• Top Stories

There is no getting away from Vibrant Gujarat. As soon as one lands at the Ahmedabad airport, one is greeted with ‘Vibrant Gujarat’ banners all around.

Statistics

Branding and marketing has been a key philosophy of the state and it has come up trumps as Gujarat logs a Gross State Domestic Product (GSDP) of Rs.3,372 billion and a GSDR growth rate of 10.23 percent in 2009-2010. While its per capita income stands at Rs.49,030, the state is a highly industrialized one with 38 percent of GDP contribution coming from the secondary sectors. While the state can boast o the highest number of investor proposals in the country, it also accounts for 22 percent of India’s exports.

On the infrastructure front, the state boast of 24-hour electricity across urban and rural areas and also a state-wide gas and water grid, with a network of over 2,200 km. This is on the back of the large natural reserve of oil and gas in the state. A reserve of 725 million tones of crude and 1,055 billion cubic meters of natural gas is present in the state. It produces the highest amount of crude oil (5.9 million tones) in India and the second largest producer of onshore natural gas (2.6 billion cubic meters) in India.

Agriculture

Agriculture in Gujarat accounts for about 12 percent of the state’s GDP, about two percentage point less than the share of this sector as a whole. However, the growth pattern of agriculture in the state has been very volatile. Over the previous few years there have been years of negative growth, interspersed with strong positive growth where rates have been in excess of 20 percent. According to a report by Crisil and the government of Gujarat, such volatility is always a burden on farmers, apart from creating income uncertainty and rendering rural households vulnerable to periods of significant deprivation, it deters investment, which could have contributed to raising productivity.

Things are, however, likely to change as the Narmada Project takes shape and irrigation improves substantially. The project, according to Gujarat Industrial Development Board (GIDB), is expected to provide water and irrigation to large parts of South Gujarat and Saurashtra. The improving water scenario will mean widening of the irrigation network, which will mean growth rate in the sector will remain well above its historical level and also significantly lower the band in which the annual rate fluctuates.

Industry

Gujarat is one of the most industrial states in the country and can boast of a wide range of industry. From petrochemicals to gems and jewelry to machinery to the latest big ticket investments from the auto sector, all are present in the state today. Industries share of to the state GDP is at about 40.67 percent compared to the India share of 28.08 percent. Much of this has been because of the historical advantages it has enjoyed since the days when textile was a big industry n the state, business friendly policies, proactive politicians and beauracrats, good implementations of policies, and a long coastline, has contributed to this status.

According to GIDB, large investment in ports as well as supporting investment in infrastructure and facilities will provide an attractive investment opportunity to companies and entrepreneurs who either import their inputs or export their products. Several big ticket infrastructure projects are expected to give a bigger push to the state’s industrialization drive. Several Special Investment Regions (SIR) have sprung up under the ambit of Gujarat Industrial Development Corporation. The largest amongst them is the SIR at Anjar with 690 square km with units like Welspun and Adani operating in the vicinity.

The most ambitious drive towards industrialization is the Dahej Petroleum, Chemical and Petrochemical Investment Region (PCPIR). Spread across 453 square km the area has seen investments to the tune of Rs.90,000 crore and infrastructure development worth Rs.3,200 crore. The region will now see new roads linking it to Ahmedabad and Vadodara come up, a green field airport for PCPIR, 40MMTPA port by Sandasara Group, marine shipbuilding part, Ro-Ro ferry service and common user jetty by GMB at an investment of Rs.250 crore, 1500 MW gas based power plant by Torrent Power, 2640 MW coal based power plant by Adani Group, and a 80 hectare chemical logistic park amongst many plans.

The region today provides direct employment to 13,220 persons and indirect employment to 46,270 persons. The new units are expected to provide additional employment to 30,000 people and indirect employment to 90,000. The companies which operate in this region today are Reliance Industries, ONGC, Hindalco, Gail, Petronet LNG, Adani Group amongst others.

Services

Services as a sector have lagged behind in the state when compared to the industry. Gujarat’s services sector accounts for 47.20 percent of states GDP, lower than services share for the country at 57.3 percent. According to Crisil, the gap is quite significant and has widened slightly over time, indicating that services have been growing in Gujarat at a slightly lower rate than the country as a whole. The report says that given Gujarat’s comparative advantage in the manufacturing sector, it is not surprising that services have lagged behind.

According to its vision documents for 2020, Gujarat is expected to give a major push towards tourism, education, health and IT. In the tourism segment, it hopes to pump in about Rs.48, 656 crore and promote archeological sites of the Mohenjodaro and Harappan era along with wildlife sanctuaries, Rann of Kutch and several religious places.

In the education space, the state is expected to start work on developing two knowledge corridors, a policy for private sector participation in higher and technical education, maritime university, retail management university, Biotechnology University and many others at an investment of about Rs.15, 879 crore. IT, as a sector, will get an investment of Rs.4,300 crore in setting up IT parks, BPO and KPOs.

©Entrepreneur December 2011

Tags:
Gujarat, industry, infrastructure, Vibrant Gujarat