Title: Madhya Pradesh: Means Business
1 Madhya Pradesh Means Business
Information Technology/ Information Technology
Enabled Services
2Overview
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 - Indias 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 (MPs 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)
3Enabling 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
4Madhya 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.
Indias 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
5MP 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 (Reference RK Swamy)
- Distances rounded off
Source India Today (September 06 Issue)
6Industrial 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 _at_ 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
7Doing 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 and market
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 273 Hectares Allotted 115
Hectares Units established 121 Major Groups
Birla, Jaypee Special Infrastructure Integrated
infrastructure development centres (IIDC)
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 1,330 Hectares Allotted 618
Hectares Units established 286 Major GroupsHEG,
Crompton Greaves, PG, Godrej, Lupin, IFB, Oswal,
Nahar Special Infrastructure ICD, Food Park
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA 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
8Information Technology/ Information Technology
Enabled Services Industry
9Sector Profile IT/ ITeS Industry
10Information 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 industrys 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 Indias 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
11Growing 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 Countrys 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
12Growing 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
13Computerization 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
14Computerization 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.
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.
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
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
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
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
- 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.
15Emerging IT/ITeS Hubs of MP
The
Source Census 2001, AICTE, Local survey, IGRS,
District website
16MP 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)
17Advantage 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
18MP 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
19MP 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
20Way 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
21Connecting 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