Industrial Scenario of Madhya Pradesh

Madhya Pradesh, a state in the heart of India is the 2nd  largest state by area and one of the fastest growing states with annual GSDP growth at 8% CAGR over the last decade.

Madhya Pradesh government has worked diligently over the past decade to develop the state as an industrial hub and promote it as a potential investment destination.

The state government has made an investment of more than $15.4 billion in support infrastructure in the last five years. The state has good connectivity to large markets and major metro cities such as New Delhi, Mumbai, Ahmedabad, Hyderabad and Kolkata.

MP possesses a road network of 160,000 KM, 455 trains passes through the state daily besides its air connectivity with major tier 1 cities in the country. To overcome the problem of land-lockedness, State has established 6 Inland Container Depots (ICDs).

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State falls under influence area of Delhi Mumbai Industrial Corridor (DMIC) and has developed industrial and investment regions like Pithampur-Dhar- Mhow, Ratlam-Nagda, Shajapur-Dewas and Neemach-Nayagaon along the corridor.

State hosts one of the twelve Japanese Industrial Townships to be established in India, as envisioned under "The India Japan Investment Promotion Partnership" at Pithampur, Indore. Additionally, State has also developed an Industrial Township specifically focused on South East and Far East Asian investors. State is developing four investment corridors (Bhopal-Indore, Bhopal-Bina, Jabalpur-Katni- Satni-Singrauli, Morena-Gwalior- Shivpuri-Guna) to promote industrial development and employment opportunities.

Madhya Pradesh is a leading producer of minerals in India with major production in Manganese, Copper, Glass, Limestone, etc. and is the only state in India with diamond reserves. It has over 8% of the total Coal reserves of India and 1,434 billion cubic meters coal-bed methane. State government is promoting sustainable utilization of resources to promote industrial development.

Madhya Pradesh has all of the 11 agro climatic zones of the country. The state ranks first in producing soybean, pulses, grams, garlic, etc. and is 2nd largest producer of wheat, maize and Green peas. Madhya Pradesh is one of the leading states in growing banana, orange, guava, mango and lemon fruits. The state contributes over 40% share to India's total organic farming and as per a report published by DACFW, Government of India, Horticulture productivity/hectare is higher in MP than India's national average.

The state contributes the maximum forest cover to the total forest area of the country, nearly 94,689.38 sq. KM. Medicinal plants of around 2,200 varieties are available in Madhya Pradesh forest. The state has 14 per cent 'pashudhan' (cattle wealth) of the country which contributes nearly 10 percent to the to the total milk production of the country.

State has 1,20,000 acres of industrial land bank including 40,000 acres of developed area. Over the last years it has developed SEZs and sector specific parks like SEZ Pithampur, Crystal IT park, Plastic park in Tamot and Gwalior, Logistics park Shivpuri, Vikram Udyogpuri, Ujjain, Spice park, Chhindwara, among other. Additionally, one multi-product SEZ is proposed in Chhindwara. Abundant Technical and Skilled Manpower is available in the state to support the industries. The State is home to several premier national institutes like AIIMS, IIT, IIM, NIFT, NID, NLIU, IIITM and CIPET. Also, it is home to ~45 Universities including Central, State and Private universities. Around One lakh manpower (technical experts) join workforce from these colleges every year in the state. Madhya Pradesh is also rich in culture and tourism. Tourism sites like Khajuraho, Bhimbaithika and Sanchi have been recognised as world heritage centres. Kanha, Bandhavgarh, Pench, Panna and Shivpuri are famous tiger reserves and have various other animals, also. Pachmarhi, Amarkantak and Tamia are some other major tourism destinations of the State. Tourism department has also taken initiative to promote tourism using various islands in the state like Hanuwantiya, Madhya Dweep and Sailani islands. It host India's only and largest water carnival, Jal Mahotsav, every year. The state is leader in textile manufacturing, automobiles, food processing, engineering and agriculture equipment manufacturing. The peaceful manpower of the State is an added advantage for industrial development. All the above mentioned factors pave the way for the Madhya Pradesh to become a developed state.

According to report released by RBI, Madhya Pradesh secured fifth position garnering 7.2 per cent share in industrial investments.

