Dynamic City-Regions in India Presentations for five (5 ... - Unido

Dynamic City-Regions in India
Presentations for five (5) Indian Cases
Prepared by:
Shadia Yousif Bakhait
Industrial Development Officer
UNIDO-PCF/SRE
Points requiring further work:
This study is based on Internet as the main source of information. Therefore, the following points are essential before approval of this study:
1. Validation of information sourced from the Internet.
2. Using consultancy resources or UNIDO missions to acquire more related data.
3. Official editing.
United Nations Industrial Development Organization UNIDO

Table of contents
PRESENTATIONS...............................................................................................................................................................5
ABSTRACT ..........................................................................................................................................................................5
INTRODUCTION ...................................................................................................................................................................5
WHY SELECTED CITY-REGIONS FROM INDIA.........................................................................................................................5
METHODOLOGY ..................................................................................................................................................................6
GENERAL PRESENTATION ON INDIA.........................................................................................................................7
1. POPULATION, INDIA ........................................................................................................................................................7
2. COMPOSITION OF INDUSTRIAL GROWTH ..........................................................................................................................7
3. POLICY ISSUES: ...............................................................................................................................................................7
• Credit Policies ...................................................................................................................................................8
• Policy tools ........................................................................................................................................................8
4. INCENTIVES AND FACILITIES FOR SMALL SCALE INDUSTRIES ...........................................................................................9
• Incentives to new industrial units and substantial expansion of existing units: .................................................9
• Fiscal Incentives:...............................................................................................................................................9
5. SUPPORT INSTITUTIONS ...................................................................................................................................................9
6. GOVERNANCE ...............................................................................................................................................................10
• Government Programmes ................................................................................................................................10
• Two major programmes for Environment:.......................................................................................................10
7. ENTREPRENEURSHIP DEVELOPMENT..............................................................................................................................10
• General Entrepreneurship Programmes:.........................................................................................................10
• Women Entrepreneurship:...............................................................................................................................10
• Environment Issues..........................................................................................................................................11
8. ACCESS TO VENTURE CAPITAL.....................................................................................................................................12
• Funding options and sources ...........................................................................................................................12
• Private Venture Capital Organisations ...........................................................................................................12
• Organisations Providing Venture Capital Advisory Services ..........................................................................13
PRESENTATION NO. 1:...................................................................................................................................................14
REGION: KARNATAKA ......................................................................................................................................................14
CITY: BANGALORE ..........................................................................................................................................................14
WHY BANGALORE IS A DYNAMIC CITY REGION?...............................................................................................................14
• Brief History of Bangalore city and Karnataka Region...................................................................................14
• Bangalore attraction........................................................................................................................................15
• Industrial Base in Karnataka and Around Bangalore .....................................................................................15
1. POPULATION................................................................................................................................................................16
2. COMPOSITION OF INDUSTRIAL GROWTH.......................................................................................................................16
A) Information Technology/Electronics .....................................................................................................................16
B) Biotechnology........................................................................................................................................................17
• Infrastructure...................................................................................................................................................18
General Physical Infrastructure.............................................................................................................................19
Specific IT Infrastructure ......................................................................................................................................19
• Specific Biotech Infrastructure ........................................................................................................................20
• Success Barometers .........................................................................................................................................20
• Resources.........................................................................................................................................................20
• Industrial sectors: change founds....................................................................................................................20
HOW DID BANGALORE REACH THIS GROWTH?...................................................................................................................20
1. POLICY ISSUES.............................................................................................................................................................21
• Emergence of software policy..........................................................................................................................21
2. INCENTIVES AND RESOURCES........................................................................................................................................21
• General Incentives ...........................................................................................................................................21
• Fiscal/Financial Incentives..............................................................................................................................21
3. SUPPORT INSTITUTIONS AND ORGANIZATION.................................................................................................................22
• Key Institutions supporting innovation in Karnataka:.....................................................................................22
• Development Boards and Directorates............................................................................................................22
• Associations.....................................................................................................................................................23
• Industrial States...............................................................................................................................................23
4. GOVERNANCE ...............................................................................................................................................................23
• Programmes: ...................................................................................................................................................23
5. ENTREPRENEURSHIP AND TRAINING ..............................................................................................................................23
• Foreign Investments.........................................................................................................................................24
• Innovation and Learning: ................................................................................................................................24
• Growth Centres: ..............................................................................................................................................24
6. ACCESS TO VENTURE CAPITAL......................................................................................................................................24
1. Public Venture Capital Organisations.............................................................................................................24
2. Private venture Capital Organisations ............................................................................................................25
3. Organisations Providing Venture Capital Advisory Service............................................................................25
2

PRESENTATION NO. 2:...................................................................................................................................................26
REGION: TAMIL NADU ....................................................................................................................................................26
CITY: CHENNAI.................................................................................................................................................................26
WHY CHENNAI IS SELECTED AS A DYNAMIC CITY?...........................................................................................................26
Brief History of Tamil Nadu Region:..........................................................................................................................26
Chennai attraction......................................................................................................................................................27
1. POPULATION ................................................................................................................................................................27
Industrial Base in Tamil Nadu and around Chennai..................................................................................................27
2. COMPOSITION OF INDUSTRIAL GROWTH ........................................................................................................................28
A) IT Industry .............................................................................................................................................................28
B) Engineering ...........................................................................................................................................................28
Textile industry...........................................................................................................................................................29
Leather industry .........................................................................................................................................................29
Infrastructure .............................................................................................................................................................29
Industrial sectors: ......................................................................................................................................................29
HOW DID CHENNAI REACH THIS GROWTH? ........................................................................................................................30
1. POLICY ISSUES ..............................................................................................................................................................30
2. INCENTIVES ..................................................................................................................................................................30
3. SUPPORT INSTITUTIONS AND ORGANIZATIONS...............................................................................................................30
• Industrial States:..............................................................................................................................................30
4. GOVERNANCE ...............................................................................................................................................................30
Programmes...............................................................................................................................................................30
5. ENTREPRENEURSHIP AND TRAINING...............................................................................................................................31
Environment issues.....................................................................................................................................................31
Innovation and Learning ............................................................................................................................................31
6. ACCESS TO VENTURE CAPITAL......................................................................................................................................31
Private Venture Capital Organisations......................................................................................................................31
Organisations providing venture capital advisory services........................................................................................31
PRESENTATION NO. 3:...................................................................................................................................................32
REGION: MAHARASHTRA ................................................................................................................................................32
CITY: PUNE ......................................................................................................................................................................32
WHY PUNE IS SELECTED AS A DYNAMIC CITY REGION?.....................................................................................................32
Brief History of Pune and Maharashtra Region: .......................................................................................................33
Pune attraction...........................................................................................................................................................33
Industrial Base in Maharashtra and around Pune ....................................................................................................34
1. POPULATION .................................................................................................................................................................34
2. COMPOSITION OF INDUSTRIAL GROWTH ........................................................................................................................35
Infrastructure .............................................................................................................................................................35
Mumbai-Pune Road ..............................................................................................................................................36
Navi Mumbai ........................................................................................................................................................36
HOW DID PUNE REACH THIS GROWTH?...............................................................................................................................37
1. POLICY ISSUES.............................................................................................................................................................37
2. INCENTIVES AND RESOURCES.........................................................................................................................................38
• General Incentives ...........................................................................................................................................38
• Sector specific incentives .................................................................................................................................38
3. SUPPORT INSTITUTIONS AND ORGANIZATIONS...............................................................................................................38
• Industrial States:..............................................................................................................................................39
4. GOVERNANCE:..............................................................................................................................................................39
• Programmes.....................................................................................................................................................39
5. ENTREPRENEURSHIP AND TRAINING ..............................................................................................................................40
Environment issues.....................................................................................................................................................40
Innovation and Learning ............................................................................................................................................40
6. ACCESS TO VENTURE CAPITAL......................................................................................................................................41
Private Venture Capital Organisations......................................................................................................................41
PRESENTATION NO. 4:...................................................................................................................................................42
REGION: GUJARAT ..........................................................................................................................................................42
CITY: VADODARA.............................................................................................................................................................42
WHY VADODARA IS SELECTED AS A DYNAMIC CITY REGION? ...........................................................................................42
Brief History of Vadodara city and Gujarat region: ..................................................................................................43
Vadodara (Baroda) attraction....................................................................................................................................43
Industrial base for Gujarat,Vadodara and Ahmadabad.............................................................................................44
1. POPULATION .................................................................................................................................................................44
2. COMPOSITION OF INDUSTRIAL GROWTH ........................................................................................................................44
Infrastructure .............................................................................................................................................................45
HOW DID VADODARA REACH THIS GROWTH? ....................................................................................................................45
1. POLICY ISSUES ..............................................................................................................................................................46
2. INCENTIVES AND RESOURCES.........................................................................................................................................46
3. SUPPORT INSTITUTIONS AND ORGANIZATIONS...............................................................................................................46
3

• Industrial Associations: ...................................................................................................................................47
• Industrial States:..............................................................................................................................................47
4. GOVERNANCE ..............................................................................................................................................................47
• Programmes.....................................................................................................................................................47
Innovation and learning .............................................................................................................................................47
5. ENTREPRENEURSHIP AND TRAINING .............................................................................................................................47
6. ACCESS TO VENTURE CAPITAL......................................................................................................................................48
Venture Capital Funds:..............................................................................................................................................48
PRESENTATION NO. 5:...................................................................................................................................................49
REGION: DELHI (UNION TERRITORY)...............................................................................................................................49
CITY: DELHI .....................................................................................................................................................................49
WHY DELHI IS SELECTED AS A DYNAMIC CITY REGION? ...................................................................................................49
Brief History of Delhi Region: ...................................................................................................................................49
Delhi attraction ..........................................................................................................................................................50
Industrial Base in and around Delhi ..........................................................................................................................50
2. POPULATION .................................................................................................................................................................51
2. COMPOSITION OF INDUSTRIAL GROWTH ........................................................................................................................52
Infrastructure .............................................................................................................................................................52
HOW DID DELHI REACH THIS GROWTH? .............................................................................................................................53
1. POLICY ISSUES..............................................................................................................................................................53
2. INCENTIVES AND RESOURCES.......................................................................................................................................53
3. SUPPORT INSTITUTIONS AND ORGANIZATIONS..............................................................................................................53
Industrial States..........................................................................................................................................................54
4. GOVERNANCE ..............................................................................................................................................................54
• Programmes.....................................................................................................................................................54
5. ENTREPRENEURSHIP......................................................................................................................................................55
Innovation and Learning ............................................................................................................................................55
Environment issues.....................................................................................................................................................55
6. ACCESS TO VENTURE CAPITAL......................................................................................................................................56
Private Venture Capital Organisations......................................................................................................................56
Organisations Providing Venture Capital Advisory Services.....................................................................................56
DEFINITIONS OF TERMS: .............................................................................................................................................58
ANNEX I .............................................................................................................................................................................60
BIBLIOGRAPHY...............................................................................................................................................................61
4

