Maharashtra Vertex Spinning

MAHARASHTRA
September 2009
MAHARASHTRA
September 2009
Investment climate of a state is determined by a mix of factors

Skilled and cost-effective labour Labour market flexibility Labour relations Availability of raw materials and natural resources
Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation
Resources/Inputs Incentives to industry
Investment climate of a state
Regulatory framework Physical and social infrastructure
Tax incentives and exemptions Investment subsidies and other incentives Availability of finance at cost-effective terms Incentives for foreign direct investment (FDI) Profitability of the industry
Condition of physical infrastructure such as power, water, roads, etc. Information infrastructure such as telecom, IT, etc. Social infrastructure such as educational and medical facilities
MAHARASHTRA
September 2009
The focus of this presentation is to discuss

State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities
Key players
Doing business in Maharashtra Overall state competitiveness
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009
A snapshot of Maharashtra
Located in the western region of India, Maharashtra is the third-largest state in India in terms of area and the second-largest in terms of population. It stretches over 307,690 sq km with a total estimated population of 109.7 million as of March 2009. The state shares borders with Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Goa and the Union Territory of Dadra and Nagar Haveli. The Arabian Sea makes up the state's western coast. The state capital, Mumbai, is the sixth-largest metropolitan area in the world and Indias largest and most populous city.
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Socio-economic snapshot
Population (Census 2001) Density (2001) Sex ratio (Census 2001) Principal languages Literacy rate (Census 2001) Major minerals Major industries
96.9 million 315 persons per sq km 922 females per 1,000 males Marathi and Hindi 77 per cent Coal, manganese and iron Financial services, textiles, auto ancillaries, chemical and allied products, electrical and non-electrical machinery, petroleum and allied products, wine, jewellery, pharmaceuticals, engineering goods, media and entertainment, etc. Groundnut, cotton, sugarcane US$ 146.7 billion 10 the main airports are Mumbai, Pune, Nagpur and Nasik
Major crops GSDP at current prices in 200708 Domestic airports
Source: Economic Survey of Maharashtra 200809, page 9
One of the fastest-growing states in India (1/4)

Gross state domestic product (GSDP) registered an average growth of 16.1 per cent in 200708. Net state domestic product (NSDP) was at US$ 125.4 billion and per capita state income at US$ 1,168 in 200708. State contributes 13 per cent to the national income.
GSDP growth
160
140
120
US$ bn
100 80 60 40 20 0
Source: Economic Survey of Maharashtra 200809, page 25 Source: Economic Survey of Maharashtra 200809

Maharashtra vs India: Estimated growth rates 200809 (in %) Sector Agriculture and allied activities Industry Services Total India (GDP) 2.6 4.8 9.6 7.1 Maharashtra (GSDP) (7.1) 4.8 10.5 6.7 Year 19601961 19701971 19801981 19901991 20002001
Sectoral contribution to GSDP (in %) Primary 31 22 24 21 17 15 14 Secondary 23 29 30 32 25 26 27 Tertiary 46 49 46 47 58 59 59
20062007 20072008

It accounts for 24.6 per cent of foreign direct investment (FDI), 20 per cent of the countrys industrial output and 27 per cent of Indias exports. Of the total foreign direct investment (FDI) in
Inflows received by top five destinations in India (%), April 2000June 2009
India, Maharashtra continued to be at the top

position in 2009.
FDI approved projects, for the period April 2000
to July 2009, were mainly in services (23 per cent),

IT and telecom (18 per cent), housing, real estate and construction (13 per cent) and automobiles (4 per cent).
Source: Fact sheet on FDI, Department of Industrial Policy and Promotion (DIPP) FDI statistics, www.dipp.nic.in, accessed on September 20, 2009

Sectoral composition of income, 200809 Changing composition of state income
(in %)
(in %)
MAHARASHTRA
September 2009

Key players
Doing business in Maharashtra
Overall state competitiveness
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INFRASTRUCTURE STATUS MAHARASHTRA September 2009
Well developed road, rail and air infrastructure(1/2)

RAILWAYS
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ROAD NETWORK
AIRPORTS
Well developed road, rail and air infrastructure(2/2)
Railways
Most cities in Maharashtra are well
Airports
Maharashtra has air connectivity with
Road Network
The state has the largest road network
connected through an efficient railway network.

The Central Railways, one of the zones
10 cities, the main airports being Mumbai, Pune, Nagpur and Nashik.
Mumbai is Indias busiest airport.
in the country with a total road length of over 235,595 km.

National highways length is 4,367 km
of the Indian Railways, has its headquarters in Mumbai, at the Chhatrapati Shivaji Terminus.
Maharashtra also has an intra-city
Further, an additional airport is being proposed at Navi-Mumbai. Pune.
A greenfield airport is proposed near 34 per cent of the countrys
network of railways. The suburban railways is responsible for carrying 6.1 million passengers every day.
International passengers are handled by airports in Maharashtra.
and state highways length is 33,800 km Under the ongoing National Highway Development Programme (NHDP), 721 km are being converted into four- to six-lane highways.
The Mumbai-Pune Expressway forms an
important link between the financial and the cultural capital of the state.
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States coastline served by several ports

Ports
There are two principal ports at Mumbai and Nhawa Sheva (JNPT) along the states 720 km
coastline. In addition, the state has 48 smaller ports.
JNPT is the country's largest container port, with container traffic of over 4.06 million 20-foot-
equivalent unit (TEUs) in 200708. It also ranks among the top 30 container ports in the world.
JNPT has a container terminal operated by P&O, UK, which has been developed through private investment on a build-operate-transfer (BOT) basis.
The road connectivity to the JNPT port shall significantly improve on completion of the ongoing
expansion of the national highway linking the port to the mainland.
Source: Yearly performance, JNPT port, www.jnport.gov.in, accessed on September 20, 2009
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Largest installed generation capacity(1/2)

Power
Maharashtra has the largest installed electricity
generation capacity in the country. Total electricity generation increased from 37,311 million kWh to 79,721 million kWh between 199091 and 2007 08.
Installed capacity, 200607
The consumption of electricity in the state increased from 29,971 million kWh in 199091 to
69,838 million kWh in 20072008.