Over the last decade Madhya Pradesh has witnessed a radical transformation in terms of economic and social development. The same is attributable to stable government, supplemented by creation of a robust support infrastructure in terms of roads, water supply, irrigation capacity and a 24x7 power supply.

Madhya Pradesh stands 5th among Indian states in ease of doing business ranking conducted by World Bank and DIPP.

Investment in Large and Medium Industries
S. NO. FINANCIAL YEAR NO. OF UNITS INVESTMENT IN CRORES – INR EMPLOYMENT
1 2011-2012 8 13,616.1 (136.1 billion) 3, 507
2 2012-2013 13 1,011.46 (10.1 billion) 2, 406
3 2013-2014 20 12,978 (12.9 billion) 6, 190
4 2014-2015 21 5,974 (59.7 billion) 7, 324
5 2015-2016 15 1,510.8 (15.1 billion) 2, 664
TOTAL 77 35,090.36 (340.9 billion) 22, 091
Data from MPforest.org
Data from nddb.org

Prominent industrial hubs such as Mandideep, Pithampur, Dewas, Malanpur and Pilukhedi have witnessed significant growth in export business. The export business of Pithampur SEZ in the state was estimated at INR 4,000 crores (40 billion) in the year 2014-15 and INR 4,950 crores (49.5 billion) in the year 2015-16.

SEZ: Madhya Pradesh has India's 1st green-field SEZ in Pithampur which covers total area of 1,114 Hectare and is located 35 km from the city of Indore. A total of 49 industrial units have been established in Pithampur while 6 are upcoming. Total investment made in Pithampur SEZ is approximately INR 4,190 crores (41.9 billion), export business done till last year was approximately INR 12,300 crores (123 billion) and SEZ generated an employment of around 16,000.

Export Infrastructure in the state has been promoted thorough various schemes like Assistance to States for Infrastructure Development of Exports scheme (ASIDE) and Trade Infrastructure for Export Scheme (TIES). This has led to infrastructure development of parks and corridors like Pithampur Auto Cluster, water supply project in Dewas, Pithampur-Dhar- Mhow and Ratlam - Nagda as mega industrial region, Dewas-Shajapur and Neemuch-Nayagaon etc.

Data from SEZ wise export figures in Indiastat.com

With continuous efforts of the State government, 2,630 intentions for setting of various industries were received by GoMP from October 2014 to October 2016 amounting to INR 5,62,847 crores (5628.4 billion). Out of these, 397 projects amounting to INR 1,37,855 crores (1378.5 billion) are under various stages of production and 127 projects with more than 10,000 crore – INR 10,000 crore (100 billion) investment have achieved commercial production.

To encourage investments and bring transparency, the State Government introduced a number of new/amended policies. IT Policy 2016, Tourism Policy 2016, Healthcare Policy 2016, Technical Education and Skill Development Policy 2012, Warehousing and Logistics Policy 2012, Wind Power and Solar Power Policy, Industrial Facilitation Act 2008 and Madhya Pradesh Land and Building Management Policy 2009 have been issues, Industry promotion Policy 2014 has been revised 2017 amendment has been introduced.

State Government has passed Madhya Pradesh State Investment Facilitation Act 2008 to simplify the rules and give clearances to various projects coming up in the State. Under the provisions of this Act the following empowered committees have been constituted for facilitation of new investment by simplifying the regulatory frame work, reducing procedural requirements and rationalizing documentation and to provide for friendly environment to an investor in the State.

  • Apex Level Investment Promotion Empowered Committee headed by Chief Minister of State for Mega Project.
  • State Level Investment Empowered Committee headed by Industry Minister.
  • District Level Investment Empowered Committee headed by Collector of the concerned district.

Beside these committees State Government has developed a single table concept by the constituting Project Clearance and Implementation Board headed by the Chief Secretary to given clearance to the projects coming up in the State.

Under the provision of Madhya Pradesh Investment Facilitation Act 2008 Combined Application Form (CAF) for all necessary clearance/approvals has also been introduced. Investment proposals under the provisions of above Act are disposed of in specified time limit with the special focus on self-certification.

