Confederation of Indian Industry. Invest North A CII-KPMG study. Uttar Pradesh State Profile. August 2013

Transcription

1 Confederation of Indian Industry Invest North 2013 A CII-KPMG study Uttar Pradesh State Profile August 2013

2 Uttar Pradesh: a snapshot Uttar Pradesh (UP) is the biggest state economy in the northern region with a share of approximately 31 percent in the region s GDP. It is mainly driven by the services sector and within the services sector, trade, hotels, real estate, transport, storage and communications are the prominent sectors Source: Find Data website, accessed on 12 August

3 Uttar Pradesh: a snapshot (cont.) Overview Geographic and demographic indicators Geographical area (sq Km): 240,928 Total population (million): Population density (persons per sq Km): 828 Literacy rate (percent): 69.7 Economic indicators* GSDP: INR4,451.7 billion (USD81.8 billion) in FY13 compared to INR3,222.1 billion (USD80.1 billion) in FY08, CAGR of 6.7 percent GSDP composition (FY13): Agriculture (21.9 percent), Industry (23.2 percent), Services (54.9 percent) Sector-wise CAGR (FY08-FY13): Agriculture (3.0 percent), Industry (4.6 percent), Services (9.5 percent) Per capita income (FY13): INR18,891 (USD347.3) *At constant prices, GSDP and per capita income data is as of 1 August 2013, GSDP composition and sector-wise CAGR data is as of 27 February 2013 Sources: Census 2011; MOSPI; Find Data website, accessed on 12 August

4 Uttar Pradesh: a snapshot (cont.) Physical infrastructure Installed power capacity, June 2013 (MW) Road length, March 2011 (Km) No. of domestic airports, April 2013 Wireless subscribers, April 2013 (million) Wire line subscribers, April 2013 (million) Units 14, , Investment FDI: INR16.4 billion (USD351 million) during April 2000-May 2013 (This is aggregate for UP and Uttarakhand) Trend in FDI Inflow (USD million) Sources: CEA; TRAI; DIPP and CMIE; Find Data website, accessed on 12 August 2013 FY10 FY11 FY12 FY13 Note: aggregate of Uttar Pradesh and Uttarakhand FDI Source: DIPP 3

5 Uttar Pradesh: a snapshot (cont.) Opportunities Infrastructure Food Processing IT/ITeS Tourism Sugar Solar Power The State Government has announced several new policies to promote private investments across sectors including industry, infrastructure, IT, food processing, solar energy and poultry Policy Infrastructure and Industrial Investment Policy, 2012 Key highlights Envisions establishing UP as the most preferred investment destination by accelerating industrial development, creating a conducive business environment and developing high-end infrastructure facilities in order to create new employment opportunities Solar Power Policy, 2013 Aims at promoting generation and use of clean and green energy in the state by harnessing solar energy. Also, targets at stimulating private sector participation in the sector IT Policy, 2012 Aims at using IT as a vehicle for economic development of UP with inclusive growth to create a vibrant society with a high quality of life Source: Udyog Bandhu ; Find Data website, accessed on 12 August

6 Sector-wise opportunities Infrastructure Key highlights of the sector Accounts for about 9.45 percent of the total National Highway (NH) network Largest railway network in the country spanning over 8,763 Km Six domestic airports at Agra, Allahabad, Gorakhpur, Kanpur, Lucknow and Varanasi; one international airport at Lucknow 165-Km six-lane Yamuna Expressway was recently inaugurated reducing the distance significantly between New Delhi and Agra 5.14 Km long Buddh International Circuit in Greater Noida, spread across an area of 875 acres, is India s first circuit for F1 motor racing Key enablers Attractive fiscal incentives offered under the Infrastructure and Industrial Investment Policy, 2012: 100 percent stamp duty concessions given to private sector infrastructure development projects excluding PPP projects Reimbursement of 25 percent of stamp duty, if a private developer completes development of industrial estate or area within three years of purchasing land out of which at least 50 percent land is sold Sources: Udyog Bandhu; Yamunaeway.com; UP seeks fresh proposal from Jaypee on Ganga Expressway, Business Standard, 14 March