PRESENTATIONS 1
SELECTED DYNAMIC CITY-REGIONS IN INDIA
Abstract
These presentations review the available Internet information on dynamic city regions in India. The
presentations are not discussing in details all aspects of Indian industrial development, they rather concentrate
on picking the main points that has direct effect to the growth reached by each selected City and its related
region. Each presentation is a product of an Internet research that conducted to answer the 2 following
questions:
1. Why the selected city is a dynamic city-region?
2. How did the selected city reached its present growth?
Introduction
The dynamism of a city region has a two-direction-effect on the local urban areas. Therefore, issues relating
to the governance of urban areas and regions have become of increasing interest to the industrial development
specialists, academics and policy analysts. Although there is no broadly accepted definition of the city region
concept, the city region has been defined as: 2
“A strategic and political level of administration and policy making, extending beyond the administrative
boundaries of single urban local government authorities to include urban and/or semi urban hinterlands. This
definition includes a range of institutions and agencies representing local and regional governance that possess
an interest in urban and/or economic development matters that, together, form a strategic level of policy
making intended to formulate or implement policies on a broader metropolitan scale”. (Tewdwr-Jones,
McNeill, 2000)
A city-region is also defined, in a simple way, as the city and the surrounding suburbs that constitutes a
coherent region as defined by the local authorities. 3 City-region is a geographic region that is known by the
name of the city that is its center of economic development influence.
To understand what is a city-region, and to tackle the issues related to the concept of city region, we need to
draw together all current thinking on sustainable resource management, public services, economic
restructuring, urban regeneration, social policy and integrated governance. With this understanding the
presentations are based on selected measures as will be described later on each presentation.
Why selected city-regions from India
India is the seventh largest and second most populous country in the world. India also ranks as the third
largest producer of Natural Rubber and 4 th largest manufacturer of rubber goods in the world. India’s
economic reform programme resulted in strong economic growth throughout the 1990s. With 4 17% of the
world’s people, India accounts for less than 2% of global GDP and 1% of world trade. To take the most
obvious comparison, China last year saw an increase in its two-way trade with the world of roughly double
India’s total trade.
The following points characterize the India Central Policy, which boost the growth of the country and has
direct effect to the development and implementation of the individual state policies:
1. Firmly rooted political consensus that spans the diverse political parties.
http://www.meadev.nic.in/economy/bus-ind-p/intro.htm
2. Democracy and stability.
3. No fundamental conflict between political and economic systems.
4. Strong collective and individual rights with an environment supporting free economic enterprise.
5. Institutions that offer foreign investors a transparent environment that guarantees the security of their
long-term investments.
6. Dynamic and highly competitive private sector has long been the backbone of the economic activity. It
accounts for over 75% of its GDP and offers considerable scope for joint ventures and collaborations.
7. Skilled managerial and technical manpower and a middle class that provide a distinct cutting edge in
global competition.
1 This is draft 1 document. Further work is needed to finalize this draft:
- Using consultancy resources or UNIDO missions to acquire more related data.
- Validation of information sourced from the Internet.
- Official editing.
2
http://www.scottish.parliament.uk/S1/whats_happening/research/pdf_res_brief/sb02-123.pdf
3 http://www.copcap.com/composite-2210.htm
4 The Economist, February 21 st 2004
5

Twenty-four States and seven Union Territories span the length and breadth of the Country, marked by
diversity in culture and geography but bound together by a common chord of Nationalism. There are 593
Districts in India administered by their respective State/UT 5 Government.
Methodology
To conduct the studies, the Internet was used as the main source of information. The related information was
extracted from 45 websites and web pages. The addresses of the related Hypertext Transfer Protocol (http) are
included in the attached bibliography. The study includes a list of 5 dynamic city-regions in India with
briefing on each city to show its dynamic growth as well as the mechanism applied to reach that growth, based
on the following 9 measures:
1. Population
2. Composition of Industrial Growth
3. Governance
4. Policy issues
• Credit Policies
• Policy Tools
5. Support Institutions
6. Environment Issues
7. Entrepreneurship Development
8. Incentives and Facilities for Small-Scale Industries
9. Access to Venture Capital
Related information on India is presented on the following pages of the study covering India at a national level
to include its national programmes and policies to provide a base for common understanding of the
presentations for each selected City-region, since the Indian national programmes and policies, e.g., the major
programmes for infrastructure, Industrial Towns and Parks have direct effect to the industrial process at
national level as well as to the individual states.
The following five major industrial regions emerged as a result of different industrial policy resolutions of the
Government of India: - 6
1. Bangalore-Coimbatore-Chennai-Mudurai industrial Belt: This region has large number of silk units, sugar
mills, leather industry, chemical and machine tools and automotive components. There are number of
public sector units which, are situated in this region. The two locations, Bangalore and Coimbatore have
witnessed rapid industrial growth in this region.
2. Bihar, West Bengal industrial belt: The river HOOGLY provided a very good site for the development of
the river port which acted as nucleus for the industrial region. Calcutta emerged as main trading centre.
The region has advantage of developing ferrous metal. There are number of ferrous based big industries in
the region. Other industries in the area are heavy engineering, machine tools, fertilizer cement locomotives
and heavy electrical.
3. Ahmedabad-Vedorara industrial belt: This region became important textile region with the decline in the
textile industries in Mumbai. The industries in the region are now diversified. Besides textiles and textile
machinery and Petro-chemicals other industries in the region are diamond, diesel engines, and
pharmaceuticals.
4. Mumbai-Pune industrial belt: The British initially developed the region of Mumbai-Pune. Mumbai region
has favourable environment of the development of textile industry. New industrial centres emerged in this
region are Kurla, Gktkoper, Villey Parle, Andheri, Thane, Kalyan, Pimpari to Pune. The main industries are
textile engineering pharmaceutical, food processing automotive components, synthetic and plastic goods.
Considering these existing industrial belts and based on Internet search the following 5 Cities are selected as
Dynamic City-Regions in India:
1. Bangalore
2. Chennai
3. Pune
4. Vadodara
5. Delhi
A database structure was designed to develop a database for the selected city regions. The related fields were
filled in the database forms using the same information collected for the presentations and hence the database
was created for the selected Dynamic City-Regions in India.
5 Union Territories
6 Based on the feed back from Mr. Mukesh Gulati, UNIDO Consultant.
6

Figure 1. Sample of Dynamic City Regions database Forms
The record of the database includes the following
fields:
1. Serial No.
2. Region
3. City
4. Total population of the Region
5. Total population of the City
6. Clusters/Sectors
7. Key Institutions
8. Governances: Programmes
9. Bibliography
General Presentation on India
1. Population, India
The total population of India as at 0:00 hours on
1 st March 2001 stood at 1,027,015,247 persons.
With this, India became the second country in the
world after China to cross the one billion mark.
The population of the country rose by 21.34 %
for the period 1991 - 2001. The sex ratio (i.e.,
number of females per thousand males) of
population was 933, rising from 927 as at the
1991 Census. Total literacy rate was returned as
65.38%.
Population:
Persons 1,027,015,247
Males 531,277,078
Females 495,738,169
Sex Ratio 933
Population (0 - 6 years):
Persons 157,863,145
Males 81,911,041
Females 75,952,104
Sex Ratio 927
Number of Literates:
Persons 566,714,995
Males 339,969,048
Females 226,745,947
Percentage of Literates to Total population:
Persons 65.38%
Males 75.85%
females 54.16 %
Percentage of Population (0-6) to Total
Population:
Persons 15.42%
Males 15.47%
Females 15.36 %
Decadal Growth 1991 - 2001:
Persons (+) 21.34%
Males (+) 20.93%
Females (+) 21.79 %
Table1. India Population (Source: Provisional Population Totals: India. Census of India 2001)
2. Composition of Industrial Growth
India has nearly three million SMEs, which account for almost 50% of industrial output and 42% of India's
total exports. It is the most important employment-generating sector and is an effective tool for promotion of
balanced regional development. These account for 50% of private sector employment and 30-40% of valueaddition
in manufacturing (Thyagarajan, 1998). It produces a diverse range of products (about 8,000)
including consumer items, capital and intermediate goods. The SMEs in India constitute more than 80% of the
total number of industrial enterprises and form
the backbone of industrial development. The
continuation of high growth rates within
manufacturing is well spread and broad based.
Of the 17 sub sectors within the manufacturing
sector, 6 sectors have registered growth rates
exceeding 10 per cent in April-October 1996.
These sectors include transport equipment (21.7
per cent), electrical machinery (18.3 per cent),
basic metals and alloys (16.1 per cent) food
products (15.7 per cent), beverages and tobacco
(14.0 per cent) and paper and paper products
(11.0 per cent).
Figure 2. Software Export as a percentage of India’s Total Export
Information Technology Industry in India is a fast growing segment of the Indian economy, with growth rate
exceeding 40% per annum.
The main industrial sectors that characterize the Indian industrial growth are: Basic goods, Capital goods,
Intermediate/consumer goods, Mining/Quarrying, and Electricity.
3. Policy issues:
The industrial policies of 1948 and 1956 indicate the direction of industrial development in India. There are
policies started by the Central Government to have dispersal of industries to reduce the industrial congestion
in the highly industrialized belts. Emphasis placed on balanced regional development in every plan. In a
federal polity like India, regional policies and the distribution of central government expenditures have an
7

important bearing on the pattern of regional growth both directly and through their effects on the distribution
of private investment. Within the political boundaries of the states the industries are more concentrated in
Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab and Tamil Nadu. And it is
relatively less concentrated in Assam, Bihar, Madhya Pradesh, Orissa and Rajasthan. Geographically, the
forward groups of states fall in the western and southern parts of the country and are contiguous except for
Punjab and Haryana, which are separated by Rajasthan from the rest of the states in this group. The groups of
backward states are in the eastern and northern parts of the country and are geographically contiguous.
India has implemented a series of policy changes since the mid-1990s to encourage foreign investment. The
industrial policy reforms secured the reduction of the industrial licensing steps, removing restrictions on
investment and expansion, and facilitating easy access to foreign technology and foreign direct investment.
• Credit Policies
1. Priority for credits/lending is to Small Scale Industries (SSIs).
2. 40 per cent of advances to SSI sector reserved for tiny sector and village and cottage industries.
3. Concessional/fixed rate of interest of loans up to Rs. 2 Lakh.
4. Computation of working capital limits on the basis of minimum of 20% of projected annual turnover for
SSI units with fund based working capital requirement up to Rs. 100 Lakh.
The Action Plan for improving the flow of credit to SSI sector initiated in 1995-96, consisting of:
1. Time bound action for setting up specialised SSI branches in 85 identified districts. At least, 100 of such
dedicated branches were opened before the end of 1995-96.
2. Adequate delegation of powers at all levels.
3. Banks to conduct sample surveys of the performance of their SSI accounts to find out whether they are
getting adequate credit.
4. Steps to be taken to ensure that composite loans (covering both term loans and working capital) are
sanctioned to SSI entrepreneurs as far as possible.
5. Regular meetings by banks at zone and regional levels with SSI entrepreneurs.
6. Need to sensitise bank managers and reorient them regarding working of the SSI sector.
7. Simplification of procedural formalities by banks for SSI entrepreneurs.
8. Scope of National Equity Fund (NEF) scheme providing equity type assistance at 1% service charge to
cover whole country to support expansion, modernisation and technology up-gradation.
9. Technology Development & Modernisation Fund (TDMF) scheme launched for modernisation, improve
and update technology to export oriented units.
• Policy tools
Removal of all import restrictions maintained for balance-of-payments reasons. As a result, the customs tariff
has become the main form of border protection. Tariffs are relatively high, but the average applied MFN 7 rate
fell from 35.3% to 32.3% between 1997/98 and 2001/02 and is expected to fall further, to 29% in 2002/03, as
the “peak” rate of tariff is reduced from 35% to 30%.
The banking sector has been subject to gradual reform since the early 1990s. This includes measures to reduce
the level of non-performing loans, especially in public-sector banks, and to restructure three public-sector
banks. The Reserve Bank of India, which regulates the banking sector, has also strengthened prudential
requirements, including raising minimum capital and capital adequacy ratios.
The insurance industry has recently been opened to competition from the private sector and new licences have
been issued to private companies; foreign equity is restricted to 26% of the total. The role of the regulator, the
Insurance Regulatory and Development Authority (IRDA), has been enhanced. The reforms have
concentrated on addressing the issue of cross-subsidization of tariffs, through the establishment of regulators
and reform of the subsidy bodies; in addition, foreign investment restrictions in transmission were removed.
Restrictions on foreign ownership have been relaxed. Previously, foreign ownership usually had been limited
to a minority ownership stake. Now, in many sectors, majority foreign ownership is permitted.
A number of policy measures have been announced by the Reserve Bank of India to ensure that genuine
production activities get adequate credit. These include:
1. Substantial scaling down of cash reserve ratio (CRR),
2. Raising of export credit limit,
3. Permitting commercial banks to provide foreign currency denominated loans,
4. Reduction in Prime Lending Rates (PLR) and announce the maximum spread over PLR by banks.
7 Most-favoured-nation treatment (MFN) is a general obligation that applies to all measures affecting trade in services.
8