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Largest installed generation capacity(2/2)

Power
Installed capacity of thermal stations continued to form the largest share (51 per cent) of the installed
generating capacity followed by hydro stations.
The peak requirement for power in the state stood at 17,489 MW for the year 200708.
The state has a captive electricity generation capacity of 908 MW.
The industrial sector is the largest consumer followed by domestic and then agriculture.
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One of the strongest telecom markets in India

Telecom
The state has witnessed rapid development in telecommunications services over the last decade.
Telecom status of Maharashtra as on June 30, 2009
Total no of exchanges (urban + rural) Working connections Landlines
4,939
2,916,406 344,420 3,630,105 38,170 341,965 329,070
Maharashtra is the second-largest GSM market
Wireless Local Loop (WLL) Cellular No. of villages with public telephones
with 11.2 million subscribers in 200607.
By March 2008, the number of PCOs under MTNL and BSNL were 0.16 million and 0.31
No. of Internet connections No. of broadband connections
million, respectively.
Source: Maharashtra Telecom Circle, www.maharashtra.bsnl.com, accessed on September 20, 2009
The number of mobile phone users per lakh population at the end of December 2008 in the
state was 40,713.

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Social infrastructure education and health(1/2)

Education
Maharashtra has the second-highest literacy rate in the country. The states education network consists of 10 universities, over 1,800 higher education institutions, 72,053 primary schools and 20,339 secondary schools.
The state has 549 engineering colleges with an annual intake of over 100,000 students.
In addition, there are 617 Industrial Training Institutes (ITIs) and 53 architecture colleges with an annual intake capacity of over 95,000 and 2,500, respectively. One of the six Indian Institutes of Technology (IITs) is located at Mumbai. The state also has a number of reputed national R&D institutions including: Centre for Development of Advanced Computing (C-DAC) Bhabha Atomic Research Centre National Environmental Engineering Research Institute National Chemical Laboratories Tata Institute of Fundamental Research
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Source: Economic Survey of Maharashtra 200809, pages 187-189
Social infrastructure education and health(2/2)

Health
There are 253 medical institutes and 136 nursing colleges with an annual intake of over 10,926 and
3,500, respectively, in the state.
The network of public and government-aided health facilities in the state comprises 1,099 hospitals, 2,072 dispensaries and 1,818 primary health centres.
The number of beds in various public and government-aided health institutions in the state is 94,603, which is 88 beds per million population.
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Mumbai is a leading industrial centre of the country

Mumbai
Mumbai, the capital of Maharashtra, is the most populous city in the country.
It has an international airport and two major ports, Mumbai and Nhava Sheva. It is the financial and commercial hub of India with headquarters for most Indian and multinational financial institutions, including the Reserve Bank of India (RBI). Mumbai is the centre of Indias film and entertainment industry, producing more than 800 movies each year. The city is the main centre for capital marketrelated activities and has the countrys two largest stock exchanges. Mumbai is also home to several large chemicals and pharmaceutical players. 19
Maharashtra has key industrial centres with presence of several industries(1/2)

Pune
Pune is the second-largest city in Maharashtra and the sixth-largest city in the country. The city houses a large number of national and international players from the automobile and IT
industries, including Tata Motors, Bajaj Auto, Daimler Chrysler, Fiat, Bharat Forge, Tata Consultancy
Services, Infosys and Wipro, among others. It has 12 industrial areas focussing on automobiles, chemicals, consumer durables, engineering and information technology. It is also a prominent education centre with the presence of over 100 colleges and institutions.
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Maharashtra has key industrial centres with presence of several industries(2/2)

Nashik
Nashik is an important commercial and religious centre in the state. It has a significant presence of automobile and auto-components, engineering and grape processing industries. The major players in Nashik include Mahindra & Mahindra, Schneider Electric, Siemens and Crompton Greaves. It is home to reputed companies such as Indo-Rama Synthetics, Electrolux and Voltas.
Nagpur
Being centrally located, Nagpur has excellent road and rail connectivity to all parts of the country.
Its unique location in the Indian sub-continent

makes it a viable passenger and cargo hub.
Nashik is a potential destination for engineering,

food processing and biotechnology industries in the state.
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Nagpur is a potential destination for food processing, chemicals and engineering industries.
MAHARASHTRA
September 2009

Key players
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STATE POLICIES AND INCENTIVES MAHARASHTRA September 2009
Thrust on industry in state-level policies(1/2)

Industrial, Investment and Infrastructure Policy, 2006
Policy objective:
To achieve higher and sustainable economic
The policy is valid up to March 31, 2011. Its target is to reduce the percentage of population living below the poverty line by 50 per cent by the year 2010. In addition, it seeks to improve the Human Development Index (HDI) of Maharashtra to a level comparable with the best of Asian countries. The policy aims at ensuring sustainable industrial growth through innovative initiatives for development of key potential sectors and further improving the states conducive industrial climate for providing a global competitive edge to the states industry.
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growth with emphasis on balanced regional

development, employment generation through greater private and public investment in industrial and infrastructure development.
Policy targets:
Industrial sector growth rate of 10 per cent by 2010 Service sector growth rate of 12 per cent by 2010 Additional employment generation of two million by 2010
Thrust on industry in state-level policies(2/2)

Policy strategies:
Identification of thrust sectors Building quality infrastructure Creating incentives for investments and for employment generation in districts low on the Human Development Index Attracting mega investments, both foreign and domestic
Emphasis on tapping local economic resources

