Gujarat - Investment and Industrial Policies
Economic reform process has provided a boost to the efforts of the State towards rapid industrialisation. In terms of new investments, Gujarat is amongst the top States in the country. The State has so far attracted major investments in sectors like Chemical and Petro Chemicals, Engineering, Pharmaceuticals, Dyes & Chemicals, etc. Investment in agro industrial sector, however, has remained at less than the national average (in percentage terms), despite the State having several advantages such as seven agro climatic zones, with wide variation in soil type, water availability and climate, abundant natural resources suitable for a variety of commercial crops like oil seeds, cotton seeds, spices and cereals. The State has very high level of production and productivity in several agri and horticulture crops in the country. The State has an established network of market yards besides industrial peace, responsive farming community and above all, its unique geographical location, proximity to national and international markets through its fairly well developed ports, airports and roads.
The science of biotechnology (BT) is making rapid strides. Past several years have witnessed a great conversion of this science into economic benefits due to its application in fields of agriculture, medicine, animal husbandry and environmental protection. Quite often, the science of biotechnology is also termed as key technology of 21st century.
To maintain a competitive civil aviation environment which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country.
The state of Gujarat ('the state') has been prone to disasters. Over the years, these disasters have caused extensive damage to life and property and have adversely impacted economic development. The Government of Gujarat ('GoG') recognises the need to have a proactive, comprehensive, and sustained approach to disaster management to reduce the detrimental effects of disasters on overall socio-economic development of the state. GoG believes that there is a need for a policy that articulates its vision and strategy for disaster management in the state. In this context the Gujarat State Disaster Management Authority (GSDMA) provides guidelines to various entities involved in disaster management in the state to discharge their responsibilities more effectively. With this in view, the GSDMA has formulated the Gujarat State Disaster Management Policy ('GSDMP' or 'the Policy').
- Aims to achieve sustainable industrial development
- Makes the State more attractive to accelerate further the flow of investment in the Industrial sector
- Proposes to promote IT and knowledge based industries
- Enhanced exports from industrial units targeted
The state of Gujarat has been one of the highly industrialised states in India. With its reputation of being a highly investor-friendly state, the state has had a proven track record of attracting high volumes of investment and as a result, becoming the most favoured investment destination in India. The changes in the economic order of the world today with an on going meltdown has resulted in global investors exploring newer investment destinations where the investments would be safe and would fetch assured returns. Having exhibited a relatively strong fundamental economic base, with India not being significantly impacted due to the economic crisis, investors globally are looking towards India for relocating their investments. In the backdrop of these developments, the Government of Gujarat has felt it important and necessary to review and update the state's Industrial Policy. The new Industrial Policy with its holistic approach would identify specific interventions across sectors which would facilitate in fostering significant growth and in the process attract global investments.
As per the latest NASSCOM report of 2005, size of information Technology/Information Technology Enabled Services (IT/ITES) industry in India has been to the tune of USD 36 billion dollar while it employs about 1.3 million people. By 2010 this sector is set to grow to $60 billion and would employ 2.5 million persons. Thus, IT sector in India continues to offer excellent growth opportunities.
The Information Technology (IT) Policy of the state has acknowledged the potential of IT in transforming the society. The IT policy also emphasises the need to accelerate development of IT industry in the state of Gujarat. This in turn will help proliferate IT culture in the state and create large-scale employment opportunities.
During the last few years, IT has been the fastest growing segment of the economy. This sector has created enormous potential for export and growth. To give an impetus to this industry, it is imperative that, the incentive policy takes into account the typical characteristics of this industry. Since, in IT industry, the investment in intangible assets tends to exceed tangible assets. The evolution of IT incentive policy has taken into account this factor as well.
Government of India have announced a Policy of Special Economic Zones (SEZs) during March 2000 with a view to augmenting infrastructure facilities for export production. Setting up of Special Economic Zones are permitted in the public, private, joint sector or by the State Governments. These SEZs are to be deemed foreign territory for tariff and trade operations. The concept of SEZ is expected to bring large dividends to the State in terms of economic and industrial development and the generation of new employment opportunities. The SEZs are expected to be engines for economic growth.
The Government of India has enacted a comprehensive legislation in the form of The Electricity Act, 2003 which attempts to impart renewed thrust to co-ordinated development of the power sector in the country, provides a comprehensive yet flexible legislative framework for power development and envisions a sector characterized by a competitive market in power where the regulators and the power utilities play increasingly significant roles.
Gujarat, situated on the western coast of India, is a principal Maritime State endowed with favorable strategic port locations. The prominence of Gujarat is by a virtue of having nearly 1600 kms long coastline, which accounts for 1/3rd of the coastline of India and being the nearest maritime outlet to Middle East, Africa and Europe.
In 1991, Government of India initiated various economic, trade and industrial reforms, through the policy of liberalisation to enhance industrial and trading activities. The rationalisation of import duties and stress on export promotion have seen imports increasing by 24% and export by 25%. Gujarat State, is one of those frontline States that can take up the policy of liberalisation and privatisation, announced by the Government of India through a process of globalisation.
Transportation plays a principle role in Economic and general development. A well laid out road network is essential for efficient and cost effective movement of men and materials, without which trade and industry cannot maintain a competitive edge.
At the present juncture, when the country is witnessing phenomenal all round growth as a result of economic restructuring, an efficient and dependable Road Infrastructure is absolutely crucial and needs to be accorded overriding priority.
The Chellenges of climent change and global warming continuously threaten the world community. the Government of Gujarat has taken note of the growing recognition of impacts of climate chnage at the local, national and global levels.
The Government of Gujarat is determined to develop tourism as a key industry to make it an important contributor to the state's economic and social growth and to offer a right blend of business and pleasure. This will be achieved by active participation of private, national and international corporate bodies to bring in their expertise and investment with supportive government policies and facilitation.
The Government is keen on development of renewable energy sector, given the dwindling resources of fossil fuels, increased threat of global warming and the concern on environmental protection.The state is blessed with long coast line and good wind speeds for harnessing of the wind Energy.