7 Sector-wise opportunities Infrastructure Key enablers (cont.) Infrastructure interest subsidy scheme: Interest on loan taken by industrial units for developing infrastructure facilities for self-use, such as road, sewer, water drainage and power line will be reimbursed at the rate of 5 percent points with a ceiling of INR10 million/annum for a maximum period of five years Established Udyog Bandhu, which is an industrial development agency to facilitate investment, operation and establishment of industrial undertakings in UP Existing companies Jaypee Group, Reliance Infrastructure, DLF, Gayatri Projects, SEW Infrastructure Success stories Jaypee Infratech Noida, UP-based Jaypee Infratech is an infrastructure development company which was founded in 2007 It has successfully developed 165 Km long six-lane access controlled Yamuna Expressway in UP connecting Noida and Agra The company has also been awarded 1,047km long Ganga Expressway Project (GEP), which will connect Greater Noida and Ballia Sources: Udyog Bandhu; Yamunaeway.com; UP seeks fresh proposal from Jaypee on Ganga Expressway, Business Standard, 14 March

8 Sector-wise opportunities Infrastructure (cont.) Sector opportunities Investment worth INR230 billion planned for 2,500 Km of state highway projects 6,730 Km identified as core network by the World Bank, of which 2,466 Km has been developed by UP Public Works Department (UPPWD) Concession agreement signed for four roads of 463 Km, costing INR38.7 billion Feasibility study has been completed and proposals for VGF are being sent to the Central Government for 11 roads of 977 Km, costing about INR71.3 billion 11 hi-tech townships and 31 integrated townships are being developed by private developers in major cities of the state One National Manufacturing Investment Zone being planned each in Jhansi and Auraiya Airports on PPP model near Agra in the vicinity of Delhi Mumbai Industrial Corridor (DMIC) to provide facility of dry-cargo transport along with aircraft maintenance hub and at Kushinagar in eastern Uttar Pradesh to promote industrial development and tourism DMIC: Immense opportunities for development of an industrial corridor along the alignment of dedicated freight line The Government of UP (GoUP) envisages Industrial Estates and Logistic Hubs along Eastern Dedicated Freight Corridor (EDFC) Source: Udyog Bandhu 7

9 Sector-wise opportunities Infrastructure (cont.) Key infrastructure projects in PPP Project Size capacity Project cost (INR billion) UP State Highways Authority Delhi-Saharanpur-Yamunotri Road (SH-57) 206 Km 17.2 Varanasi - Shaktinagar (SH-5A) 115 Km 12.1 Pallia Shahjahanpur Hardoi Lucknow Road (SH-25) Akbarpur Tanda Jaunpur Mirzapur Dudhi Road (SH-05) Km Km 18.7 Yamuna Expressway Development Authority Yamuna Expressway Construction (Noida to Agra 165 Km long) 165 Km UP Expressways Industrial Development Authority Source: Udyog Bandhu 08-Lane Access Controlled Expressway from Greater Noida to Ballia 06-Lane Access Controlled Expressway from Agra to Lucknow 08-Lane Access Controlled Expressway on the right bank of Upper Ganga Canal from Sanouta Bridge (Greater Noida) to near Purkaji (Dist Muzaffarnagar) 1,047 Km 300 na Km

10 Sector-wise opportunities Infrastructure (cont.) Key infrastructure projects in PPP (cont.) Project Size capacity Project Cost (INR billion) UP Expressways Industrial Development Authority Development of 06-Lane Access Controlled Expressway on the right bank of Upper Ganga Canal from Sanouta Bridge (Greater Noida) to Kanpur-Fatehpur Km Agra to Kanpur Access Controlled Expressway 243 Km 73.2 Jhansi-Kanpur-Lucknow-Gorakhpur to Kushinagar 08-Lane Access Controlled Expressway 626 Km Lucknow-Barabanki-Nanpara Link Expressway 133 Km 29.8 Kotdwar-Bijnor-Moradabad to Fatehgarh Access Controlled Expressway Narora to 10Km before Uttarakhand border Access Controlled Expressway 313 Km Km 28.9 UP Power Corporation Ltd. Source: Udyog Bandhu 3x660 MW Bara Thermal Power Project (Tehsil- Bara, district Allahabad) 2x660 MW Karchhna Thermal Power Project (Tehsil-Karchhna, district Allahabad) 2x660 MW Jawaharpur Thermal Power Project, district Etah 1,980 MW 115 1,320 MW ,320 MW