Strengthening the small and medium enterprise (SME) sector through promotion of quality, competitiveness, research and development, and technology upgradation Nurturing industrial clusters Facilitating smooth exit option for sick industries and, in some cases, reviving sick units if viable Streamlining procedures and creation of a hassle-free industry friendly environment Strengthening institutional support
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State-level policies on sectors with growth potential(1/2)

IT/ITeS Policy, 2003
Setting up of an empowered committee and a Directorate of Information Technology Fiscal incentives, including stamp duty and electricity duty exemptions, double FSI (FAR) for units built in IT parks Tax exemptions and electricity supply at industrial rates Land allotment process to be made easier
Tourism Policy, 2006

Maharashtra Tourism Development Corporation (MTDC) to work as a singlewindow for clearance of tourism projects
Permission for 24x7 working hours and

relaxation of labour laws Initiatives to strengthen human resources
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State-level policies on sectors with growth potential(2/2)

Biotech Policy, 2001
Establishment of Maharashtra Biotechnology Board and Maharashtra Biotechnology Commission Setting up of a Special Biotechnology Development Fund Creation of biotech parks and biotech resource centre Fiscal incentives, including stamp duty and electricity duty exemptions, and other incentives available to
IT units
Establishment of Grape Processing Industry Board Creation of a wine institute and wine parks at Nashik/Sangli Excise exemptions and other fiscal benefits
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Emphasis on promoting SEZ activity

Special Economic Zone (SEZ) Policy, 2006
Development of special economic zones (SEZs) in the state SEZs, earmarked as duty-free enclaves, have a relaxed and business-friendly policy regime aimed at promoting rapid industrial development and employment generation Exemption from stamp duty and registration fees
Approved policy regime includes:

Exemption of all state and local taxes and levies for transactions with the SEZ and for supply from domestic tariff areas to the SEZ
Grant of labour and environment related

permits and approvals through a dedicated single-window mechanism Permission to generate electricity for own consumption Expeditious process for land acquisition to set up SEZs
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Policy for infrastructure upgradation

Infrastructure policy
In order to improve the management of existing industrial infrastructure in the state, the government is planning to set up industrial township authorities in respective industrial areas.
These authorities will be autonomous bodies responsible for managing common infrastructure with active participation from industrial units located in the area.
They will also collect taxes and revenues for various services.
In the first phase, 12 such industrial township authorities shall be set up. The government is also planning to develop industrial parks through private sector participation.
The states electricity sector is considered among the more progressive ones and the state government has taken steps to further streamline the sector.
The Maharashtra Electricity Regulatory Commission (MERC) has been set up under the provisions of the Electricity Regulatory Commission Act, 1998.
The process of restructuring the Maharashtra State Electricity Board (MSEB) is underway.
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Package scheme of incentives(1/3)

Scheme of incentives: Electricity duty: Export-oriented units (EoUs), information technology (IT) and biotechnology (BT) units, and industries set up in SEZs and electronic hardware technology parks will be exempted from payment of electricity duty for a period of 10 years Waiver of stamp duty and registration fees: New, as well as units undertaking expansion/diversification, will be exempted from payment of stamp duty up to March 31, 2011. Stamp duty exemption would be available as given below: BT and IT units in public parks: 100 per cent BT and IT units in private parks: 75 per cent
Mega projects: 50 per cent
Strengthening micro, small and medium enterprises (MSMEs): Incentives to promote quality competitiveness, research and development, and technology upgradation: 5 per cent subsidy on capital equipment for technology upgradation subject to a maximum of US$ 60,975 50 per cent subsidy on expenses incurred for quality certification limited to US$ 2,440 25 per cent subsidy on cleaner production measures limited to US$ 12,196
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Special incentives for units coming up in the low Human Development Index districts: New units setting up facilities in notified districts (Annexure-II) and employing at least 75 per cent local persons as defined in the Employment of Local Persons Policy will be offered 75 per cent reimbursement of expenditure on account of contribution towards Employee State Insurance (ESI) and Employee Provident Fund (EPF) schemes for a period of five years
Mega projects*
Quantum of incentives within the approved limit to be decided by high-powered committee under the chairmanship of Chief Secretary, Government of Maharashtra
* Mega projects can be defined as industrial projects with investment of more than US$ 122 million or generating employment for more than 1,000 persons or projects with investment more than US$ 61 million or generating employment for more than 500 persons, and would be eligible for a customised package of incentives such as exemption from sales tax for two years for mega projects in Pune
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BUSINESS OPPOTU MAHARASHTRA September 2009
Royalty refund: All eligible units, new as well as old units, undertaking expansion in Vidarbha region to be eligible for refund of royalty paid on purchase of minerals from mine owners within the state of Maharashtra for a period of five years from the date of commencement of commercial production
Promotion of education and research institutions:

Educational and research institutions of international or national standards, including world-class business education institutions, to be provided land in industrial areas/estates at nominal or concessional rates New industrial townships: Maharashtra pioneered the establishment of institutions of democratic decentralisation and local self-governance several decades ago. The concept has been extended through statutory amendments to enable the establishment of independent industrial townships
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MAHARASHTRA
September 2009

Key players
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BUSINESS OPPORTUNITIES MAHARASHTRA September 2009
Maharashtra stands out for its financial strength(1/2)

Financial services
The presence of a robust financial infrastructure is an asset for the state.
Key financial institutions, such as the Bombay Stock Exchange, National Stock Exchange and the RBI, are located in the state.
Over 95 per cent of the value of stock exchange deals is in Mumbai.
Over 90 per cent of India's mutual funds are registered in the state.
Over 90 per cent of merchant banking transactions are structured in Mumbai.
Around 20 per cent of the aggregate deposits of scheduled commercial banks are in Mumbai.
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Maharashtra stands out for its financial strength(2/2)

Financial services
The three largest industrial groups in India namely, Tata Group, AV Birla Group and Reliance have their flagship companies in Maharashtra.
Maharashtra also enjoys the largest share of the total FDI and foreign collaborations approved by the Government of India. These include Coco Cola, Mercedes Benz, Siemens, Procter & Gamble and Unilever, among others.
Source: Economic Survey of Maharashtra 200809, pages 78, 82
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Focus on textile industry(1/2)