4. Incentives and Facilities for Small Scale Industries
• Incentives to new industrial units and substantial expansion of existing units:
Incentives to new Industrial Units and substantial expansion of existing units whereby new industrial units and
existing industrial units under expansion set up in growth centre, industrial infrastructure development centres
and other locations like industrial estates, parks, Export Processing Zones (EPZs), commercial estates, etc., are
entitled to 100% excise duty exemption for a period of 10 years from the date of commencement of
commercial production. All New industries in the notified locations would be eligible for capital investment
subsidy at 15% of their investment in plant & machinery, subject to a ceiling of Rs. 30 Lakh 8 . The existing
units will be entitled to this subsidy on substantial expansion, as defined. An interest subsidy of 3% on the
working capital loan would be provided to all new industrial units in notified locations for a period of 10 years
after commencement of commercial production. This benefit would also be extended to existing units in
notified locations on expansion, as defined, as well as to notified Thrust Industries. The insurance premium to
the extent of hundred percent on capital investment for a period of 10 years would be extended by the Central
Government to all new units and to existing units on substantial expansion. The financing pattern for
development of integrated industrial infrastructure will change from 2:3 between Government of India (GOI)
and Small Industries Development Bank of India (SIDBI) to 4:1 and the GOI funds would be in the nature of a
grant, so as to provide the required infrastructure support.
• Fiscal Incentives:
Excise concessions available for both registered and unregistered units on a graded scale depending on
turnover up to Rs. 30 Lakh: -
1. Full exemption up to a turnover of Rs. 30 Lakh and concessional rate of excise duty for a turnover in
excess of Rs. 30 Lakh but not exceeding Rs. 75 Lakh and normal rate of duty thereafter.
2. Investment ceiling on plant and machinery for SSI units has been raised from Rs. 60-75 Lakh to Rs. 3
Crores and for tiny units from Rs. 5 Lakh to 25 Lakh.
3. Export obligation of non-SSI units producing reserved items has been reduced from 75% to 50%.
4. Price and purchase preference to products manufactured in small-scale sector in Government purchase
programme.
5. Infrastructure support to Entrepreneurship Development Institutes (EDIs) to augment their training
capacities.
6. Joint programme with the State Bank of India (SBI) and Small Industries Development Bank of India
(SIDBI) for modernisation and technology up gradation of industry cluster.
7. Assistance to industrial associations/voluntary agencies to set up testing centres.
8. Special programmes on vendor development, quality awareness and pollution control.
9. Integrated Infrastructure Development (IID) scheme was launched in March 1994 to strengthen
infrastructure facilities in rural and backward areas. 20 projects have been sanctioned so far.
10. Quality certification scheme to improve SSI product quality. Financial support to acquire ISO 9000.
11. A scheme for creation of technology development fund in the States launched with the involvement of the
State Government and Industry associations.
5. Support Institutions
The investment in Research and Development (R&D) has increased from Rs. 20 Crores in the First Five Year
Plan to about Rs. 20,000 Crores in the Eighth Five Year Plan. Presently there are 214 universities, 400
national laboratories and 1300 in-house R&D centres in the industrial sector. Several Science & Technology
departments have been set up in the areas of environment, non-conventional energy resources, biotechnology,
ocean development, industrial research, space, atomic energy, defence, health, agriculture, information
technology and electronics. With their HQ at New Delhi the following institutions provide support to the
industrial community in the country:
1. Science and Engineering Research Council (SERC): set up under the Department of Science &
Technology (DST) to identify and promote priority areas in R&D as well, for furthering research work in
several disciplines. DST supports 12 autonomous research institutions.
2. Technology Information Forecasting/Assessment Council (TIFAC): has been set up for generating
technology forecasting and technology assessment documents and enabling a technology information
system that is interactive and nationally accessible.
3. Industrial research in several diverse fields of scientific activity is being undertaken through a network of
40 laboratories and 81 field stations set up by the Council for Scientific and Industrial Research (CSIR).
In the field of biotechnology, more than 24 specialised R&D centres have been developed for pursuing
state-of-the-art research. Identical efforts for promoting new avenues of research are being undertaken in
the field of ocean development as well.
4. The Entrepreneurship Development Institute of India (EDI): set up in 1983, is an autonomous institution
registered under the Societies Registration Act and sponsored by all India financial institutions viz.,
8 Lakh = 100,000
9

Industrial Development Bank of India (IDBI), Industrial Credit and Investment Corporation of India Ltd.
(ICICI), Industrial Finance Corporation of India Ltd. (IFCI) and State Bank of India (SBI). EDI has 2
regional offices and branch offices in different states.
5. State Level Export Promotion Council (SLEPC).
6. Governance
• Government Programmes
Major programmes for Infrastructure, Industrial Towns and Parks:
1. National Highways Development Project (NHDP) which, is the major
initiative for capacity enhancement of National Highways and the largest
ever highways project in India with uninterrupted traffic flow. Total Cost
Rs. 54,000 Crores 9 . http://www.nhai.org
2. Software Technology Parks of India (STPI), is a chain of Government of
India owned technology facilitator institutions. The entire India is divided
into zones where a regional STPI takes control of the units, companies
and export oriented IT institutions. Software Technology Parks of India
has been set up by the Ministry of IT, government of India, in 1991, with
the objective of encouraging, promoting and boosting software exports from India. Its services cover
network design; system integration, installation, operations and maintenance of application networks and
facilities in varied areas ranging from VSAT to ATM based networks. The STPI’s objective is to provide
effective data communication facilities to software exporters. The largest STPI are located in Bangalore,
Noida and Hyderabad. http://www.soft.net, http://www.stpn.soft.net, http://www.stph.net
3. FALTA Special Economic Zone (FSEZ) is one of the eight Special Economic Zones of the Govt. of India
in the Ministry of Commerce & Industry under the Special Economic Zone (SEZ) scheme. SEZ is a
specially delineated duty free enclave and is deemed to be foreign territory for the purpose of trade
operations and duties and tariffs. The units in the Zone have to export their entire production and are
granted certain entitlements such as duty deferment on import & domestic procurement, simplified
operational regime, and access to the DTA 10 market. The Special Economic Zones are at Santa Cruz,
Mumbai, Kandla, Kochi, Vishakapatnam, FALTA, Noida and Madras. 13 more SEZs have been notified at
other places. http://www.fepz.com
• Two major programmes for Environment:
1. A wider scheme called the National River Conservation Plan covering pollution abatement works for
grossly polluted stretches in 18 major rivers in 10 States of the country was initiated.
2. To ensure greater transparency and faster decision-making in matters concerning the environmental impact
of industrial projects, the National Environment Appellate Authority (NEAA) has been set up by the
Government in January 1997. Public hearings have now been built into the environment impact assessment.
The machinery for hearing appeals against environment pollution impact assessment is also being set up.
7. Entrepreneurship Development
• General Entrepreneurship Programmes:
According to a study by the Indian Institute of Management, India has been
ranked second after Thailand among 37 countries in entrepreneurial activity for
the year 2002. The government of India realized that technology entrepreneurs -
in short technopreneurs- would be the new leaders in business. Based on this the
entrepreneurs are encouraged to make investment decisions on the basis of their
own commercial judgement. The attainment of technological dynamism and
international competitiveness requires that enterprises, with the bases of the
entrepreneur triangle: Finance-Management-Technology, must be enabled to
swiftly respond to the fast changing external conditions that have become
characteristic of today's industrial world. Government policy and procedures are
geared to assisting entrepreneurs in their efforts through:
1) The industrial licensing system has been gradually moving away from the concept of capacity licensing;
2) The system of reservations for public sector undertakings is evolving towards greater flexibility; and
3) The private sector enterprise has been gradually allowed to enter into many of these areas on a case-bycase
basis.
• Women Entrepreneurship:
Women are slowly becoming part of the national resurgence towards development in all spheres with the
assistance of the Federation of Ladies Organisation (FLO), which is a wing of the Federation of Indian
Chambers of Commerce and Industry (FICCI). The FLO was established to encourage and to promote
9 1 Crore = 10,000,000
10 Double Tax Agreements
10

entrepreneurship and professional excellence of women. It acts as a catalyst for the social and economic
advancement of women. It endeavours to make women aware of their strengths through its educational and
vocational training programmes, talks, seminars, panel discussions and workshops on a wide range of subjects
like Information Technology, Taxation, Insurance, Venture Capital, Exports, Travel and Tourism. FLO has
around 800 members from all over India comprising entrepreneurs, professionals, executives and housewives.
The FLO training programs are organised all over India to cover skills in banking, quality control, marketing,
presentation & packing techniques product diversification and other relevant issues.
The Technology Development Board (TDB) of the Department of Science and Technology has encouraged a
new generation of entrepreneurs through financial assistance. The most outstanding performance of TDB in
the recent years is that for every rupee it could leverage more than two rupees. TDB has reduced the rate of
interest on loans to new entrepreneurs from 6 to 5 percent, per annum. It has also decided not to levy any
royalty on the annual sales turnover of the product developed with the assistance of the Board. These
initiatives encourage more and more entrepreneurs to develop and commercialise indigenous technologies
with loan assistance from TDB.
The Entrepreneurship Development Institute of India (EDI) which, was set up in 1983, is an autonomous
institution registered under the Societies Registration Act and sponsored by the India financial institutions i.e.;
Industrial Development Bank of India (IDBI), Industrial Credit and Investment Corporation of India Ltd.
(ICICI), Industrial Finance Corporation of India Ltd. (IFCI) and State Bank of India (SBI) with active support
of the Government of Gujarat. EDI has 2 regional offices and branch offices in different states.
Organizations like TiE are playing an active role in encouraging entrepreneurship in India.
TiE, a not-for-profit global network of entrepreneurs and professionals, was founded in 1992 in Silicon
Valley, California, USA. TiE stands for Talent, Ideas and Enterprise. It is an open and inclusive
organization that has rapidly grown to more than forty chapters in nine countries. TiE endeavours to
cultivate and nurture the ecosystems of entrepreneurship and free-market economies everywhere, as it
sees this to be the single most powerful instrument of prosperity. Due to TiE's historical origins, the
majority of TiE members have roots in the Indus Region (India, Pakistan, Bangladesh, Sri Lanka and
Nepal). However, this is not a formal requirement for membership. TiE recognizes that its members
must operate within a larger socio-economic environment to be successful and, therefore, encourages its
members to include individuals of all racial and ethnic origins in their entrepreneurial endeavours.
Website for TiE Hyderabad www.tiehyderabad.org.
To address the need of developing new entrepreneurship society, the Entrepreneurship Development Institute
(EDI), Ahmedabad, established an open learning programme in entrepreneurship. EDI has conceptualised
and launched this innovative Entrepreneurship Development Programme through distance learning and
personal counselling and awarding Diploma in Business Entrepreneurship & Management (DBEM).
• Environment Issues
Preventive and promoting measures were set up by the Government to improve environment. Fiscal
incentives are provided by the Government to encourage the installation of appropriate pollution abatement
equipment in the form of custom waives-off and soft loans. While the industries are encouraged and the fiscal
incentives are provided for installing equipment for control of pollution, punitive measures including legal
action is taken against the defaulting units.
Adoption of clean technologies of production and formation of Waste Minimisation Circles is being
encouraged to minimise environmental pollution. Under the World Bank aided Industrial Pollution Control
Project, technical and financial assistance is provided for setting up Common Effluent Treatment Plants
(CETPs) in clusters of small-scale industrial units. An "Eco-Mark" scheme has been launched to certify
various products of the industries, which fulfil the prescribed pollution control standards to achieve the
objective of environment-friendly production, packaging and waste disposal. To increase public awareness
and participation, several public awareness campaigns on effects of pollution and measures to control it have
been launched. The Policy Statement for Abatement of Pollution indicates adoption of best available clean
and practicable technologies, rather than end-of-the-pipe treatment, as the key elements for pollution
prevention. As a part of this thrust, the Ministry of Environment & Forests has set up a Clean Technologies
Division for identifying cleaner technologies that can be introduced in different development sectors.
Techniques like coal beneficiation are being promoted. The programme envisages setting up a National
Clearing House for cleaner technologies as the overall co-ordinating agency and sectoral centres in different
areas of development to focus on their activities. Another initiative taken to motivate environmentally oriented
technologies and practices is mandatory submission of Annual Environmental Statements, which would be
subsequently evolved into environmental audit.
11

