Investment and Industrial Climate in Uttar Pradesh

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Investment and Industrial Climate in Uttar Pradesh

• Dr Arvind Mohan

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THE GROWTH PATTERN
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Comparison of GSDP growth rates UP v/s other
states
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Comparison of Industrial growth UP v/s other
states
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INVESTMENT
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Inter-state comparison of investment
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During 1990s
92 OF THE TOTAL INVESTMENT WAS IN HEAVY AND
MEDIUM INDUSTRY

• CONCENTRATED IN
• CHEMICAL CHEM PRODUCTS
• TRANSPORT
• METAL PRODUCTS
• FERTILISER
• TELECOMMUNICATION

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SSI SECTOR ATTRACTS ONLY 8.41 OF THE TOTAL
INVESTMENT

• CONCENTRATED IN
• FERTILISERS
• METAL PRODUCTS
• CHEMICAL AND CHEMICAL PRODUCTS
• MACHINE AND EQUIPMENTS
• RUBBER PLASTIC

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55 OF THE SSI INVESTMENT CONCENTRATED IN 15
DISTRICTS
87 OF HEAVY AND MEDIUM INDUSTRY INVESTMENT WAS
CONCENTRATED IN 16 DISTRICTS
65 OF SSI UNITS HAVE LESS THAN Rs 1 LAC
INVESTMENT AND 93 HAVE LESS THAN Rs 5 LAC
INVESTMENT
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PROFIT AS OF PRODUCTION
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PROFIT AS OF INVESTMENT
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Key completed investments in UP (2002-2005) by
disrict
Large proportion of all Greenfield investment
all foreign investment
Brownfield expansions of existing investors
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BOTTLENECKS/ OBSTACLES
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Private sectors ranking of investment climate
bottlenecks (UP)
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Main Investment Climate Obstacles, Ranked by
Sector
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THE ENERGY CHALENGE
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ACCESS TO LAND
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Cost of Registering Property Across India
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Time in Registering Property Across India
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APPROVALS, INSPECTIONS AND TAXES
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• Types of Clearances Required to Set Up an
  Industrial Unit in UP
• First-phase approvals/No-objections/Sanctions/Lice
  nses etc. required prior to setting up a unit
• Provisional registration of SSI
• Land allotment
• NOC from Pollution Control Board
• Land-use permission
• NOC under Land Ceiling Act
• Building map approval
• Provisional registration of Trade tax
• Electric connection for construction
• NOC for license under Drug Cosmetic Act
• Power sanction
• NOC from Forest Department
• Assurance for allotment by Excise Department
• High Speed Diesel (HSD) storage permission/No
  objection from District Magistrate

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• Second-Phase Approvals/No-objections/ Licenses
  etc. required before starting operations
• Permanent registration of SSI
• Consent from Pollution Control Board
• Permanent registration of Trade Tax
• Registration under Factories Act
• Registration under Shops and Commercial
  Establishment Act
• NOC from Electrical Safety Directorate
• Trade-tax exemption/deferment
• License from Food Department
• License under Drugs Cosmetics Act
• Excise License (UP)
• Note All of the above may not be necessary for
  every unit.

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Impact of Corruption, by Firm Size, 2006
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Tax Payment in India OECD, No. of Payments,
Time Needed, Rate
World Bank 2007a
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Time and cost of contract enforcement
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Time and cost of insolvency proceedings
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CONCLUDING REMARKS

• UP is a sleeping giant, Waking it up is an idea
  whose time has come
• Industrial And Investment Climate Is
  Intrinsically Dependant On Improved Power
  Scenario.
• For Government it is a responsibility
  extraordinary
• For Private Sector it is an opportunity
  extraordinary
• Coincidence of interest makes them natural co
  travelers
• The challenges highlighted are certainly
  surmountable. Reduction In The Number Of
  Inspections in a Short span suggests Governments
  intent.
• An Improved Public Private Dialogue has the
  potential for sorting out most of the issues and
  Transforming UP into UTTAM PRADESH

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THANKSfor agreeing to be co travelers