Textile industry
The state has an abundance of cotton, which is its key competitive advantage. It accounted for about 62 million kg of cotton production, which was 21 per cent of the countrys total production, and produced 267 million kg. of cotton yarn in 200708. The state has a large base of a skilled workforce. As of 200708, the states installed capacity was 3.96 million spindles, 53,548 rotors and 17,729 looms. Steps to strengthen the textile industry in the state include establishing textile parks at Nagpur, Dhule and Ambernath. Key players in the state include Bombay Dyeing, Century Textiles,Vertex Spinning and Raymond. Raymond plans to expand its denim manufacturing capacity at Yavatmal from 20 to 30 million metres per annum. Nine textile/apparel SEZs are planned to be set up in the state.
Sources: Ministry of Textiles, Annual Report 200809; www.txcindia.com, accessed on September 20, 2009
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Focus on textile industry(2/2)

Textile parks in Maharashtra
Nardhana Textile Park, Dhule Spread over 648 hectares on which 72 plots will be demarcated Butibori (Nagpur) Textile Park Spread over 100 hectares, from which 40 are in reserve for bleaching and dyeing units, and 60 for non-polluting activities like garments, weaving and spinning Ambernath Textile Park An ultra-modern industrial area developed on 507 hectares near Ambernath, a Mumbai suburb
Sources: Ministry of Textiles, Annual Report 200809; www.txcindia.com, accessed on September 20, 2009
Textile/apparel SEZs in Maharashtra Developer MIDC MIDC MIDC Location Nagpur Kagal Yavatyamal Area (in hectares) 383 104 208
MIDC
Nirmal Realty Pvt Ltd Lodha Dwellers Pvt Ltd Welspun Anjar SEZ Ltd MIDC MIDC
Pune
Thane Thane Anjar Solapur Aurangabad
101
162 360 NA 195 200
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Thrust areas of the stateports and logistics hubs(1/2)

Logistics industry Mumbai Port
The Mumbai port caters to about 10.9 per cent of the total sea-borne traffic handled by major ports of the country in terms of volume. It handles about 12.84 per cent of non-container traffic and 2 per cent of container traffic (in terms of TEUs) handled by major ports in India. The year 200708 closed with a throughput of 57.03 million tonnes of cargo traffic, comprising 32.37 million tonnes of imports and 24.66 million tonnes of exports.
Rapid growth in FMCG, pharma and agro processing industries
Major infrastructure projects Booming auto industry
Key Growth Drivers

FTWZs
Mumbra Port
Inland container terminal at Nagpur
Mumbai Pune
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Burgeoning retail sector
Thrust areas of the state ports and logistics hubs(2/2)

JNPT Port
The container traffic handled during the year 2008 09 was 3.95 million TEUs against 4.06 million TEUs handled during 200708.The overall growth in total traffic was 2.58 per cent. The Pune-Nashik-Baroda belt, dominated by Telco, Mahindra, Fiat and GM, is an emerging hub for the auto industry nationally. Logistic hubs and warehousing facilities are expected to come up around major infrastructure projects, such as the Delhi-
Mumbai Industrial Corridor.

Chiplun Infrastructure Pvt Ltd has proposed the development of free trade warehousing zone (FTWZ) in Mumbai over 40 acres.
Sources: Economic Survey of Maharashtra 200809, page 148.; Yearly performance, JNPT port, www.jnport.gov.in, accessed on September 20, 2009
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Large and diversified engineering base(1/2)

Engineering industry
Maharashtra occupies an important place in both the production and export of engineering goods from the country. The engineering industry in the state is highly diversified and produces a large range of parts, from industrial machinery to industrial castings and forgings. The industry, which was initially concentrated in the Mumbai-Pune belt, has spread all over the state with the major production centers being Nagpur, Aurangabad, Nashik and Kolhapur. The major engineering items of production and export in Maharashtra are: textile mill machinery, machinery for sugar, cement and chemical plants, food processing machinery, construction machinery, tractors, electric power machinery, transmission line towers, automobiles and ship building. Some of the key engineering companies situated in Pune include Bharat Forge Ltd, the worlds secondlargest forging company, and Cummins Engines Co Ltd.
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Large and diversified engineering base(2/2)

Some engineering companies present in Maharashtra:
SBEM Pvt Ltd Pune Atul Electro Formers Pvt Ltd, Pune Hylo Transmissions Pvt Ltd, Pune Kam-Avida Enviro Engineers Pvt Ltd, Pune
Legend Communications Pvt Ltd, Pune

Mahavir Group of Industries, Pune
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Strong presence in automobile industry(1/2)

Auto and auto-components
Maharashtra accounts for 38 per cent of the country's automobile output. 40 per cent of the workforce engaged in the automobile industry is employed in the state. Every segment of the sector, including two and three wheelers, passenger cars and commercial vehicles, is represented in the state. The major automobile centres in the state include Pune, Nashik, Aurangabad and Nagpur.
Pune is home to large players like Bajaj Auto Ltd, Daimler Chrysler Ltd, Telco, etc.
Nashik is home to India's largest multi-utility vehicle manufacturer, Mahindra & Mahindra Ltd.
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Strong presence in automobile industry(2/2)

States strength in the sector:
Presence of established manufacturers
Presence of engineering sector
Large, skilled labour base
Good transport infrastructure for logistics-
intensive auto industry
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Growing clout of new economy sectors(1/2)

IT/ITeS
Maharashtra accounts for more than 30 per cent of the country's software exports, with over 1,200 software units based in the state.
Major IT players present in the state

include Tata Consultancy Services, Infosys Technologies, Wipro, Patni Computers, i-Flex Technologies,Veritas.
The Government of Maharashtra is focussing on providing IT-related infrastructure, fiscal incentives to IT units, IT in governance and in providing an institutional framework for the IT sector. BPOs of large national and international players in the state include LG, HSBC, Aviva, vCustomer, Xansa, EDS and e-
Gain, among others.
The state has set up several state-of-the-art IT parks to provide impetus to the IT industry.
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Growing clout of new economy sectors(2/2)

States strength in the industry:
40 per cent of Indias Internet users. 35 per cent of PC penetration in the country.
New developments in the industry:

Hughes Communications Ltd to set up 100 information communication technology (ICT) kiosks each in Nashik and Sangli districts, generating around 600 jobs. Organised Gram Baithaks to demonstrate services and applications that ICT kiosks can offer.
169,000 trained technical personnel added to manpower pool each year.