8. Access to Venture Capital
As part of the Structural Reform, the Development Bank of India (DBI), in cooperation with the National
Innovation Foundation, set up a micro venture capital fund for small innovations that initiated by the Small
Industries, to facilitate the transition of innovations into enterprises.
• Funding options and sources
To facilitate access to Venture Capital, the Government of India operates 7 Venture Capital Organizations at
the national level. As well there are 7 Venture Capital organizations operating on private basis. These are:
1. IL&FS Venture Corporation Ltd:
Name: South Asian Regional Apex Fund (SARA Fund)
Nature of fund: Trust fund
Date of establishment: 22 June 1995
Date of maturity: 22 June 2007
2. Industrial Development Bank, India (VC Dep’t)
Nature: Division/Department activity required funds are drawn from IDBI's general resources
Area of focus: Focus on commercialisation of indigenous technology, adapting imported technology to
wider domestic applications and projects envisaging higher than normal risk with potential for
commensurate high returns.
Choice for financing: Equity, conditional & convertible loans, preference share.
Target return & period: 30% equity invest., 5-6 yrs.
3. Industrial Credit and Investment Corporation of India (ICICI) Venture Funds Management Company
Limited: As a Private Equity Asset Management Company, ICICI Venture raises capital from a variety
of domestic and international investors, constitutes them into distinct pools and deploys them primarily
in unlisted companies that do not have easy access to public sources of debt or equity capital.
4. Small Industries Development Bank, (VC Div.)
Nature of fund: SIDBI is operating a Venture Capital Scheme exclusively for the units in small-scale
sector. This is a National Venture Fund for Software and Information Technology Industry (NFSIT) also
it contributes to the fund of other venture capital funds wherein the entire contribution made by SIDBI is
utilised exclusively for extending the assistance to small-scale units.
Date of establishment: October 1992
5. Canbank Venture Capital Fund Limited:
Name: Canbank Venture Capital Fund (CVCFI)
Nature of fund: Trust fund
Date of establishment: October 1989
Date of maturity: June 2007
6. HSBC Private Equity Management Mauritius Ltd:
Name: The HSBC Private Equity India Fund Limited
Nature of fund: Mauritius Company
Date of establishment: 6 February 1996
Date of maturity: 11 June 2006
7. State Bank of India: Undertakes financing of the following four types of software activities: a) Man
Power Exports/Programming Services. b) Software projects, c) Software products, d) Miscellaneous IT
Services.
• Private Venture Capital Organisations
1. ACCENTURE Technology Ventures: is a unique venture capital option. Launched in December 1999 as
the venture capital unit of ACCENTURE. The company's mission is to help talented entrepreneurs build
great companies that can transform entire industries, create new markets and, ultimately, generate
superior economic returns. ACCENTURE Technology Ventures plans invests up to $1.5 billion in
global businesses, including provision of services and intellectual property.
2. Draper International
Name of Fund: Draper International India, LP
Natural of Fund: Offshore fund
Date of Establishment: March 1996
Date of Maturity: March 2006
3. Highgate Ventures: Highgate Ventures builds successful technology companies. Through its affiliation
with iGATE Capital, Highgate Ventures creates strategic business partnerships for its portfolio
companies with iGATE’s network of e-services companies and Fortune 1000 customers.
4. IFB Venture Capital Finance Limited
Name of Fund: IFB Venture Capital Finance Limited
Date of Establishment: November 1992
5. International Venture Capital Management Limited
Name of Fund: NANDI Investment Limited
12

Nature of Fund: Offshore fund
Date of Establishment: April 1996
Date of Maturity: Year 2006
6. Marigold Capital Management Limited
Name of Fund: Marigold Funds
Nature of Fund: Trust fund
Date of Establishment: April 1997
Date of Maturity: September 2007
7. Pathfinder Investment Company Private Limited
Name of fund: IL&FS Venture Fund
Nature of fund: Trust fund
Date of establishment: March 1993
Date of maturity: Year 2003
• Organisations Providing Venture Capital Advisory Services
1. BHP CAPITAL: BHP Capital delivers successful deals through a structured transaction process and
through negotiation and deal structuring skills. companies take on a new set of risks by entering into
corporate finance transactions like acquisitions and joint ventures.
13

Presentation No. 1:
Figure 3. Location of Karnataka in India
Region: Karnataka
City: Bangalore
Why Bangalore is a Dynamic City Region?
Bangalore has rapidly made the transition to the
new economy in Information Technology (IT).
Bangalore plays a prominent role in international
electronics, telecommunications and information
technology contributing almost 40% of India's
production in high technology industrial sectors.
Bangalore is home of the corporate giants in IT
like Infosys, Wipro, Satyam, Aditi, IBM, Compaq
etc. Karnataka's IT industry is mostly
concentrated in and around Bangalore.
Karnataka's software industry has shown a steady
and high growth rate in comparison with other
states in the country.
Biotechnology is another sector in which Bangalore has showed a significant growth. Bangalore has the best
"bio-cluster" in the country with sudden escalation in the biotech market, which was due to growing
multinational collaborations and indigenous R&D efforts in this field. In India, it is the State of Karnataka
that holds the pre-eminent position in the field of Information Technology & Biotechnology. In fact, the State
is called the ‘Silicon State of India’ and Bangalore is referred to as the ‘IT Capital of India’ as well as the
‘Biotech City’.
The several international-standard research institutes, the entrepreneurial spirit, pro-active policies by the
Central and State Governments, the cultural and economic milieu of a high-tech city are all ingredients for the
success Bangalore industry. The following points show that Biotech in Bangalore is in its exponential growth:
• As of December 2002, about 85 biotech companies have been established in Karnataka and this number
exceeds any other state.
• Karnataka has attracted maximum venture capital (VC) funding in biotechnology in the country.
• Ninety percent of the biotech companies in Karnataka are in Bangalore.
• Bangalore has the best "bio-cluster" in the country.
Bangalore is selected by UNIDO, 2004 as a dynamic city-region focussing on the two Sectors/Clusters of
IT/electronics and the Biotechnology. The following pages provide more statistics and information on
Bangalore with related figures and graphs.
Table 2.Karnataka General Information
Capital
Bangalore
Area
Population(Census 1991)
Principal Languages
4,50,000 sq km
44.8 million
Kannada
Urbanization Ratio(1991) 30.9%
Literacy Rate(1991) 56%
Major Minerals
Major Industries
Major Crops
High-grade iron ore, cooper, manganese, chromate,
china clay, lime stone, magnetite, Gold.
Aircraft, Rail, coaches, telephone instruments,
electronic & telecommunication, equipments,
glass, batteries, electric motors, textiles, silk,
hosiery, ceramic, sugar, capacitors, mining-metal,
tools, cement, motorcycles, fertilisers.
Rice, Maize, Cardamom, Apricot, Safflower,
coconut, cotton, groundnut, chillies, castor seed,
sugarcane, tobacco.
Brief History of Bangalore city and Karnataka Region
Karnataka, the eighth largest state in India in terms of area (1,92,000 sq. km), is situated in South India.
Karnataka has a 320km long coastline that faces the Arabian Sea. The rest of the State forms a part of the
sprawling Deccan Plateau. To the left, running almost parallel to the coast is the Western Ghats.
14

Karnataka State is a leading State in terms of Science and Technology personnel. The State accounts for 9.2%
of the country’s science and technology personnel numbering about 151 thousand. There are eight Science and
Technology personnel per ten sq. km. of area, and four Science and Technology personnel in every one
thousand population in the State.
Karnataka has a rich tradition in enterprise and in industrialisation. It is a legacy that has been sustained and
passed on through the contemporary times for the current generation.
Bangalore attraction
Bangalore, the capital of the state of Karnataka, is situated halfway between the coasts in southern India. The
city was found in the 16th century. Bangalore is nick named "India's Silicon Valley", "Fashion Capital of
India", "The Pub City of India", "The Garden City", thanks to many local parks, along with pink cassias,
golden acacias, and jacarandas, which bloom throughout the city.
Bangalore "India's Silicon Valley" is India's fifth largest city and
the fastest growing city in Asia. Bangalore is the 4 th largest
Technology Cluster in the World. The city is well connected by air,
rail and road to all the major cities including the four metropolitan
cities, viz., New Delhi, Mumbai, Calcutta and Chennai (Madras).
Bangalore has easy availability of qualified and trained manpower,
the supporting services for industries, and an environment that
stimulates progressive development of technology. It is the city of
electronics, and computers. It has the most significant public sector
base in the country.
Bangalore-Coimbatore-Chennai-Mudurai industrial Belt: This
region has large number of silk units, sugar mills, leather industry,
chemical and machine tools and automotive components. There are
number of public sector units which, are situated in this region. The
two locations, Bangalore and Coimbatore have witnessed rapid
industrial growth in this region.
Figure 4. Transport Facilities
Karnataka has always been at the forefront of industrial growth in India. With its inherent capabilities coupled
with its enterprising citizens. Karnataka provides the ideal choice for investment opportunities based on: -
1. Superior Human Resources including trained technical manpower in Engineering, Management and Basic
Sciences located in Karnataka.
2. High-level research & development facilities originating from a number of Central Government
laboratories & research institutions.
3. Favourable climate and habitat.
4. Excellent communication facilities and accessibility provided by well-established railway, airport,
national highways and seaports.
5. Harmonious industrial relations.
Industrial Base in Karnataka and Around Bangalore
Bangalore has the unique distinction of locating most of the major industries and the largest industrial estates
in the country. The city has well-developed industrial estates e.g. ITI, BEL, HMT, BHEL, etc., which are
located at Peenya, Bommasandra, Veerasandra, Electronic City at Konappana Agrahara. As well it has a
number of industrial areas like: Kumbalagody Industrial Area, Jigani Industrial Area, Hoskote Industrial Area,
Attibele Industrial Area, Whitefield Industrial Area and an Export Processing Zone at Whitefield.
15

