Greaves Special Infrastructure: ICD, Food Park Area Developed: 790 Hectares Allotted: 125 Hectares Units established: 52 Major Groups: Raymond, Hindustan Petroleum, PBM, Ayur Special Infrastructure: Stone Park, Food Park Area Developed: 273 Hectares Allotted: 115 Hectares Units established: 121 Major Groups: Birla, Jaypee Special Infrastructure: Integrated infrastructure development centres (IIDC) Area Developed: 1,330 Hectares Allotted: 618 Hectares Units established: 286 Major Groups:HEG, Crompton Greaves, P&G, Godrej, Lupin, IFB, Oswal, Nahar Special Infrastructure: ICD, Food Park JABALPUR AKVN REWA AKVN GWALIOR AKVN BHOPAL AKVN Area Developed: 2,492 Hectares Allotted: 1431 Hectares Units established: 575 Major Groups: Tata, Ranbaxy, Eicher, Bridgestone, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas Piramal, Indorama, IPCA, Bhilwara Special Infrastructure: SEZ, Crystal IT Park, Food Park, Apparel Park Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura Rewa, Waidhan INDORE AKVN Mandideep, Pillukhedi, Mandideep Phase II Borgaon, Maneri, Purena Pithampur, Kheda, Dewas, Maksi, Megh Nagar Source: MPSIDC

  8. Information Technology/ Information Technology Enabled Services Industry

  9. Sector Profile: IT/ ITeS Industry

  10. Information Technology: Evolving Landscape Over the last decade, India has been recognized as a major and credible Information Technology (IT) outsourcing destination the world over. The IT sector is one of the fastest growing segments of Indian industry. Indian IT/ ITeS industry continues to deliver double-digit growth over the past several years now and is expected to exceed USD 36 billion in annual revenue in FY 2005-06. The Indian IT/ ITeS industry has been growing at a CAGR of over 28%since FY 1999-2000. Over the same period, the industry’s contribution to the national GDP has risen from 1.9 per cent in 1999-2000 to a projected 4.8%in the current fiscal (2005-06). Export earnings accounted for 64% of the total IT/ ITeS aggregate in 2004-05. Strong fundamentals including a large base of skilled talent, demonstrated quality and service delivery expertise at a significant cost advantage and an enabling environment have ensured that India attracts a disproportionately larger share of the global IT/ ITeS demand for off shored services – and continues to drive India’s export-led growth. IT/ ITeS exports from India grew from USD 13.3 billion in FY 2003-04 to USD 18.2 billion in FY 2004-05. It is estimated that total IT-ITeS exports from India will exceed USD 23.9 billion in the current fiscal (FY 2005-06). Software and services exports (excluding hardware) are projected to grow at 32%in the current fiscal. The total number of IT and ITeS-BPO professionals employed in India has grown from 284,000 in 2000 to 1,287,000 in 2005-06. Source: Nasscom GROWTH DRIVERS • 100% Income Tax exemption on export profits is available to SEZ for 5 years. • Growth in sales of personal computers (PC) (3.6 Million units in 2004-05) is expected to boost the domestic demand. • Excise duty on computers and peripherals is nil. IT & ITeS industry is expected to grow to USD 148 Billion by 2012 Source: Nasscom

  11. Growing IT Sector in MP Located at the very heart of India, Madhya Pradesh is the second largest State and is easily accessible from every corner of the Country. From agriculture to natural wealth, industry, power and people, Madhya Pradesh is abounding with potentials. MP has a made a a significant progress in the last couple of years and is further paving way to be at the forefront of the IT revolution. The State has set up over 24,000 kms of optical fibre backbone to cover all its 313 developmental blocks across 45 districts (One of the highest optical fibre coverage in the Country). Four software technology parks (STP units) are in the pipeline to be setup in Bhopal, Indore and Gwalior. These parks will be equipped with all modern facilities, which are required for smoothly operating software export units, including high-speed data connectivity. The State boasts of 38 IT engineering colleges and provides a learning ground for the future IT professionals by establishing the Country’s first Indian Institute of Information Technology and Management (IIITM) at Gwalior. This is an added advantage to the investors looking to invest in the IT space in the State as there would be a wide availability of qualified and skilled professionals at a relative low manpower cost. The Government is providing various incentives/ concessions to attract investors. Major players like Taurus Microsystems and Fujitsu already have their presence in the State and are on the road to further expand their operations under the favourable industrial policies and IT initiatives by the State Government. The large IT players like HCL and Genpact are also geared up to make their establishments in the State. HCL has identified their location in the upcoming green field SEZ at Indore. Genpact India has proposed to set up a 7,000-seat BPO facility in Bhopal, with an investment of USD 34 million. The company has been allotted 50 acres of prime land near the airport in Bhopal (Bairagarh) for its BPO operations. EXPORTS The IT/ ITeS exports from MP is USD 655 million: • Software exports: USD 11 million • IT Enabled Services: USD 644 million Source: www.sezindore.com Source: www.sezindore.com Proposed investment of USD 34 million Proposed MAJOR IT PLAYERS IN MP BHOPAL INDORE SEZ