Development of large number of IT parks in both the public and private sector and development of knowledge corridor.
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Focus on pharma and biotech

Pharmaceutical and biotechnology
The state accounts for 32 per cent of the countrys biotech output.
It has strong research capabilities and accounts for over 30 per cent of the countrys patents. The state has a presence of reputed companies focussing on the biotech sector, including Wockhardt, Nicholas Piramal, Cipla and Lupin, among others. Major opportunities have emerged in the pharmaceutical sector, primarily in the areas of contract research, contract manufacturing and clinical trials.
Source: Seventh Industry Survey, ABLE website, http://www.ableindia.org/, accessed on September 14, 2009

Low costs, strong manufacturing base. Well-developed laboratory and R&D infrastructure. A strong resource pool. Presence of reputed companies focussing on the sector, including Wockhardt, Nicholas Piramal, Cipla, GlaxoSmithKline, Johnson & Johnson. Backward linkages with chemicals and petrochemicals sector is an added advantage.
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Leading player in petrochemicals sector(1/2)

Chemicals and petrochemicals
Maharashtra has a strong presence in the chemicals, petrochemicals, and oil and gas sector. The petrochemical industry has witnessed tremendous growth in the state after the installation of India's offshore oil wells near Mumbai in 1976. The state contributes 27.4 per cent of the countrys chemicals, petrochemicals, and oil and gas output. It also accounts for 18.2 per cent of the country's employment in the sector. Maharashtra contributed as much as 15 per cent of the total production of basic petrochemical products during 200607, second only to Gujarat. Opportunities in the chemicals sector primarily exist in the areas of polymers and plastics, fertilisers and synthetic yarn.
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Leading player in petrochemicals sector(2/2)

Petrochemical industrial units have set up
Logistical convenience

Upstream and downstream linkages for raw materials and products
Availability of oil and gas from Bombay High oil fields (offshore Mumbai) spurred large-scale development of chemicals and petrochemicals industry in the state
base taking into account three main criteria:
Availability of raw materials
Internal and external economies of scale

Reliance Petrochemicals Patalganga, 70 km from Mumbai Bharat Petroleum Corporation Limited (BPCL) Mumbai (Mahul) Indian Petrochemicals Corporation Ltd (IPCL) Nagothane (near Mumbai)
Petrochemical companies in Maharashtra:
IPCL Rabale, Navi Mumbai (catalyst manufacturing)

Hindustan Petroleum Corporation Ltd (HPCL) Mumbai refinery 47
Thrust areas of the state agro and food processing(1/4)

Agro and food processing
Large areas of the state have been brought under fruit cultivation. Some of Maharashtras well-known agro products include Nagpur and Bathplug oranges, the Alphonso mangoes and the grapes of Nashik. The state pioneered the use of water saving technologies, such as drip and sprinkler irrigation and the watershed programme, and accounts for 60 per cent of the total area under drip irrigation in the country. The Government of India (GoI) has announced the creation of the Agri Export Zone (AEZ) for promoting greater exports of fresh and processed agricultural produce from the country. The state has identified eight potential horticultural crops of commercial importance for the AEZ. The main food crops of Maharashtra are mangoes, grapes, bananas, oranges, wheat, rice, jowar, bajra, and pulses. Cash crops include groundnut, cotton, sugarcane, turmeric and tobacco. Sugar output in the state in 200708 was pegged at 909 lakh million tonnes with an average recovery rate of 11.9 per cent.
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Diverse agro climatic conditions suitable to cultivation of a wide range of crops.
20 15 Annual growth rates of gross value added of agriculture and animal husbandary (in %)
Strong industrial base with scope for agroprocessing and agro exports.
Well-developed basic infrastructure. Four agriculture universities and a chain of agriculture research institutions. Vibrant crop-based farmer organisations like Mahagrape, Maha mango, etc. Predominance of cash crops in irrigated areas. More than 1.3 million hectares under fruit cultivation.
10
5 0
1999-2000 2001-2002 2002-2003 2000-2001 2003-04
2005-2006 2004-2005
-5 -10 -15 -20
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Agro and food processing
Maharashtra is one of the largest producers of jowar, tur, cotton, onion, cashew nut, grapes, bananas, oranges, pomegranate and long-stem cut flowers. It is the second-largest producer of soya bean and sugarcane. Apart from 16 major fruit crops, spices, medicinal and aromatic plant plantations have also been set up.
Cotton Sugarcane Rice Mango Jowar Coconut Orange Wheat
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Maharashtras position vis--vis various crops in 200708 Crop/crop group Pulses Coarse cereals Sunflower Per cent share 20.46 17.40 13.70 Position in India First Second Third
Sugarcane
Soya bean Cotton
25.40
36.28 27.13
Second
Second Second
Source: Union Budget and Economic Survey, Ministry of Finance, GoI, http://indiabudget.nic.in/, accessed on September 20, 2009
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Media and entertainment hub of the country(1/2)