Of the 678 medium and large-scale industrial units in the State, 300
are located in and around Bangalore. There are about 115 thousand
small-scale industrial units, in Karnataka. About 21 per cent of these
are located in and around Bangalore.
Table 3. Number of Industries, Karnataka
Karnataka
Large & Medium Industries 678 units
Investment
US$ 6813 Million
Employment 4,46,809
Table 4. Karnataka Region: Facts and Figures
Number of Industrial Estates: 89
Area
1,92,204 square kilometres (eighth largest in
India)
Number of Sheds Industrial 3,920
Between 11º31' and 18º45' North Latitudes -
Areas developed
Location (South Indian Peninsula) 74º12' and 78º40'
Longitudes
Small Scale Industries 115,000 un its
Annual Rainfall 1100mm
Investment
US$ 1102 Million
Employment 1,505,800
1. Population
a) Karnataka population
State/UT*
POPULATION
Population Variation Sex ratio
Persons Males Females
1991-2001 (Females per 000 males)
Karnataka 52,733,958 26,856,343 25,877,615 17.25 964
Table 5. Karnataka population (Source: Provisional Population Totals: India. Census of India 2001)
b) Bangalore population
Population:
Population (0 – 6 years):
Persons 4,292,223 Persons: 458,537
Males 2,240,956 Males 235,755
Females 2,051,267 Females 222,782
Sex Ratio: 915
Sex Ratio: 945
Number of Literates:
Persons: 3,326,983
Males: 1,803,476
Females: 1,523,507
Sex Ratio: 845
Table 6. Bangalore population Source: Provisional Population Totals: India. Census of India 2001)
• 1999-2000– 782 companies
Year No. of Companies Rs. In Crores
• 2000-2001 – 928 companies
1991-92 13 5.6
• 2001-2002 – 1038 companies (as of May 2002).
1992-93 29 20.6
There are 40 companies awarded the SEI CMM Level-5 11 1993-94 53 90
worldwide, of which 29 companies are in India and 18
1994-95 79 200
companies are in Bangalore alone. BangaloreIT.com
1995-96 125 480
1996-97 163 980
1997-98 207 1700
1998-99 267 3200
1999-00 782 4400 (US $0.92 Billion)
2000-01 928 7475 (US $1.58 Billion)
2001-02 938 9903 (US $2.06 Billion)
2. Composition of Industrial Growth
A) Information Technology/Electronics
In the last few years, Bangalore has transformed itself from being a ‘Pensioner’s Paradise’ to the ‘Silicon
Valley’ of India. Bangalore is the major destination for investment, with 116 software and four electronic
hardware exporters registered with the Software Technology Parks, India (STPI) during 2002-03.
Karnataka has a strong base in Very Large Scale Integration (VLSI) Micro Processors, Telecom and other
high technology services, of which more than 150 companies are foreign equity companies. There are more
than 100 multinational companies that have set-up operation in Bangalore. Below is a table showing the
growth of STP Units (Companies) in Bangalore within 4 years: -
Table 7: Growth of companies in terms of investment
16

Figure 5. Growth of Software Export from Bangalore-Karnataka, 1995-96/2001-2002
Software exports from Karnataka was 72% of
total production amount 74.7 billion rupees (1.6
billion dollars) in the fiscal year ending March
2001. Last year, 79 companies with 100%
foreign equity registered with an investment of
Rs. 1,025 Crores. From a mere 13 software units
in 1991-92, the units have increased to 938 as of
August 2001. At least three IT companies with
foreign equity register in Bangalore every
fortnight. This is the kind of growth Information
Technology has experienced in Bangalore, which continued to the year 2002 and expected to continue for the
coming years.
The year 2000-01 saw a growth rate of 69.99% in
software exports and the year 2001-02 experienced
a growth rate of 33%. The Karnataka software
exports value for the year 2000-2001 was Rs 7,475
Crores. Infosys and Wipro account for over Rs
1,000 Crores each. Around 94-96% of exports were
routed through the SPTI centre in Bangalore.
Karnataka software exports reached Rs 9,903
Crores in 2001-2002 and expected to reach Rs
17,000 Crores in 2002-03.
Figure 6. Major exports destinations
Figure 7. Growth of Software Technology Parks, 1991-92/2002-03
The Software Technology Park plays a big role
in encouraging the IT industry in Karnataka.
With STPI presence, the offshore software
exports from the country during 1991-92 has
grown from 20-35% to more than 70%
contributing to 73% of National software
exports. By the end of March 2001, the
Industry has grown to US $ 5.7 billion in
software exports with 380 multinational
companies establishing base in Bangalore. All
the Global Leaders in Hi-Tech areas like IC
Design, Communication Software and System
Software have set-up a base for their operations in India. The STPI at Bangalore presently has more than
1,050 IT companies. Bangalore STPI accounts for 45% of the total STPI revenues in India.
Electronics Hardware Technology Park Scheme
(EHTP): is a 100% Export Oriented scheme for
undertaking manufacture of electronic hardware
equipment/components and peripherals. Department
of Electronics, Government of India at New Delhi
administer the Scheme.
The emerging Business Processing Outsourcing
(BPO) segment recorded an impressive growth of 275
percent and contributed Rs. 988 Crores to the total
exports with the hardware sector accounting for Rs. 1,404 Crores. In all, the total exports from software,
hardware and BPO segments, were Rs 13,754 Crores, showing an increase of 28 percent over the year, 2002.
B) Biotechnology
According to a study conducted by the Confederation of Indian Industry (CII) and Karnataka’s Vision Group
on Biotechnology, in 2001-02 there were 72 companies dealing in core biotech areas employing over 5,000
people, of which 3,500 were scientists. The total project investments were over Rs. 500 Crores (1990-2001)
with a total venture capital funding of over Rs. 70 Crores in the past two years, making total revenue of Rs.
700 Crores, of which Rs. 250 Crores came from exports.
The following figures indicate the growth of companies:
Figure 8. Exports from EHTP Units
17

• As of Dec. 2002, 85 biotech companies established in Karnataka. This number exceeds any other state.
• Karnataka has attracted maximum Venture Capital funding in biotechnology in the country.
• Ninety percent of the biotech companies in Karnataka are in Bangalore.
• Bangalore has the best “bio-cluster” in the country.
The Karnataka State has the record of attracting one new Biotech Company every month for the last two
years. In 2002-03 there are about 100 biotech companies in Karnataka. The Biotech Industry’s major segments
are shown in the attached graph.
Twenty-Two (22) new companies were set up in Karnataka
in 2002-03 increasing the total number of companies to 84,
out of which 20 are in Bangalore alone. The Eighty-four
(84) companies in the sector are providing employment for
8000 people out of which scientific manpower alone counts
for 5000. The Venture Capital investments have gone up to
Rs. 30 Crores in 2002-03 from Rs. 17 Crores in the previous
year. Around 200 patents including 141 Indian and 59
international patents were filed last year. Biotech
companies in Karnataka filed Forty-five (45) out of these
200 patents.
Figure 9. Biotech Industry’s major segments
The Bangalore Bio 2003 grew to become Asia's premier biotech event with the objective to provide a platform
for the different players of the biotech industry to discuss, network, explore new areas of biotech and secure
right business solutions for the future and above all to give direction.
Infrastructure
Karnataka Govt. constructed General Infrastructure facilities/projects that facilitated the industrial
development in the state in general. As well specific infrastructure was constructed for each of IT industry
and Biotechnology industry.
Information Technology/Electronics
In 1992 Bangalore was the first city in India where a satellite earth station was set up for high-speed
communication services to facilitate software exports. Subsequently, in 1999 STPI established earth stations
in Mysore and Manipal. The state of Karnataka made a giant forward leap in the Information Technology
sector when Union Minister for IT inaugurated the country’s first extended facility of the international
gateway and network operations centre at the Software Technology Parks of India (STPI) in the Electronics
City. Hundreds of acres of research laboratories are occupied in the park, by companies like IBM, 3M,
Motorola, Sanyo and Texas Instruments. Companies who locate within the park are insulated from the world
outside by power generators, by the leasing of special telephone lines and by an international-style work
environment. Bangalore poses many advantages for locating IT companies, some of which are outlined
below:
1. Readily available world class IT infrastructure,
2. Excellent specialised human resources,
3. Pleasant and comfortable climatic conditions,
4. Cosmopolitan environment in the city; and
5. High concentration of IT companies with quality research, services and development institutions.
In August 2000, a Cyber Park – Technology Incubation Centre, another first of its kind, was set up in
Bangalore to promote the growth of the IT sector. On 19 th September 2002, a software technology park, IT
Park Hubli, was inaugurated at Hubli. The Karnataka State Government has formulated the Information
Technology Policy that gives a thrust to the Information Technology sector and encourages units to set-up
their operations in the state of Karnataka. Under this policy, several infrastructure facilities are constructed in
Mysore, Hubli, Manipal and Mangalore apart from Bangalore to help the development of the IT industry. The
facilities include providing training to engineers and others as well as providing employment opportunities.
While there are many reasons for this growth, it is mainly the pleasant climate, the talent pool of highly
trained professionals, the training infrastructure and progressive Government policies that have led to this
amazing IT explosion in the city.
The evolution of the IT industry in Bangalore:
1. 1984-Texas Instruments enter India for offshore development.
2. 1986 – DoE announces software policy.
3. 1991-Setup Software Technology Parks (STPI).
4. 1992-Setup Exclusive satellite int’l gateway, export industry.
18

5. 1997-Govt. of Karnataka 1 st one to announce IT Policy.
6. 1998-No. of IT companies under STPI grows to 253, with total projects worth US$840 Million.
7. 1999-Indian Institute of Info. Tech., Bangalore (IIITB) & the KITVEN FUND are established.
8. 2000-No. of IT companies under STPI grows to 782, with total projects worth US$1.1 Billion.
9. 2001-No. of IT companies under STPI grows to 928, with total projects worth US$1.58 Billion.
10. 2001-No. of HTP hardware companies grew to 24, with hardware exports worth US$0.076 Billion.
11. 2002-No. of STPI-IT software comp. Grew to 1038, total projects worth US$2.06 Billion, 5/2002.
12. 2002-No. of EHTP hardware companies grew to 27, hardware exports worth US$0.17 Billion, 5/2002.
The industrial policy, infrastructure, innovation systems, related institutions and entrepreneurship
development are all elements that contributed to the dynamic development in Bangalore and Karnataka.
These are discussed in details as follows.
General Physical Infrastructure
Karnataka has a large number of agencies for the development of infrastructure. The Bangalore Development
Authority [BDA] is the most profitable entity in the entire country with bonds listed on the National Stock
Exchange. The Karnataka Road Development Corporation Ltd. [KRDCL] oversees the intensive development
of major roads. The Infrastructure Development Corporation of Karnataka (IDECK) is a unique joint venture
of Government of Karnataka and Infrastructure Development Finance Corporation [IDFC] that is empowered
and committed to the continuous improvement of the infrastructure in urban areas. IDECK is active in
implementing programmes for the:
1. Development of the Bangalore Intern’l Airport,
2. Bangalore Agenda Task Force, (BATF) for infrastructure,
3. World Bank and HUDCO funded initiatives to improve the urban infrastructure.
Table 8. Infrastructure table
Railway track length
Road length
National Highway length
Domestic airport
International airport
Major cities linked
Ports
Industrial Zones & Parks 23
Export Processing zone 1
3,089 km
1,37,500 Km
2,587 Km
Bangalore, Belgaum, Bellary, Hubli, Mangalore, Mysore
Bangalore
Ahmedabad, Calcutta, Delhi, Chennai, Mumbai, Thiruvananthapuram
New Mangalore, Port Karwar
Specific IT Infrastructure
The State has a large number of private sector players who can provide the IT companies with cutting edge
facilities developed by major Indian players like RMZ Corporation, Embassy, Prestige, IBS, Brigade, Larsen
& Toubro [L&T] etc. They have excellent quality control and project planning skills. For instance, the
HSBC’s 180,000 sq. ft Facility was conceptualised designed and executed only in 135 days. This HSBC
centre is the largest in India and also the best in terms of World Standard Technology. Karnataka has been the
birthplace of a large number of financial institutions in the country. Many nationalised Banks of the country
have originated from Karnataka. The State facilitates the companies with extensive and excellent banking
network that covers even towns and villages. Bangalore offers a truly wide choice of players in telecom. The
entire state is networked via Optic Fibre Cables (OFC) by the State. In addition to the Fibre connectivity,
Bangalore offers excellent International Bandwidth via Satellite.
The IT Corridor
The IT corridor project in Bangalore initiated by the Department of IT along with Bangalore Development
Authority has been conceptualised by Jurong Town Corporation Pvt. Ltd., of Singapore. Occupying an area of
8000 hectares, it is situated between White Field and the Electronic City, Bangalore. This corridor project
provides extensive space and State-of-the-Art facilities for the development of related knowledge-based
industries.
Biotechnology
The several international-standard research institutes, the entrepreneurial spirit, pro-active policies by the
Government, the cultural and economic performance of a high-tech city are all ingredients for success, which
participated, in the Biotech exponential growth in Bangalore. Several physical & fiscal infrastructure
measures have been initiated by the Government of Karnataka to help development in the field of
19