  12. Growing IT Sector in MP Software Technology Park – Indore • State of the art facility being set upon 1,00,000 sq ft of space. • Data communication facilities are available through the hi speed STPI and VSNL networks. • Fully air-conditioned space with round the clock canteen and well maintained surroundings • 100% power backup IT Park – Gwalior • IT infrastructure is being developed on 50 acres of land through private participation. • The Park is being developed as a training hub imparting advanced training for the needs of the IT industry IT Park Crystal IT Park – Indore • Developed on 21 acres of land in the heart of the business capital of M.P • 5,50,000 sq ft of space under development being commissioned shortly in the first phase Hardware & Technology Park STP Indore Hardware & Software Technology Park – Bhopal • IT infrastructure being developed on 200 acres of land near upcoming International airport • Developed plots and built up space as per international standards to be made available • Facilities for housing, entertainment, schools to be built in and around the campus of the proposed IT Park Crystal IT Park PROPOSED/ EXISTING PROJECTS IN M.P. With all the ingredients of a metro, without pollution, traffic and rapidly increasing property prices, Bhopal, Gwalior and Indore is everything about opportunity

  13. Computerization in Government Departments: e - Governance The joint study conducted by IDC & Dataquest, ranks Madhya Pradesh as the fourth leading state in India in terms of overall perceived improvement of delivery of Government Services through e-governance initiatives. Source: IDC, 2006

  14. Computerization in Government Departments: e - Governance Government of MP has laid great emphasis on computerization of the revenue generating departments and the departments with large public interface. Major e-Governance projects in the State are listed below. TRANSPORT DEPARTMENT The department has implemented computerization of its activities viz. issue of driving licenses, vehicle registration, permits etc. With Smart Card interface, on a Build Own Operate (BOO) basis, the project has been operational since January 2002 TREASURY NETWORK Department of Finance, which manages government funds through treasuries and sub treasuries, is also implementing major computerization project to automate and network with the State Headquarters. This aims to facilitate information access on-line and bringing greater transparency and efficient fiscal management of resources. Project will be operational shortly. E-KRISHI VIPNAN (EKVI) M.P. State Agriculture Marketing Board (Mandi Board) has initiated computerization of all its offices and mandis (around 230) phase wise, to facilitate e-agricultural marketing in MP Private sector company are implementing this project on a BOO Model. Presently a pilot is under implementation. LANDS RECORD DIGITALIZATION Project implemented to computerize the record of ownership of agriculture land of approximately 6.50 million landholders. It has been operational in the entire State for quite sometime now and almost all the records have been digitalized. Copies of the records are made available to the citizens, at Tehsil Offices MADHYA PRADESH TAXATION NETWORK Commercial Tax Department, the highest revenue earning department of the Government, has implemented an ambitious and comprehensive project to facilitate on line registration and filling of tax returns. Under this project, a database of all tax payers has been created and all 55 locations of the department are networked COMPUTERIZATION OF PROPERTY RECORD REGISTRATION Stamps and Registration Department, another major revenue earning department of the Government, is in the process of computerizing its operations. Software for the activity has been developed and a pilot project has also been operational. Now the department is rolling out the pilot in all its offices on BOT model MP is among a few front-ranking Indian States to use e-governance effectively in providing health services and promoting trade, business and industry. A nation-wide survey by DataQuest magazine ranks MP among leading States like Kerala, Delhi, Gujarat and Goa in the use of e-governance. The State holds first position in rendering pubic utility services through e-governance in areas such as municipal corporation, land (revenue), income tax and law. It also stood first in making proper arrangements to provide e-payment facility to the corporate sector.