11 Sector-wise opportunities Infrastructure (cont.) Key infrastructure projects in PPP (cont.) Project Size capacity Project Cost (INR billion) UP Power Corporation Ltd. 3x660 MW Dopaha Thermal Power Project (Sonebhadra) 1,980 MW 120 Transport Selection of Private operators/ investors to operate stage carriage buses - 16 Source: Udyog Bandhu 10

12 Sector-wise opportunities IT/ITeS Key highlights of the sector UP is considered the IT hub of North India, contributing around 38 percent of the region s export of software and services UP figures among the top IT exporter states in India Lucknow is ranked among the top 10 cities in India for fastest job-creation and has emerged as a Science City, with numerous national level laboratories, engineering and management institutes Agra has also emerged as preferred investment location due to its world-class infrastructure and proximity to IT hubs, such as Noida and Gurgaon Software Technology Parks at Noida, Lucknow, Kanpur and Allahabad Two Export Promotion Industrial Parks (EPIPs) have been developed by UP State Industrial Development Corporation Ltd. (UPSIDC) one at Gautam Buddh Nagar on 200 acre and other at Agra on 100 acre Noida and Greater Noida have emerged as major IT/ITeS Hubs in the country with a number of Special Economic Zones and Software Technology Parks Existing companies IBM, TCS, HCL, Nasscom, Birlasoft, Wipro, Polaris, EXL, Patni, ST Microelectronics, Moser Baer and Xansa Source: Udyog Bandhu; Press articles 11

13 Sector-wise opportunities IT/ITeS (cont.) Key enablers Attractive fiscal incentives offered under the new Information Technology Policy 2012: Interest subsidy on term loans and working capital loans from the date of commencement of commercial operations Exemption of stamp duty on purchase/lease of land/office space/ buildings for IT/ITeS in Tier II/Tier III cities IT/ITeS projects being setup in Tier II and Tier III cities provided land at a rebate of 25 percent on the prevailing sector rates, on purchase of land from state agencies Registered IT units established in IT cities, Technology Parks, Software Technology Parks are allowed 100 percent additional floor space index (FSI) on the allowable FSI up to a maximum of the FSI allowed for Residential/Office purposes (whichever is more) in Tier II/Tier III cities Permission to IT/BPO units which employ between 20 and 50 persons to establish unit anywhere irrespective of the master plan or land use classification, barring specific land usage Industrial promotion subsidy equivalent to 50 percent of the incentives admissible for new units (except rebate on land purchased from state agencies), admissible to the existing units Source: Udyog Bandhu 12

14 Sector-wise opportunities IT/ITeS (cont.) Sector opportunities Availability of highly skilled manpower for IT/ITeS industry premier institutes including IIT Kanpur, IIM Lucknow, IIIT Allahabad, IMT Ghaziabad, C-DAC Noida and IT-BHU are located in the state The UP Government is planning a 100-acre IT City, which would come up on Lucknow- Sultanpur highway The IT park project in Lucknow is proposed to be developed at an estimated cost of INR2,850 million on an area of approximately 130,000 sq meter by Lucknow Industrial Development Authority (LIDA) Success stories HCL Technologies One of the pioneers in the Indian IT space, the company delivers end-to-end IT solutions across applications and infrastructure It has a network of offices in 31 countries and 10 offices of the company, including the global headquarter, which is located at Noida in UP Source: Udyog Bandhu 13