iotechnology. To encourage hi-tech parks in the biotech sector the Government of Karnataka has developed
a Biotech Policy that offers concessions for Biotech Parks.
Figure 10. Diagram for Biotech Corridor
Specific Biotech Infrastructure
1. Biotech Parks,
2. Biotech Corridors,
3. Development of Biotech Industries in
Karnataka,
4. The Karnataka Global Advisory
Networking Group on Agriculture (K-
GANGA),
5. Centre for Human Genetics,
6. Institute of Agro-Biotechnology,
7. Institute of Bio Informatics &
Applied Biotechnology.
Biotech Corridor
The Government of Karnataka established
the Biotech Corridor for the development
of the biotech industry in Karnataka. The
Corridor in Bangalore extends from the
Indian Institute of Science until the
University of Agricultural Sciences. The
following diagram shows the extension of
the Biotech Corridor in Bangalore.
Success Barometers
The success or the failure of any Industry can be gauged by three factors: 1) Fortune of the Industry in the
capital market, 2) Attitude of the Government, and 3) The opinion of the customers. The Indian Software
Industry by all accounts rates high on these three counts. The Govt. of India positive stand vis-à-vis the
software industry is significant. The Government’s ready acceptance of the requests of the IT Industry, its
effort to come-out with an extremely IT friendly budget every successive financial year, the quick passage of
the IT bill and its open mindedness in order to create an amicable IT infrastructure are factors that contributed
positively to the growth of IT industry in India. Some of the key features like reducing duty on software to
zero percent, rationalizing other taxations and the continuing tax holiday reaffirms the government’s positive
intent for the IT Industry in general.
Resources
Karnataka has a wealth of:
1. Human resources talent, internationally reputed institutes for specialised education, besides being a base
for many large Indian and Multinational industries.
2. Agricultural Horticultural resources: Bangalore is even gaining the status of the “Floriculture Capital”
due to the present blossoming of flower exports from the city.
3. Rich of mineral resources. Bangalore is also known as the “Stone City”, for its granite deposits.
4. The only State in India that has gold deposits in the districts of Kolar (Kolar Gold Fields) and Raichur
(HUTTI Gold Mines).
Industrial sectors: change founds
The State identified priority sectors are: Electronics, Telecommunication, Informatics[software], Leather &
Leather Products, Pharmaceuticals, Agro Food Processing, Sugar Industry, Bio-technology industries,
Automobile industries.
The main Industrial Clusters/Sectors in & around Bangalore are:-
1. IT – Software – Hardware and Electronics
2. Bio-Technology
Other industries: Automobile, Food Processing, Floriculture
How Did Bangalore reach this growth?
Despite the global recession, the Indian software and services industry continues to post a strong double-digit
growth. The industry recorded revenues of $10 billion last year in a tough market environment. Much of this
inflow of business into India has been due to the outsourcing wave, increasing cost pressures on global
corporations, a growing focus on core operations by customers and technological advances has made offshore
for global customers a critical tool to boost their growth. The range of processes that may be moved to a
remote geography, or offshore, to take advantage of dramatic cost savings is broad and getting broader
20

everyday. As a result, offshore seen as an adventurous, though desirable, and would necessitate cities to
market themselves well both in India and overseas. Now the offshore is becoming a necessity for businesses
that want to maintain their competitive edge.
1. Policy issues
The main objectives of Industrial Policy 1996 is to active participation of Industry in the development of
infrastructure. It also emphasis on development of potential growth centres, thrust for growth in the export of
value added goods, encouragement of utilisation of Non-conventional energy sources and co-generation, and
encouragement for improvement in productivity, R & D and quality upgradation etc. The State has been
classified into three zones:-
Zone-I : Developed Areas: Bangalore South & North Talukas and Bangalore Urban Agglomeration
areas as per 1991 census
Zone-II : Developing Areas:
Zone-III: Growth Centres:
All the remaining parts of State -173 TALUKAS
Growth Centres at DHARWAD, HASSAN & RAICHUR. Proposed Mini
Growth Centres at BIJAPUR, MALUR-KOLAR District,
CHITRADURGA, CHIKMAGALUR, NIPPANI, GADAG and
BELLARY. Ancillary Complex at THORANAGALLUM BALLARY
District and such other areas as may be so declared by Government in
Commerce & Industries Department from time to time.
After liberalization of Economic Policies, private sector has shown interest in investing in infrastructure areas
like: Airport of International Standards near Bangalore, Information Technology Park, Bangalore-Mysore
Express Highway and several other power projects under implementation in the State. In order to further the
investment flows to infrastructure areas the following measures are undertaken:
1. Govt. acquire/allot lands for such projects for entrepreneurs who may need to purchase land,
2. Govt. considers such projects on BOO/BOOT /BOLT concepts,
3. To enhance economic viability of such projects, a package of incentives is considered on a case-to-case
basis, based on merits of each case,
4. Environment: Establishment of a common effluent treatment plant in association with the concerned
polluting industries, and provision of suitable facilities/area for dumping/disposal of solid wastes
generated within the industrial areas/estates;
5. All Export Oriented industries with a minimum export turnover of 25% of the total turnover will be
classified as Thrust Sector Industries eligible for Special Scale of Incentives,
6. For Export Oriented Industries in the SSI Sector a scheme of Market Development assistance was
formulated to provide financial assistance for developing Export Markets,
7. Utilization of non-conventional energy sources and co- generation is encouraged,
8. Marketing assistance programme was developed,
9. In order to give an impetus for growth of certain sectors of industries for which the State has significant
resource/technology base, 100% exemption from payment of stamp duty and registration charges are
available to the industries, which classified as key projects in core areas,
10. All 100% Export Oriented Units will receive: 1) Investment subsidy, II) Exemption from power cut, III)
Exemption from payment of Entry tax and IV) subsidies payable on purchase of raw materials, packing
materials, capital goods, spares, material handling equipment, intermediates, semi finished goods, etc…
• Emergence of software policy
To make use of the low cost expertise available in India and to avoid the expense of time and cost in travelling
abroad, the government of India set up the first Computer Policy of 1984 and Software Policy of 1986, which
emphasized the concept of software development and export through data communication links. The objective
of this policy was to enhance the development of software industry in India using Indian expertise on
sophisticated computers, which were being imported duty free. As per the policy, companies were allowed to
establish data communication links by their own initial investments.
2. Incentives and resources
• General Incentives
Special measures were made as incentives. There are: Entry tax exemption, Exemption from stamp duty &
concessional registration charges, Investment subsidy, Marketing assistance for the SSI sector, Mega
industries, Relief package for revival/rehabilitation of sick industries, Special concessions for export, and
Waiver of conversion fee for converting lands from agricultural to industrial use.
• Fiscal/Financial Incentives
1. Karnataka State Industrial Investment & Development Corporation Ltd., and Karnataka State Financial
Corporation formulated a special package for providing financial assistance to the Information Technology
Industry. This package has the following features:
a. Equity contribution in small &medium enterprise;
21

. Reduced margin money from the promoters;
c. Reduced interest rate;
d. Seed Capital/Venture Capital assistance.
2. Entry Tax 12 and Purchase Tax exemption for Information Technology hardware Industries.
3. Sales Tax exemption for Information Technology Industries irrespective of level of investment and location
of unit.
4. Special exemptions for the captive power generation sets installed by the Information Technology Industry.
5. Incentives and Concessions as detailed above would be available to all Information Technology Industries
having investment in fixed assets up to Rs. 100 Crores.
6. Companies registered under the Software Technology Park (STP) scheme obtain several benefits including
those mentioned below:
a. Single window government clearance;
b. 100% foreign equity permitted;
c. Complete duty free import;
d. Corporate income tax exempted up to 90%;
e. Dedicated data communication links; and
f. Custom bonding and export certification provided at single point.
7. To encourage hi-tech parks in the biotech sector the Government of Karnataka has developed a Biotech
Policy that offers concessions for Biotech Parks.
3. Support Institutions and Organization
There are about 31 research and Development Organisations of the Central and State Governments located in
Karnataka, of which 28 are located in Bangalore. In addition, about 115 industrial units in Karnataka have Inhouse
Research and Development facilities, which are recognised by the Council of Scientific and Industrial
Research. Karnataka accounts for nearly ten percent of CSIR recognised Research and Development units in
the Country.
• Key Institutions supporting innovation in Karnataka:
1. National Institute of Designs (NID), located in Bangalore and other two centres in Delhi and
Ahmedabad: provide a multi-disciplinary design approach to satisfy the complex problems of India’s
changing environment.
2. Central Manufacturing Technology Institute (CMTI): an autonomous body located at Bangalore is
registered as a society.
3. The Entrepreneurship Development Institute of India (EDI), Bangalore Office: is an autonomous
institution registered under the Societies Registration Act and sponsored by all India financial
institutions.
4. Centre for Entrepreneurship Development of Karnataka (CEDOK).
5. MPI Software Technology India Ltd: is a product and system software development services company
based in Bangalore, India. A subsidiary of MPI Software Technology Inc., USA. It focuses on nextgeneration
product development for high-performance distributed computing, cluster computing, and
grid computing.
6. Technical Consultancy Services Organisation of Karnataka (TECSOK).
7. Karnataka Council for Technological Up-gradation (KCTU).
8. Indian institute of Information Technology Bangalore (IIIT-B): is more of a “learning institution” rather
than a mere “teaching institution”. Its focus is more on knowledge rather than mere skills.
9. Karnataka State Small Industries Development Corporation Limited (KSSIDC).
10. Centre for Human Genetics, Bangalore. The Centre works in the fields of human genes – their nature,
organization, evolution and their relationship to disease and, the centre also addresses the existing gap in
research, education and technology.
11. Institute of Bio-informatics and Applied Biotechnology (IBAB) in the International Tech Park limited
(ITPL) at Whitefield, Bangalore. Established by the Government of Karnataka in association with
ICICI.
12. Small Industry Service Institute (SISI).
• Development Boards and Directorates
The State Government has created several organizations and Institutions to provide infrastructure support to
the private sector enterprises, e.g.: -
1. The Directorate of Industries and Commerce co-ordinates all activities required for industrial
development. It allots to the entrepreneur, power, land and water besides sanction of fiscal incentives.
2. Karnataka Industrial Area Development Board (KIADB) acquires tracts of land for industrial
development (industrial sites).
12 A tax on the purchase value of a commodity which is brought from abroad for the use or sale in the country.
22