  15. Emerging IT/ITeS Hubs of MP The Source: Census 2001, AICTE, Local survey, IGRS, District website

  16. MP – An Investment Destination Madhya Pradesh is poised to become the next IT destination of India through its IT infrastructure development strategy and government support to the investors. There are many significant avenues and areas that can be tapped for setting up and scaling up your business operations. To further support your business endeavors Government of Madhya Pradesh is developing specialized infrastructure in the form of SEZ Indore, IT Parks in Bhopal, Indore and Gwalior. Being an industry of economic importance, the Government also provides special fiscal and non fiscal incentives to the units in the State. COST INDICATORS FOR ESTABLISHING AND OPERATING BUSINESS IN MP* Some of the other supporting factors assisting your business would be: • Central location • Low set-up costs (Land, building etc) • Specialized infrastructure • Low operating cost • Low attrition rates • Government support etc. * Source: IBEF Reports (2005)

  17. Advantage MP Conducive environment for industry, package of incentives with investor friendly IT Policy. Because of the central location the State is well connected to the major cities in the Country through air, road and railways. Presently the government is also focusing on strengthening its road transport network. This excellent connectivity of the State is the key to all logistics related issues for the present and the potential upcoming industries. Presence of institutes of international repute like IIM (Indore), National Law University (Bhopal), IIITM (Gwalior) and a large number of engineering, management, medical and other professional courses fulfill the needs of high quality education and provide the sources of quality workforce. The cost of professional manpower is comparatively less in MP (10-15% cheaper) as compared to other industrially developed/ developing States. Despite the potential, the rate of prime land in the State is among the lowest in the Country, thereby offering an indirect advantage to the potential investors by reducing their capital investments. The law and order conditions in the State are among the best in the Country thereby making it a safe place to invest and a better place to live. SPECIAL IT INITIATIVES Madhya Pradesh has taken steps to promote IT in various aspects of governance. The State Government has prescribed various guidelines/ principles and general conditions for allowing private participation and investments in e-Governance projects for citizen services. The Government has also initiated changes in the labour laws to make them more favourable to IT industries. 24X7 working days has been cleared by the labour department. A project is currently being executed in the Dhar district of the State to leverage IT to offer value added services to the common man at the rural level. As part of this initiative, information flows and services like wholesale price, details on land records, registration of applications, public grievance redressal etc. would be made available online to the citizens of the district. The Government has signed a Memorandum of Understanding with the Reliance group for providing telecom connectivity to 7,800 kiosks across the State. *Brochure from IT Department

  18. MP – Offering Specific Incentives The State Government has announced certain incentives specific to the IT/ ITeS industry for attracting investors to the State. Following are the incentives for the IT industries in Madhya Pradesh*: 1) Employment and Land Rate Concessions • The companies in the State would be eligible for the rebate of USD 556 per job created or; • A concession on land rate at 25% of the prevalent premium on investment of USD 2.22 million and above based on following schedule: 2) Stamp Duty • Stamp duty payable by IT companies on mortgage/ hypothecation with banks/ financial institutions in IT investment area will be exempted provided the new unit is certified to be an IT outfit by a designated agency. • Stamp duty and registration fee exemption will be applicable on- sale/ lease by financial institution/ government agencies/ private sector who acquire space/ premises in IT investment area for subsequent lease to IT units provided the new unit is certified to be an IT outfit by designated agency. 3) Exemption on Tax & Acts • Exemption from factories act, maternity act, contract labour act, payment of wages act, minimum wages act, ESI act. • Exemption from the electricity duty tax, entry tax and work contract tax. * Source: Brochure

  19. MP – Offering Specific Incentives • IT units in IT investment area will be exempted from the octroi, entry tax and local bodies tax for all capital goods and raw material purchased by them. • Rate of property tax in the IT investment area will be at par with residential premises. 4) Power Related Incentives • No prior permission will be required for installation of the captive power plant. • IT industry shall e provided power through a dedicated feeder. 5) Others • Exemptions upto twice the existing FAR for entire IT investment area • All facilities and incentives declared in the new Industrial Policy of MP Government are also applicable for IT Industries established on government allotted land/ private land with the single window clearance for government formalities * Source: Brochure

  20. Way Forward With large IT players like HCL and Genpact proposing to invest in the State, and the presence of major players like Fujitsu and Taurus Microsystems, many more companies are expected to follow suite. And the increasing trend of the industry for shifting from tier I to tier II cities would result in increased IT activity, eventually leading to the overall IT/ ITeS development in the State. Hence there are increasing opportunities for IT park developers and IT companies to come and invest in Madhya Pradesh. Considering the present scenario and the momentum being gained by the industry, the State is poised to be the next IT haven of India

  21. Connecting Further Madhya Pradesh Agency For Promotion of Information Technology www.mapit.gov.in Madhya Pradesh State Electronics Development Corporation www.mpsedc.com Madhya Pradesh State Industrial Developmental Corporation www.mpsidc.com Department of Information Technology www.mit.gov.in Government of Madhya Pradesh www.mpgovt.nic.in Indore SEZ www.sezindore.com