Media and entertainment
Mumbai is the nerve centre of the Indian film, media and entertainment industry. Mumbai is also the celluloid capital of India. The city is home to the country's first I-MAX dome theatre as well as cinema multiplex. The city has famous film studios such as Film City in Goregaon, Natraj in Andheri and RK Studio in Chembur. Maharashtra is also home to the famous Film and Televsion Institute of India (FTII) in Pune. Established in 1960, the FTII is one of the oldest and best institutes in the field of film making and television programme production. The Hindi film industry is worth nearly US$ 1.22 billion and presents a huge investment opportunity in several areas such as film production, studios (indoor and outdoor), music recording, editing, choreography, etc.
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Media and entertainment hub of the country(2/2)

Enabling factors
In 2001, the state government announced an entertainment tax waiver policy, under which the tax was not levied on new multiplexes in Maharashtra for the first three years of their operations. Further, 75 per cent of the entertainment tax for the following two years has also been waived as per the policy.
Films produced in 2006 (based out of Mumbai, Maharashtra)
Hindi 223
Marathi 73
Bhojpuri 76
Tourism
The Maharashtra Tourism Development Corporation (MTDC) recorded a 100 per cent increase in revenues from US$ 0.86 million in 2005 to US$ 1.45 million in 200607. MTDC is working on innovative schemes to tap the tourism potential of the state to the fullest; the response to the bed and breakfast scheme has been good.
53
MAHARASHTRA
September 2009

Key players
54
KEY PLAYERS MAHARASHTRA September 2009
Key players
Reliance Industries Ltd It is India's largest business house with total revenues of US$ 34.7 billion and exports worth US$ 21 billion in 2007 08. The group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers and intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. The group has emerged as India's largest wealth creator in the private sector. The group has its corporate headquarters at Mumbai.
ICICI Bank ICICI Bank was formerly the Industrial Credit and Investment Corporation of India. ICICI Bank is India's largest private sector bank in market capitalisation and second-largest overall in terms of assets. The bank has total assets of about US$ 77 billion (June 2009), a network of over 1,500 branches and offices, about 4,800 ATMs and 24 million customers. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries. It also affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank is headquartered at Mumbai.
55
Key players
Bharat Petroleum Bharat Petroleum Corporation Ltd (BPCL) was established in 1976 with the nationalisation of the Burmah Shell Group of Companies by the Indian government. It is one of India's largest public sector unit (PSU) companies, involved in the refining and retailing of petroleum products. The PSUs revenues stood at US$ 31.6 billion in March 2009. BPCL sells its products through a network of 8,402 retail outlets and 2,117 liquified petroleum gas (LPG) distributors across India. BPCL's refinery in Mahul, Mumbai, processes about 9 million metric tonnes of crude oil per annum. The unit has so far processed 61 different types of crude, making it one of the most flexible refineries in the country.
Larsen & Toubro Larsen & Toubro (L&T) is India's largest engineering and construction conglomerate. Founded in 1938, the company is headquartered in Mumbai. The company had a revenue of US$ 7.4 billion in 200809 and about 35,000 employees in 2007. It generates almost 85 per cent of its revenue from the construction business. L&T's in-house capabilities in technology development are complemented by tie ups with world leaders. The company has the infrastructure for its global operations with office locations in the US, Europe, the Middle East and Japan.
56
Key players
Hindustan Unilever Limited Hindustan Unilever Limited (HUL), formerly Hindustan Lever Limited, is India's largest consumer products company and was established in 1933 as Lever Brothers India Limited. With over 15,000 employees, it is currently headquartered in Mumbai. The company has leadership in the home and personal care products section, and in foods and beverages. HUL's brands are spread across 20 distinct consumer categories. It achieved a scale of combined volumes of about 4 million tonnes and sales of US$4.5 million in over the period January 2008 to March 2009. HUL products are manufactured in 80 factories. The operations involve more than 2,000 suppliers and associates.
Godrej Group The Godrej Group, headquartered in Mumbai, was founded by Ardeshir and Pirojsha Godrej in 1897. The group is one of the largest industrial groups in India, involved in businesses such as appliances, precision equipment, machine tools, furniture, office equipment, food processing, security, materials handling and industrial storage solutions, construction and information technology. The groups revenue was approximately US$ 1.875 billion in 200708. The group operates across India and its products are exported to more than 40 countries.
The group can broadly be divided into two major holding

companies that work independently Godrej Industries Ltd and Godrej & Boyce Mfg. Co. Ltd.
57
Key players
Mahindra & Mahindra Ltd Mahindra & Mahindra Limited (M&M), the Mumbaiheadquartered flagship company of the Mahindra Group, was set up in 1945. It is a US$ 4.5 billion conglomerate (December 2008) and has a leadership position in the Indian automotive sector. M&M is present in the automotive sector, the farm equipment sector, and the systems and technologies sector. It is the leading manufacturer of multi-utility vehicles (MUV) and tractors in India. By 2005, M&M had become the largest producer of MUVs in India. The company recently started a separate unit, the Mahindra Systems and Automotive Technologies (MSAT), to focus on developing components and offering engineering services.
ACC Ltd ACC, set up more than six decades ago, is one of Indias largest cement manufacturers. A pioneer in cement and ready-mixed concrete (RMC), Mumbai-based ACC is also a leading Indian player in the refractories segment. ACC manufactures various types of ordinary portland cement, composite cement and special cement. The management control of the company was taken over by Swiss cement major Holcim in 2004. The company is the only cement company to get the Superbrand status in India. It also provides consultancy services in the areas of project engineering, geological investigation and environment management.
58
Key players
Bajaj Auto Ltd Bajaj Auto is Indias leading two-wheeler manufacturer. Founded in 1945, the company has 10,250 employees (200607) and a revenue of US$ 1.82 billion (March 2009). Bajaj Auto makes five kinds of motorcycles, two kinds of scooters and eight kinds of three wheelers. Based in Pune, the company has three plants in Maharashtra, at Akurdi, Waluj and Chakan. The company has a technical tie-up with Kawasaki Heavy Industries of Japan to produce a range of the latest, stateof-the-art two-wheelers in India.
Bharat Forge Ltd (BFL) Bharat Forge Ltd (BFL) , founded in 1961, is the world's second-largest forging company and the largest in Asia. The company, based in Pune, has nine manufacturing plants in India and is a market leader in forged and machined autocomponent manufacturing and exports. In 200809, BFL recorded sales of US$ 459 million. BFL has manufacturing facilities at nine locations spread over six countries India, Germany, Sweden, Scotland, North America and China. The company's international operations are carried out by its subsidiary Carl Dan Peddinghus GmbH.
It is planning to open assembly plants in Brazil and