15 Sector-wise opportunities Food processing Sources: Udyog Bandhu; Press articles Key highlights of the sector Abundant raw material as UP dominates India s agricultural production, accounting for about 20 percent, 34 percent, 19 percent and 30 percent of food grain, wheat, fruits and vegetables, respectively, produced in the country Largest livestock population in the country and tops in milk production UP is the largest producer of sugarcane, accounting for 35 percent of total production and ranks second in the production of sugar It has four Agri Export Zones for Potatoes, Mangoes, Vegetables and Basmati rice Sector opportunities 2,101 agriculture marketing hubs being set up for grain storage, farmer service centers, banks and primary processing units costing INR3.5 billion With a population of 200 million, UP offers the largest market for consumption of food products Huge opportunity exists as currently only 2 percent of total produce of fruits and vegetables is commercially processed Presence of relatively low-cost skilled workforce Favorable policy environment 14

16 Sector-wise opportunities Food processing (cont.) Key enablers Attractive fiscal incentives offered under the new Food Processing Policy 2012: 100 percent exemption from stamp duty on purchase, lease or acquisition of land by new food processing industrial units anywhere in the state 100 percent exemption from Mandi fee to new export oriented units using perishables Interest subsidy on the loan taken for plant, machinery and spare parts by new food processing units in the state Capital investment subsidy on the cost of plant, machinery and technical civil works for setting up, expansion and modernization/ up-gradation of the food processing industrial units Capital investment subsidy for setting up of integrated cold chain and processing infrastructure for non-horticultural produce under the National Food Processing Mission Assistance for global competitiveness, quality and standardization Assistance for market development to new units Implementation of warehouse receipt system for availing the loan facility on the issued receipts by the accredited Warehouse under Warehouse Act Sound infrastructure Four Agri Export Zones for Potatoes, Mangoes, Vegetables and Basmati rice Mega Food Park at Jagdishpur envisioned under the new Industrial Policy Source: Udyog Bandhu 15

17 Sector-wise opportunities Food processing (cont.) Existing companies Coca Cola, Pepsico, ITC, Dabur, Paras, Parle Agro, Cargill, Goldiee, JVL, Priyagold and Heinz Success stories Dabur India Ltd. Ghaziabad, UP-based Dabur India is among the top 4-5 FMCG companies in India with a turnover of INR52.8 billion in FY12. The company manufactures a wide range of products in healthcare, personal care and food It has a strong presence in UP Source: Udyog Bandhu 16

18 Sector-wise opportunities Manufacturing Key highlights of the sector Manufacturing sector of Uttar Pradesh grew at a CAGR of 3.5 percent during FY08-FY13 Industrial investment in Uttar Pradesh grew at a CAGR of percent during FY08-FY12 Capital investment in heavy industries rose from INR50.5 billion in FY11 to INR193.1 billion in FY12 Uttar Pradesh ranks third in terms of number of micro small and medium enterprises (MSMEs) in India 175,000 MSME units set up during the 11 th Five Year Plan with a total investment of INR220 billion In FY12, 33,532 small scale industries (SSIs) were established with an investment of INR34.5 billion Sources: MOSPI, Udyog Bandhu; Press articles 17

19 Sector-wise opportunities Manufacturing (cont.) Source: Udyog Bandhu Key enablers Proactive investor facilitation through Udyog Bandhu and Nivesh Mitra Availability of skilled/semi-skilled and traditionally skilled manpower net exporter to other states in India Rapidly improving physical connectivity - new expressways, power projects and international airports Highly attractive Infrastructure and Industrial Investment Policy 2012 which offers a number of fiscal incentives, such as 100 percent exemption from stamp duty to industrial units in all sectors on purchase, lease or acquisition of land in Eastern UP, Central UP and Bundelkhand region Exemption from entry tax and other taxes Capital interest subsidy scheme: Interest on loan taken for plant and machinery by new industrial units set up in Eastern UP, Central UP and Bundelkhand, reimbursed at 5 percentage points with a ceiling of INR5 million per annum for a maximum period of 5 years Industrial quality development subsidy scheme: Interest on loan taken by industrial association, group of industrial units for establishing testing labs, quality certification lab, tool rooms, etc. reimbursed at 5 percentage points with a ceiling of INR10 million per annum for a maximum period of 5 years Exemption from Electricity Duty for 10 years to new industrial units and to captive power generating units for own consumption Investment Promotion Scheme: Interest-free loan equivalent to value added tax and central sales tax paid by industrial units or 10 percent of the annual turnover whichever is less provided for 10 years and repayable after 7 years from the date of first disbursement 18

