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Madhya Pradesh: Means Business

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Title: Madhya Pradesh: Means Business


1
Madhya Pradesh Means Business
Information Technology/ Information Technology
Enabled Services
2
Overview
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)
3
Enabling 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
4
Madhya 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
5
MP 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)
6
Industrial 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
7
Doing 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
8
Information Technology/ Information Technology
Enabled Services Industry
9
Sector Profile IT/ ITeS Industry
10
Information 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
11
Growing 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
12
Growing 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
13
Computerization 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
14
Computerization 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.

15
Emerging IT/ITeS Hubs of MP
The
Source Census 2001, AICTE, Local survey, IGRS,
District website
16
MP 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)
17
Advantage 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
18
MP 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
19
MP 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
20
Way 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
21
Connecting 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
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