Indonesia to enhance its overseas presence.
59
Key players
Kirloskar Group The Kirloskar Group, founded in 1888, is one of India's largest engineering and construction conglomerates. The group produces pumps, engines, compressors, lathes and electrical equipment such as motors, transformers and generators; it is the worlds largest genset manufacturer. The groups products are exported to more than 70 countries.
Tata Chemicals Tata Chemicals Ltd is a Tata Group Company (India) that is headquartered at Mumbai. The company was a pioneer in the branded, iodised salt segment. It employs 4,900 people and had an annual turnover of US$ 1.8 billion in 200809. The various products manufactured by Tata Chemicals find applications in agriculture, animal nutrition, construction, food products, glass, metals, pharmaceuticals, safety and environment, soaps and detergents, textiles and leather. The company manufactures about 34 per cent of the country's soda ash.
60
Key players
Essel Group The Essel Group is one of Indias prominent business houses with a diverse portfolio of businesses in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Essel, a Mumbai-based company, was started in 1976 with the commodity trading and export firm, Rama Associates Limited.
Jet Airways Jet Airways, a Mumbai-based company, started commercial airline operations in May 1993. The airline, Indias largest private sector airline, operates more than 380 flights daily across 63 destinations within India and to 20 international destinations. In April 2007, Jet Airways bought out Air Sahara for US$ 340 million. The deal has given the airline a combined domestic market share of about 32 per cent. The company has a fleet size of approximately 84 aircraft and a staff strength of 10,017 people.
61
Key players
Pantaloon Retail (India) Limited Pantaloon Retail, the flagship company of the Future Group, is Indias leading retailer that operates multiple retail formats in both the value and lifestyle segments of the Indian consumer market. Headquartered in Mumbai, the group operates over 12 million sq ft of retail space, has over 1,000 stores across 71 cities in India and employs over 30,000 people. The companys leading formats include Pantaloons, a chain of fashion outlets; Big Bazaar, a uniquely Indian hypermarket chain; Food Bazaar, a supermarket chain; and Central, a chain of seamless destination malls.
Indian Hotels Company The Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, recognised as one of Asia's largest and finest hotel companies. The company opened its first property, The Taj Mahal Palace Hotel, Bombay, in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. The company comprises 59 hotels at 40 locations across India and 17 international hotels in the Maldives, Mauritius, Malaysia, the UK, the US, Bhutan, Sri Lanka, Africa, the Middle East and Australia. The company is grouped into the luxury, leisure and business categories to provide consistency and standardisation across different hotels.
62
Key players
Pfizer It is one of the fastest growing global pharmaceutical companies in India. Headquartered in Mumbai, Pfizer Limited (India) has a turnover of US$ 135.24 million (November 2008) and a staff strength of more than 2,300 employees. Pfizer has made clinical research investments of US$ 5.66 million in India. Seven Pfizer brands feature among the Top-100 pharmaceutical brands in India. Pfizers plant at Thane, near Mumbai, has won a number of national safety awards. Pfizer Inc.'s India unit sold Johnson & Johnson's local arm the exclusive license for trademarks related to the cough syrups Benadryl and Benylin, anti-allergic lotion Caladryl and Listerine mouthwash, as well as other assets for US$ 52 million in early 2008.
Nicholas Piramal India Limited (NPIL) NPIL is the flagship company of the US$ 500 million Piramal Enterprises (PEL). Headquartered in Mumbai, it came into existence in 1988 when it acquired Nicholas Laboratories from Sara Lee. The company is India's second-largest pharmaceutical healthcare company. NPIL has a 2,700-strong field force and, with its joint ventures with several companies, it has 16 strong brands in the Indian pharma industry. In the last 15 years, the company has grown primarily on acquisitions, mergers and alliances. Piramal Healthcare recorded a consolidated revenue of US$ 499 million for 200809.
63
Key players
Tata Consultancy Services (TCS) Tata Consultancy Services, a part of the Tata Group, is one of India's largest IT organisations. It began operations in 1968 and offers services to Fortune 500 clients across 55 countries. TCS has its headquarters at Mumbai and development centres at Mumbai and Pune. In 1981, TCS set up the Tata Research, Design and Development Centre (TRDDC), India's first industrial software R&D centre, in Pune. The core areas of research are systems and software engineering, process engineering, embedded systems, VLSI, bioinformatics and security. TCS has strategic, technical and marketing alliances with companies such as Adobe Systems, Retail Pro, Microsoft Corporation, Mercury Interactive Corporation, Web Health Systems Ltd and IBM.
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MAHARASHTRA
September 2009

State economy and socio-economic profile
Infrastructure status State policies and incentives Business opportunities
Key players
65
DOING BUSINESS IN MAHARASHTRA MAHARASHTRA September 2009
Key approvals required(1/2)

List of approvals and clearances required Prior to setting up the unit Registration Allotment of land/shed Permission for land use No objection certificate under the Water Act, 1974 and the Air Act, 1981 Approval for construction activity and building plan No objection certificate Provisional trade tax registrations Registration under Central Sales Tax Act, 1956 Development authority Development authority Industrial development authorities Pollution control board Development authority Fire department Central and state excise departments Central and state excise departments Pollution control board Fire department Central and state excise departments Central and state excise departments Departments to be consulted
Before commencement of production