3. The Technical Consultancy Services Organisation of Karnataka offers expert consultancy services to
small entrepreneurs at moderate rates.
4. The Karnataka State Finance Corporation, Industrial Investment Development Corporation, Small Scale
Industries Development Corporation and Karnataka Electronics Corporation provide finance, equity
participation, factory sheds and raw material supplies.
• Associations
Karnataka has got 123 associations representing various trade, banking and industrial organisations. Prominent
among the manufacturers associations are Karnataka State Small Scale Industries Association, Confederation
of Electronic Industries of Karnataka and Peenya Industries Association. All the 123 associations are
affiliated to the parent body: Federation of Karnataka Chambers of Commerce and Industries (FKCCI).
• Industrial States
Karnataka has the following industrial states. These industrial states provides significant input to the
industrial growth of the state through their industrial production:
1. BIDADI Industrial Estate, 2. HOSPET, 3. MANGLORE, 4. HASSAN, 5. CHIKMANGLUR
4. Governance
The right partnership which, was developed between the Indian Govt. & the Indian Industry has facilitated the
industrial growth in the state. Establishment of the Software Technology Park Scheme (STP) in 1991 has been
a step in the right direction, at the right time. To improve the performance of State Public Sector
Undertakings, certain simplifications of procedures and delegation of powers have been done like
enhancement of validity period of licenses issued and enhancement of sanctioning powers of Executive
Engineers of Karnataka Engineering Board (KEB).
• Programmes:
1. YUVA.COM, an IT training scheme conceived by the Department of Information Technology and the
Department of Rural Development and Panchayat Raj was launched as part of Mahiti – Government of
Karnataka’s Millennium IT Policy.
2. The STP scheme as a catalyst: In 1990, the STPIs were established through three separate autonomous
societies at Pune, Bangalore and Bhubaneswar, which were later, merged in June 1991 into a single
corporate entity and in quick succession STPIs were established at Noida, Gandhi Nagar, Hyderabad and
Thiruvananthapuram. The STP scheme is a 100 percent export oriented scheme for the development and
export of computer software, including export of professional services using communication links or
physical media.
3. The Karnataka Industrial Areas Development Board (KIADB) was set up under the Karnataka Industrial
Areas Development Act of 1966, with the objective of promoting industrial development in the State of
Karnataka. The Industries and Commerce (I&C) department of the Government of Karnataka is the
administrative body for the Board.
4. Karnataka State Industrial Investments And Development Corporation (KSIIDC): to promote industrial
growth in the state of Karnataka. Assistance is available for purchase of identifiable items of new plant
and machinery for modernisation/expansion /balancing/replacement or for any other purpose.
5. Biotech Park: the Government of Karnataka established the first Biotech Park on the campus of the
University of Agricultural Sciences, Bangalore, on land of about 30 acres. The entire management of the
park is under the guidance of the Vision Group on Biotechnology. The facilities are on commercial bases.
6. Destination Hubli: The programme, ‘Destination Hubli’, launched by Government of Karnataka
highlights the uniqueness of the Hubli-Dharwad programme in attracting investments in BPO 13 sector.
Hubli, which is mid-way between Bangalore and Mumbai, has excellent connectivity and infrastructure
with numerous arts, science, commerce, engineering, medical, etc… ...
7. Mangalore, Udupi: This belt also offers a number of excellent well-known engineering, medical and other
colleges.
5. Entrepreneurship and Training
In Karnataka the entrepreneurship activities are addressed through encouraging R&D and up grading of
training institutions with the provision of incentives and resources. The following is a list of developments
related to Human Resources & Entrepreneurship Development:
1. Industrial units are encouraged to establish new training institutions. As well industrial units are
encouraged to come forward to `adopt’ the existing training institutions run by the Govt. Departments/
Agencies in terms of: I) Revision/up-gradation of syllabus/curricula of training institutions, academic
institutions to facilitate career development; II) Modernization/up-gradation of equipment/facilities of
training institutions/academic institutions; III) Exchange programme for faculty of training
institutions/academic institutions and industrialists to strengthen the concept of continuing education
13 Business Processing Outsourcing
23

system; IV) Introduction of “Industry Sponsored Awards” for Excellence in performance by students in
various fields of Science/Engineering studies;
2. The Science & Technology Entrepreneurs Parks at Mysore and Suratkal were strengthened,
3. The Centre for Entrepreneurship Development of Karnataka was strengthened to give an impetus to
development of local entrepreneurship right from High School level Training programmes for Women
Entrepreneurship are well-designed on income-generating activities in non-traditional areas for youths in
weaker sections of the society in coordination with the schemes under SC/ST/BC/ Weaker Sections and
Women Development Corporations. As well an exclusive Guidance Cell was set up in all offices of the
District Industries Centres to motivate woman entrepreneurs to take up self-employment schemes in
non-traditional areas. For the first generation of woman entrepreneurs an “Incubator” programme
implemented under which, such entrepreneurs would be provided with special assistance and training
right from commencement of project implementation till commercial production,
To help rural youths of the farming community to take up self-employment schemes, special training
programmes formulated in association with leading R&D and Academic institutions.
With a view to encouraging men and women members of the family in entrepreneurial skills, Government
promotes suitable training programmes so that they could effectively associate in the running of the industry
or even start another industry.
Government offers “State Level Awards” in the areas of R&D and Quality Up gradation to motivate local
industries to achieve international standards.
Foreign Investments
The approved foreign investment projects in Karnataka during 1993-94 brought about 169 foreign investors
from Germany, Japan, USA, UK, Switzerland and Sweden. They have invested in computer software,
telecommunications equipments, electronics and electrical, machine tools and engineering products, medical
and laboratory equipments, minerals, ceramics, chemicals, leather products, food processing and tourism.
Texas Instruments is the first foreign company succeeded in establishing Software Company with an Offshore
Development Facility in Bangalore. As well Texas Instruments was the first to establish its own Gateway at
Bangalore with the support of VSNL on a ‘build & operate’ agreement. It was very expensive for smaller
companies and other offshore development users to afford the high cost of the data communication. Further,
an Officer from the Dept. of Electronics, Govt. of India was posted at Texas Instruments to monitor the data
using the protocol analyser before issuing necessary certification. There were many hardships that Texas
Instruments had to encounter and circumvent by liaison with DoT, Ministry of Commerce and the Dept of
Electronics, to make sure that the concept of offshore development could be made a success. NASDAQ
opened its office in Bangalore on Feb 12, 2001. This was seen as a major victory for Bangalore. Annex I
shows the Indian Top Ten Software Exporters for the Years 2000-03.
Innovation and Learning:
The process of innovation is directly related to the analysis of the process of technological changes. 14 To
facilitate the process of innovation, Karnataka Industrial Areas Development Board developed three centres as
Growth Centres to provide assistance and support to enhance innovation and learning processes.
Growth Centres:
In Karnataka there are three (3) Emerging Growth Centres providing their support for innovation and learning
to Bangalore and the surrounding areas. These are:
2. Hassan 15 , 2. Dharwad 16 and 3. Raichur 17 .
These centres has direct effect to Bangalore and ensure all infrastructure facilities like power, water,
telecommunication, banking, post offices residential housing, schools, hospitals etc. Industrial sites are made
available for small, medium and large-scale industries in these Growth Centres to facilitate the process of
innovation through technology testing and improving.
6. Access to Venture Capital
Karnataka has 2 organizations providing access to Venture Capital. These are:
1. Public Venture Capital Organisations
Karnataka Information Technology Venture Capital (KITVEN) Fund KITVEN Fund is dedicated to
investing in companies in the Information Technology Industry operating primarily in Karnataka.
14 Strategies for Regional Innovation Systems: Learning Transfer and Applications by Philip Cook, UNIDO 2002.
15 http://www.kar.nic.in/industry/gc2.htm
16 http://www.kar.nic.in/industry/gc3.htm
17 http://www.kar.nic.in/industry/gc4.htm
24

2. Private venture Capital Organisations
ICF Ventures Private Limited, (ICF Advisor Private Ltd):
Name of Fund: Indian Capital Fund (Mauritius) Ltd
Date of Establishment: October 1997
Date of Maturity: October 2004
Authorised Capital: Rs. 750 million
Organisations Providing Venture Capital Advisory Service
VISTA VENTURES PTE LTD: Vista’s access to capital and its international presence position it uniquely
among venture capitalists in India. The goal of VISTA is to augment the resources of the Indian entrepreneur
with the capital, expertise and perspective that VISTA has access to in Asia and America.
25

Figure 11. Location of Tamilnadu in India
Presentation No. 2:
Region: Tamil Nadu
City: Chennai (Madras)
Why Chennai Is selected as a Dynamic City?
Tamil Nadu attracted IT majors like TCS, Xansa of
UK and Infosys to the new IT Park at Siruseri near
Chennai. Nearly 900 software companies in Tamil
Nadu exported software worth Rs.5223 Crore,
making the state one of the top IT states in the
country. This figure jumped from only 70 softwareexporting
units when software exports totalled
Rs.2000 Crore. The growth of nearly 68 per cent in
exports was a result of number of factors, which are
discussed on the following text.
Traditionally Tamil Nadu is one of the welldeveloped
states in terms of industrial development.
In the post-liberalisation era, Tamil Nadu has emerged as one of the front-runners by attracting a large number
of investment proposals particularly in recent times. Today, Tamil Nadu is the third largest economy in India
and its current State Domestic Product is well over US $ 19.6 billion.
Tamil Nadu is fast emerging state for various investments. Tamil Nadu has done exceedingly well in
attracting FDI inflows - ranking fourth among the states in terms of value of FDI investments and second in
terms of the number of projects in the pipelines. Notably, Tamil Nadu has emerged as a leading state in South
India in the area of attracting FDI. Two cities in Tamil Nadu witnessed rapid industrial growth, i.e. Chennai
and Coimbatore.
Chennai industrial culture, best exemplified by its excellence and diversity in manufacturing, has enabled it to
attract newer industries while retaining and developing traditional strengths. The unique mixture of the old
and the new, and the big and the small, is what has enabled the city to remain vibrant and retain the
competitive edge.
Chennai is selected as a dynamic city-region focussing on the 3 main Industrial Clusters/Sectors:
Automobiles, Leather and Textiles. The following pages provide more statistics and information on Chennai
with related figures and graphs.
Brief History of Tamil Nadu Region:
Traditionally Tamil Nadu is one of the well-developed states in terms of industrial development. In the postliberalization
era, Tamil Nadu has emerged as one of the front-runners by attracting a large number of
investment proposals particularly in recent times. Today, Tamil Nadu is the third largest economy in India and
its current State Domestic Product is well over US $ 19.6 billion. The salient features of its economy is given
hereunder:
Table 9.General Information table
Capital
Chennai
Area
1,30,000 sq km
Population(Census 1991) 55.8 million
Principal Languages Tamil
Urbanisation Ratio(1991) 34.2%
Literacy Rate(1991) 63.7%
Major Minerals
Lime-stone, Magnesium, Mica, Quartz, Salt, Bauxite, Lignite, gypsum.
Major Industries
Major Crops
Cotton textiles, chemicals, fertilizers, paper & pulps, printing & allied industries, diesel
engines, automobiles & ancillaries, cycles, cement, sugar, iron & steel, railway wagon &
coaches.
Rice, Maize, & pulses, sugarcane, oilseeds, cotton, chillies, bananas, coffee, tea & rubber.
Tamil Nadu has a well-diversified industrial base. It has a lion’s share at All India level in production of
number of products.
26

Chennai attraction
Chennai (formerly known as Madras), the capital of Tamil Nadu is
also its principal harbour and has one of the finest beaches in Asia. It
was founded at Fort St. George in 1640 A.D. by Francis Day of the
British East India Company. The city's development started after the
British East India Company established the Fort and a couple of
Trading posts at the small fishing village called Chennai. However,
Chennai is a comparatively new city. Chennai, with its present
gateway to the South of India is about 350 years old.
Chennai is named the Detroit of South East Asia. It is the largest city
in South India and the fourth largest city in the country is located on
what is popularly called the Coromandel Coast of the Bay of Bengal.
It is the India Gateway To The South. Chennai is hub of South
India's Film Industry. Chennai emerged as an industrial city and
constitute one of the cities en the industrial belt of Bangalore-
Coimbatore-Chennai-Mudurai.
Chennai Port is an artificial harbour situated on the Coromandel Coast in Southeast India and it is the second
principal Port for handling Containers.
Table 10. Tamil Nadu Region: Facts and Figures
Area
Location
Rainfall
130,058 Square kilometres
South East of India
785.4 mm
1. Population
a) Tamil Nadu population
State/UT*
POPULATION
Persons Males Females
Population Variation
1991–2001
Sex ratio
(Females per 000 males)
Tamil Nadu 62,110,839 31,268,654 30,842,185 11.19 986
Table 11. Tamil Nadu population Source: Provisional Population Totals. Census of India 2001
b) Chennai population
Population:
Persons 4,216,268
Males 2,161,605
Females 2,054,663
Sex Ratio: 951
Number of Literates:
Persons: 3,079,004
Males: 1,670,094
Females: 1,408,910
Population (0 - 6 years):
Persons: 374,089
Males: 190,044
Females: 184,045
Table 12. Chennai population Source: Provisional Population Totals. Census of
India 2001
Industrial Base in Tamil Nadu and around Chennai
Tamil Nadu has a well-diversified industrial base. It has a lion’s share at All India level in production of
number of products. Following is an indicative of its traditional strengths:
Table 13. Industrial Base for Tamil Nadu
Small Scale Industries
32658 un its
Investment
96490 Lakh Rs.
Employment 240332
Tamil Nadu’s strength lies not only in its traditional industries but also in several new emerging industries as
shown on the following tables: -
27