20 Sector-wise opportunities Manufacturing (cont.) Sector opportunities Large consumer base of 200 million with growing per capita income Proposed industrial infrastructure: Plastic City at Auraiya; Leather Mega Cluster at Kanpur, Agra, Hardoi; Integrated Dairy Park at Lucknow; Mega Food Park at Jagdishpur; Textile Park at Fatehpur Key growth and opportunity segments in Uttar Pradesh Source: Udyog Bandhu Segment Engineering Goods Leather Key strengths and opportunity areas Noida and Ghaziabad are home to several original equipment manufacturers (OEMs) and auto component suppliers Centre of National Automotive Testing and R&D Infrastructure Project (NATRIP) is being set up A centre for providing complete homolocation service to agri-tractors, off-road vehicles, diesel generation sets as per Indian and global standards Second largest producer after Tamil Nadu Contributes about 28 percent to India s total exports of leather and leather products Over 900 acres of land sanctioned for setting up two Leather Parks in Sandila (District Hardoi) and at Ramaipur (District Kanpur) which will attract an estimated investment of INR20 billion Kanpur and Agra are notified as Towns of Export Excellence for leather products Multi level skill development centre at a total project cost of INR92.4 million and testing laboratory in Kanpur at a project cost of INR97.6 million are planned by the Council for Leather Exports at Kanpur Footwear Design and Development Institute (at Noida) a one stop solution provider for footwear, leather products and allied industries 19

21 Sector-wise opportunities Manufacturing (cont.) Sector opportunities (cont.) Key growth and opportunity segments in Uttar Pradesh Segment Key Strengths and Opportunity areas Sugar Second largest sugar producer of India accounting for about 28 percent of total output Easy access to raw material and huge potential of establishing new units in Eastern UP Huge demand for by products Conducive policy support to harness the sector s high potential Cement Textiles Existing companies Ninth largest in production of cement with production of 7.05 million tones per annum Abundant availability of raw material in Bundelkhand area ideal for setting up cement manufacturing plants Major investments by leading groups for establishing new cement plants and expansion of existing plants The state offers complete range of handloom products like home furnishing, floor coverings, bed covers, bed sheets and dress material and a vast range of woven and printed saris made of cotton and silk Accounts for approximately 5.6 percent share of total weaving units in handloom sector in India Mirzapur and Bhadohi are major centers for the production of carpet floor coverings and account for approximately INR20 billion of export Source: Udyog Bandhu 20

22 Sector-wise opportunities Manufacturing (cont.) Sector opportunities (cont.) Key growth and opportunity segments in Uttar Pradesh Segment Key Strengths and Opportunity areas Chemicals and Fertilizers Produces approximately 6 percent of India s total production of Chemicals Home to some of the major chemical manufacturers, such as Tata Chemicals, Kanoria Chemicals and Jubilant Life Sciences Abundant availability of raw material for production of fertilizers in Bundelkhand area Rock phosphate found in Lalitpur is sold as a direct fertilizer and used as raw material for phosphorus plants Existing companies Reliance, Tata Motors, Coca Cola, Honda, Pepsico, ACC Ltd., Dabur, Jubilant Life Sciences, Denso etc. Success stories ACC Ltd. ACC, one of the largest manufacturers of cement and concrete in India, has 16 cement factories and more than 40 ready mix concrete plants Source: Udyog Bandhu Its plant is located at Tikaria in Uttar Pradesh 21