No objection certificate under the Water Act, 1974 and the Air Act, 1981 No objection certificate Permanent trade tax registration under Central Sales Tax Act, 1956 Registration under Central Sales Tax Act, 1956
After commencement of production/activity

Registration Industries department
66
Overall business climate(1/2)

Skilled manpower
High literacy rate of 77 per cent Network of educational institutions 12 per cent of countrys universities 17 per cent of medical colleges 13 per cent of engineering colleges (344) 19 per cent of management institutions 169,000 technocrats every year
Source: Economic survey of Maharashtra 2008-2009, p. 117.
Robust infrastructure
Skilled manpower
Key growth drivers
Conducive business environment
Strong services sector
Strong industrial base
67
Overall business climate(2/2)

Robust infrastructure Reliable, costeffective telecom connectivity 11 per cent of national road network road length 246,000 km. 9 per cent of national railway network (5,987 km) 34 per cent of Indias international passengers and cargo handled by state airports 56 per cent of container traffic handled by JNPT in Maharashtra Four international airports, as well as domestic airports at all major cities Conducive business environment State IT policy State SEZ policy Maharashtra biotechnology policy Tourism policy Infrastructure policy E-governance Strong services sector Services contribute 62 per cent to the states economy Produces 20 per cent of countrys software exports Produces 32 per cent of countrys IT professionals 90 per cent of all merchant banking activities take place in Mumbai Santacruz Electronics Export Processing Zone (SEEPZ) accounts for 56 per cent of SEZ exports At 571, largest number of 100 per cent export-oriented units (EOUs) Strong industrial base Most industrialised state, contributes around 20 per cent to the country's gross domestic product (GDP) Around 27 per cent of India's exports gems/jewellery, textiles/garments, leather goods, engineering goods, plastics, pharmaceuticals, electronics/information technology, horticulture are from Maharashtra Diversified industrial base; state ranks first in 12 out of 35 sectors in terms of value of output and ranks among the top three in 25 sectors Largest network of industrial areas 217 industrial complexes, with 125,000 acres (50,000 hectares) of land. Specialised parks for different sectors, including IT
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MAHARASHTRA
September 2009

Key players
69
OVERALL STATE COMPETITIVENESS MAHARASHTRA September 2009
Advantage Maharashtra
Maharashtra is the largest economy in the country, with a high per capita income.
It is the most industrialised state with a strong presence of petrochemicals, automobiles, financial services, IT/ITeS and textile industries.
The state is one of the most attractive investment destinations in the country, accounting for 27 per cent of exports. It has a large network of professional education institutions, the presence of reputed R&D centres and superior support infrastructure.
70

Parameter Opportunities in type of industry Tourism IT-based industries Auto and auto-component industries Pharmaceuticals and biotech Maharashtra
Agro-based industry
Mineral-based industry Engineering industry Chemicals industry Logistics Policy incentives Setting up and carrying out business
71

Parameter Industrial infrastructure existing and proposed Power Transportation Industrial estates/areas Software technology park (STP)/information technology (IT) parks Export promotion industrial park (EPIP) Industrial infrastructure existing and proposed Export promotion zones (EPZ) Integrated infrastructure Development Centres (IIDC) Industrial growth centre Food processing park Maharashtra
Legend
High Medium Low Proposed
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MAHARASHTRA
September 2009
DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Ernst & Young Pvt Ltd to prepare this presentation and the same has been prepared by Ernst & Young in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Ernst & Youngs and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Ernst & Young and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Ernst & Young nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

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MAHARASHTRA

Investment climate of a state is determined by a mix of factors

Resources/Inputs Incentives to industry

Investment climate of a state

Regulatory framework Physical and social infrastructure

The focus of this presentation is to discuss

Doing business in Maharashtra Overall state competitiveness

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

Major crops GSDP at current prices in 200708 Domestic airports

Source: Economic Survey of Maharashtra 200809, page 9

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

One of the fastest-growing states in India (1/4)

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

One of the fastest-growing states in India (2/4)

Sectoral contribution to GSDP (in %) Primary 31 22 24 21 17 15 14 Secondary 23 29 30 32 25 26 27 Tertiary 46 49 46 47 58 59 59

Source: Economic Survey of Maharashtra 200809, page 25

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

One of the fastest-growing states in India (3/4)

India, Maharashtra continued to be at the top

FDI approved projects, for the period April 2000

to July 2009, were mainly in services (23 per cent),

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE MAHARASHTRA September 2009

One of the fastest-growing states in India (4/4)

Source: Economic Survey of Maharashtra 200809, page 22

The focus of this presentation is to discuss

Doing business in Maharashtra

Overall state competitiveness

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

Well developed road, rail and air infrastructure(1/2)

Source: Economic Survey of Maharashtra 200809, page 154

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

Well developed road, rail and air infrastructure(2/2)

connected through an efficient railway network.

Mumbai is Indias busiest airport.

in the country with a total road length of over 235,595 km.

Further, an additional airport is being proposed at Navi-Mumbai. Pune.

A greenfield airport is proposed near 34 per cent of the countrys

International passengers are handled by airports in Maharashtra.

Source: Economic Survey of Maharashtra 200809, page 154

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

States coastline served by several ports

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

Largest installed generation capacity(1/2)

69,838 million kWh in 20072008.

Source: Economic Survey of Maharashtra 200809, page 135

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

Largest installed generation capacity(2/2)

The state has a captive electricity generation capacity of 908 MW.

INFRASTRUCTURE STATUS MAHARASHTRA September 2009

One of the strongest telecom markets in India

Total no of exchanges (urban + rural) Working connections Landlines

2,916,406 344,420 3,630,105 38,170 341,965 329,070

Maharashtra is the second-largest GSM market

with 11.2 million subscribers in 200607.

No. of Internet connections No. of broadband connections

Source: Maharashtra Telecom Circle, www.maharashtra.bsnl.com, accessed on September 20, 2009

state was 40,713.

INFRASTRUCTURE STATUS MAHARASHTRA September 2009