A fast track facilitation and escort service for common application filling pertaining the following departments

  • Revenue
  • Commercial taxes
  • Labour
  • Energy
  • Housing and Environment
  • Urban Administration and Development
  • Panchayat and Rural Development
  • Food and Drug Administration

The Empowered Apex Level Committee is headed by the Chief Minister. The minister for Commerce, Industry and Employment, Vice Chairman, Minister for Finance, Minister for Commercial Tax and Chief Secretary are the Members of the committee. This committee has the powers at par with that of cabinet committee on Economic Affairs. Obtaining customized economic assistance package from empowered committee.

State Government has constituted Project Clearance and Implementation Board (PCIB) under the Chairmanship of Chief Secretary in which 'in-principle' sanctions are given for projects related to industries, services and infrastructure and the problems are solved regarding implementation of the projects. In this Committee, Principal Secretaries/Secretaries of related departments is members. PCIB has the powers of allotment of barren land, approval and land allotment for tourism related projects and to recommend the proposals of SEZ to the Board of Approvals, Government of India. The Board is scheduled to meet twice a month.

State government has revised its Industrial promotion policy Post GST Implementation by the central government. Under earlier policy industries were being offered exemption and subsidy on CST, VAT and Entry fee whereas under new policy incentives have been de-linked from tax. Now, large industries will be incentivised 10% to 40% of the capital investment they make Plant & Machinery.

Madhya Pradesh has emerged as a major investment destination with presence of major industries.

Automobile and Engineering

 

Agri-business Food Processing

 
 

IT and ITES

 
 

Pharmaceuticals

 
 

Renewable Energy

 
 

Textile

 

Madhya Pradesh has India's 1st green-field SEZ in Pithampur which covers total area of 1,114 Hectare and is located 35 km from the city of Indore. A total of 49 industrial units have been established in Pithampur while 6 are upcoming. Total investment made in Pithampur SEZ is approximately INR 4,190 crores (41.9 billion), export business done till last year from the SEZ was approximately INR 12,300 crores (123 billion) and total employment generated is around 16,000.

Apart from Pithampur SEZ state has 4 IT SEZ, one Government's Crystal IT Park in Indore and three private operated SEZs - Infosys, TCS and Impetus, all in Indore. One more multi-purpose SEZ is proposed in Chhindwara.

Madhya Pradesh government has worked diligently to make investments for improvement of industrial infrastructure in the state. This has resulted in development of industrial corridors such as Bhopal-Indore, Bhopal-Bina, Jabalpur-Katni- Satni-Singrauli, Morena-Gwalior- Shivpuri-Guna and various sector specific parks in the state. Some of the major infrastructure development projects under taken by government are following:

  • Special Economic Zone, Pithampur
  • Japanese Industrial Township, Pithampur
  • SEFEAN Industrial Township, Pithampur
  • Crystal IT Park, Indore
  • Plastic Park in Tamot and Gwalior
  • Industrial Areas in Kiratpur, Mohasa, Shivpuri and Sitapur
  • Vikram Udyogpuri, Ujjain
  • Smart Industrial Park, Padora, Shivpuri
  • Integrated Industrial Township, Polaykalan

Investment Promotion Assistance: Tax delinked investment assistance ranging from INR 4 crore ( 40 million) to INR 270 crores (2.7 billion) based on the amount of investment in plant and machinery, with 1.5 times incentive for food processing industry. Policy is applicable for industry with commencement of production from 1st April 2018 to 31st March 2022

Other Key Highlights of GoMP Industrial Promotion Policy:

  • Mandi Fee Exemption is provided for food processing industry
  • Interest Subsidy for Textile Industry : 5% to 7%
  • Electricity Duty Exemption : 5 to 10 years for HT connection by a DISCOM
  • Rebate on Power tariff : INR 1 per unit for a period of 5 years
  • Green Industrialization Assistance
  • Assistance to Industrial Parks : Maximum of INR 5 Crore
  • Infrastructure Development Assistance : 50% assistance or INR 1 Crore subject to a maximum of INR 3 crore for developing power, water & road infrastructure, on private land or undeveloped government land