23 Key projects specific investment opportunities Agra to Lucknow access controlled expressway project Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) has been nominated as the nodal agency for the development of this project The expressway will start from proposed Agra Ring Road and end at proposed Lucknow Ring Road; It will reduce the distance between Lucknow and Agra to 270 Km from the current 335 Km Concept report has been prepared and the request for quote/request for proposal (RFQ/RFP) is expected to be floated by the middle of 2013 The expressway is proposed to be linked through Link Expressways from existing and potential commercial/agricultural hubs, such as Firozabad, Shikohabad, Etawah, Kannauj and Malihabad Potato flakes and potato based Vodka manufacturing The state tops in the production of potatoes accounting for 34 percent share in the country s potato output A plant has already been established near Hapur for potato flakes manufacturing The State Government is planning to incentivize potato-based vodka manufacturing keeping in view its huge potential A major distillery is in the process of establishing a vodka manufacturing plant near Rampur Sources: Udyog Bandhu ; Press articles 22

24 Key projects specific investment opportunities (cont.) Noida and Lucknow Metro rail 29.5 Km long rail link on the Noida-Greater Noida route from Noida City Centre to Boraki to be developed by 2017 at an estimated cost of INR50 billion The State Government has approved the formation of special purpose vehicle (SPV) Noida Metro Rail Company to implement the project The UP Cabinet has also given its approval to the first phase of 23 Km-long Lucknow Metro Project, which is estimated to be completed by March 2018 The first phase of the project to cost around INR70 billion For this also, an SPV Lucknow Metro Rail Corporation will be formed The UP Government is planning a 100-acre IT City on Lucknow-Sultanpur highway Information Technology City, Lucknow The proposed city will be built on about 100 acres of government land at Gajaria farms on Sultanpur Road in Lucknow Sources: Udyog Bandhu; Press articles 23

25 Key projects specific investment opportunities (cont.) Plastic City Dibiyapur (Auraiya) 100 acre at Auraiya district First Plastic City project of UP, to be developed through PPP MoU signed with GAIL for smooth supply of raw material 200 MW power plant being built adjacent to the site Excellent Railway Connectivity Excellent Road connectivity to major cities like Agra, Lucknow, Kanpur, Gwalior Export Promotion Industrial Park Agra 102 acre land at a cost of INR 21 cr for setting up export oriented units Construction activities on allotted plots ( ~80% ) Greater Noida Over 200 acre land Infrastructure facilities at par with international standards Sources: Udyog Bandhu; Press articles Production & exports commenced in 4 units. Construction of factory building in 11 units 24

26 Initiatives undertaken and projects underway Tourism An international airport at Kushinagar under PPP mode is underway Lucknow Haat building under construction An international airport at Agra to be ready by 2017 INR1.4 billion allocated to develop an area near the Taj The World Bank has approved USD410 million project to develop pro-poor tourism in Braj- Mathura and the Buddhist circuits Residential and urban planning Under Sabke Liye Awas Yojana, State Government to provide 40,000 residential plots and houses An international centre, Jaiprakash Narayan International Centre, to come up in Lucknow Metro rail network for Lucknow has also been approved Several development projects worth INR33.4 billion underway in Noida, Greater Noida and Yamuna Expressway With a Sewage treatment plant to treat 100 percent produced sewage, Noida has become the first city of its kind Source: Rail Bandhu, June 2013 The World Bank has extended a loan facility to implement the Uttar Pradesh State Road Project 25

27 Initiatives undertaken and projects underway (cont.) Agriculture Seeds, urea and pesticides provided to farmers during rabi season at a pre-determined price A scheme, Bhoomi Sena Yojana introduced to enable farmers convert their flood-affected, barren, unproductive land for agriculture use Conducted program, Apni Mitti Pehchane, to discuss fertilizer quantity to be used Distributed Kisan Credit Cards to farmers Markets created at every 10 Km for enabling easy purchase and sale of agricultural produce Under the Janeshwar Mishra Gramya Yojana and development works, over 1,000 villages selected and allotted more than INR2.5 million each Work under progress Agra inner ring road Ghaziabad northern peripheral road Four-lane highways to connect district headquarters Plans to develop Food park in Jagdishpur Plastic city in Auraiya Agro park in Shahjahanpur Agra and Kushinagar international airports - Source: Rail Bandhu, June

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