Table 14. Existing and Emerging Industries Rank of Tamil Nadu Industries - 2000-2001
Mature
Emerging
Rank of Tamil Nadu
(among Indian States)
Mineral based industries
Electronics
Engineering
Software
Industrial Output
Third
Leather
Consumer durables
Value addition
Second
Pharmaceuticals
Biotech Products
Number of factories
Second
Cotton textiles & Hosiery
Food Processing
Total workers employed in factories Second
Ready-made garment industries Rubber and plastic products
Foreign Direct Investment flow Third
Wood Products
Tourism
Agro-based industries
Hotels
Tamil Nadu’s share in
Industry
Chemical based industries
Indian’s output (%)
Financial Services
Heavy Commercial Vehicles 27
Tamil Nadu has a well-diversified industrial base. It has a lion’s
share at All India level in production of number of products.
Following is indicative of its strengths:
Table 15. Rank of Tamil Nadu Industries - 2000-2001
Auto Components 35
Railway coaches 49
Motor cycles & mopeds 46
Newsprint 17
2. Composition of Industrial Growth
A) IT Industry
Cotton Yarn
Power driven pumps
32
50
Tamil Nadu has continued its rich IT with a creditable performance
Leather products 70
on the export front for the last five years. The state has reached a
Cars 21
20.92% growth in software exports at $1.34 billion (Rs. 6,315.51
Crore) during 2002-03, over $1.1 billion (Rs. 5,223 Crore)
achieved in 2001-02. The growth achieved in the year 2001-02
Software 13
was 67.8%, while for the year 2002-2003 growth achieved was 20%. Tamil Nadu retains its 2 nd position rank
after Karnataka, which is the largest software exporter in the country. The offshore component of the total
exports was higher than the onsite with 72%. TCS Limited has topped the top 10 exporters from the state.
Others include HCL, Infosys, Cognizant, Wipro, Polaris, SSI and Satyam. They contributed 63% of the total
exports. Tamil Nadu has 934 software companies of which 624 are exporting firms.
Chennai continued to account for a lion's share of exports at Rs. 6,253. While the state government is striving
to spread the IT prosperity beyond Chennai, other cities in the state have shown growth, e.g. Coimbatore
reported an increase of Rs.43.68 Crore from Rs.42.55 Crore in 2001-02. The hardware exports improved to
Rs.698.25 Crore registering a growth of 44.8% over Rs.482 Crore in the previous year.
Coimbatore has been identified as an intensive floriculture zone. Realising the tremendous potential in the
state, a number of joint ventures involving Dutch companies are, being set up in the area - some involving
major corporate. Govt. of Tamil Nadu has introduced innovative policies like Contract farming policy and
Biotechnology policy. TIDCO developed a floriculture park: TANFLORA at HOSUR and 6 BIO-valleys
including a Genomic centre and a Bio-incubator park in collaboration with Cornell University, USA.
B) Engineering
A strong engineering base exists in the state involving products ranging from automobiles, bicycles, castings
and forgings, to textile machines, electrical and non-electrical machinery, pumps and transportation
equipment. Engineering ancillary industries are concentrated in Chennai (Madras), Coimbatore, Salem, etc.
The exports of engineering products from Tamil Nadu are around Rs.14.50 billion (US $ 320 million) of
which automobile ancillaries along contribute around US$ 150 million. It is an established fact that the
automobile industry in the state accounts for nearly 50% of the All India export market. The strong
engineering base consists of a network of nearly 3,000 units, employing a skilled workforce of more than 2.5
Lakh, making high quality inputs such as castings and forgings and a wide variety of ancillary products. With
the setting up of major automobile projects namely Ford Motors, Hyundai Motors, Hindustan Motors, and
Mitsubishi and with expansion plans of Ashok Leyland & TAFE, Chennai emerges the Detroit of South East
Asia. At present the state accounts for over 11-12% of India’s industrial output.
28

Featuring Textile/ready-made garments and Leather-based industries
Leather and textiles are identified as Thrust Sectors for further industrial growth.
Textile industry
Tamil Nadu has a leading and a well worldwide known position in the area of manufacture of cotton textile.
The state contributes to more than 22% of the country’s exports of cotton yarn and fabrics. The export of
cotton textile in 1999-2000 was US$4.0 billion and it is estimated that it will reach US$5.0 billion by the end
of 2001-2002. USA, UK, France and Germany are among the principal buyers of cotton textile from Tamil
Nadu. In actual terms this translates to around US$1.5-2.0 billion of garments being exported from the state.
The two main centres are Chennai (Madras) and Tirupur.
Leather industry
Tamil Nadu has a strong presence in the leather and leather based industries. The tanning industry in India has
a total installed capacity of 225 million pieces of hide and skins. Tamil Nadu contributes 70% of leather
industry in India. Tamil Nadu enjoys a leadership position with 40% share in India’s export. It currently
employs about 2.5 million employees. Leather exports by the end of the year 2000-2001 was Rs. 9000 Crores
(US$ 2.2 billion) from Tamil Nadu. The objectives
of the Indian Leather Development Programme
(ILDP) are mainly to bridge critical gaps in
infrastructure for integrated development of leather
industry, to activate national agencies towards
tackling perceived gaps in the industry, to promote
and accredit productivity, value addition and
employment, to undertake investment/trade
development activities and build up an information
base for leather.
Infrastructure
Figure 12. Leather Export
Chennai being an important metropolitan town is well connected with all the major cities and industrial
centres in India by road, rail and air.
Table 16. Infrastructure table
Railway track length
4.023 km
Road length
1,67,000 Km
National Highway length 2,002 Km
Domestic airport
Chennai, Tiruchirapalli, Coimbatore, Mudurai, Tuticorin.
International air port
Chennai
Major cities linked
Bangalore, Calcutta, Delhi Hyderabad, Mumbai
Ports
Chennai, Tuticorin, Cuddalore, Nagapattinam
Industrial Zones & Parks 8/td>
Export Processing zone 1
Madras Export Promotion Zone (MEPZ), is one of the seven EPZs set up by the Indian Government. Located
in Chennai it facilitates the establishment and exports of units within the Zone as well as of 100% Export
Oriented Units (EOU) within Tamil Nadu, Pondicherry, and the Andaman & Nicobar Islands. MEPZ is a
multi-product zone housing 90 units with an annual export turnover for the year 2001-2002 reached Rs.764.03
Crores (US$159 million). It also promotes foreign direct investment, enhancing foreign exchange earnings,
and creating greater employment opportunities. The annual export Products exported from MEPZ ranges
from textiles and leather to electronics, engineering, and perfumes, with textiles and software contributing to
more than 50% of the export value. http://www.mepz.com
The State identified the following priority sectors: Cement, Ceramics, Chemicals, Electrical Equipment,
Fertilisers, Metallurgical, Transportation.
Industrial sectors:
There are 3 main Industrial Clusters/Sectors in & around Chennai
• Automobiles/Cycle, Diesel engines, & Railway Wagon/Coaches
• Leather
• Textiles
Value (Millions US$)
450
400
350
300
250
200
150
100
50
0
Leather export
1995 1996 1997 1998 1999 2000
Year
29

How Did Chennai reach this growth?
The key elements, which have made Tamil Nadu an important player in this area, are availability of skilled
and educated manpower, comparatively higher standard of educational institutions, reasonably good
infrastructure, and lower costs of operation. Apart from these, the presence of an International Airport and a
major Seaport in Chennai has also helped the growth of I. T. Industry in Tamil Nadu. After the liberalisation
process in 1991, and especially after reduction of import duties on hardware in July 1996, Multinational
Companies were able to export large volumes to India, thereby boosting the domestic market for both
hardware and software.
The industrial policy, infrastructure, innovation systems, related institutions and entrepreneurship
development are all elements that contributed to the dynamic development in Chennai and Tamil Nadu.
These are discussed in details as follows.
1. Policy issues
At the policy level the Government of Tamil Nadu made its reforms, which include specialized systems to
answer investor queries and guide them through various procedures. To name a few:
• Procedure simplified to single window steps,
• Incentives and concession package for investors,
• Industrial promotion campaigns and seminars,
• Nodal agencies created to attract investments.
• The overall strategy includes the key thrust areas listed below:
‣ Developing technology knowledge - driven industrial advantages
‣ Focus on core and infrastructure sector,
‣ Targeting strategic industries,
‣ Encouraging private sector initiative and participation in infrastructure projects.
These predicted efforts have had their impact on the market and have boosted investor confidence. Hence,
Tamil Nadu emerges as the natural choice for any foreign investor intending to do business in India with its
abundant natural resources, sound infrastructure facilities and the availability of professionals committed to
their respective fields. Its strategic location, professional expertise, well-disciplined work force, excellent
communication network and a well established industrial foundation make it possible for Tamil Nadu to
leverage its industrial growth.
2. Incentives
Incentives and resources:
The Government of Tamil Nadu offers a wide range of concessions and incentives to investors in India to
promote industrial growth and exports. These include General Incentives, Special subsidy for mega projects,
Special concessions for super mega projects, Additional Subsidy for Employing Women workers and
Special Subsidy for Electronics Industry.
3. Support Institutions and Organizations
Key Institutions in Tamil Nadu and Chennai:
Small Industry Service Institute (SISI).
Indian Institute of Technology (IIT), Madras and Madras Institute of technology,
The SCS KOTHARI Academy Institution for women.
Tamil Nadu Industrial Investment Corporation
State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT).
Industrial & Technological Consultancy Organisation of TN (ITCOT).
Tamil N. Ind. Development. Corporation (TIDCO)
Tamil N. Industrial Investment Corporation (TIIC)
Export Promotion Councils.
• Industrial States:
‣ BARGUR Industrial Complex
‣ ORGADAM Industrial Centre
4. Governance
Programmes
The following main programmes participated effectively in the process of industrial development in Tamil
Nadu:
1. Mahindra Business City has been created to support the following industries: IT, Fashion, Auto, Export
oriented industries and Biotechnology. Mahindra City Business Park is divided into several specialist
30

usiness zones with an infrastructure that's customized to give industries a competitive edge.
http://www.mahindrapark.com
2. Chennai Port is an artificial harbour situated on the Coromandel Coast in Southeast India and it is the
second principal Port for handling Containers. The Centre for HRD is concentrating on manpower
development by conducting various training programmes for the Port personnel in various disciplines:
Technical, Managerial, Operational, General, Administration and Computerisation.
http://www.chennaiporttrust.com
3. IT Enabled Services Industry started taking shape in mid 1990's. This market segment consists of services
like call centres and customer interaction services, transaction processing, insurance claims processing,
medical transcription, medical billing, content development, payroll processing, e-CRM, Supply Chain
Management, back office operations like financial accounting, data processing and data mining and many
more. All these jobs are outsourced to India as it is considered as the preferred destination for services.
India has location advantages and also skilled manpower to carry out such assignments.
5. Entrepreneurship and training
Women Entrepreneurs in the Leather Industry
Women are employed in large numbers in Indian leather industry and are making important contribution to
the national economy as well as to exports. Women are involved in footwear production in Athani
(Karnataka), Rajasthan, Agra (UP) and Chennai, Ambur, Ranipet and Vaniambadi (Tamil Nadu). Their entry
into productive work has helped considerably in improving their household situation. With the ‘take off’ of
the footwear industry, especially in the last 20 years and the rapid rise of exports, women’s employment has
increased.
Environment issues
More norms for vehicular emissions have been notified under the Central Motor Vehicles Rules. Supply of
unleaded petrol in Chennai has been introduced with effect from April 1, 1995.
TALCO-a state govt. organisation is setting common effluent treatment plants in leather industry clusters.
Innovation and Learning
Growth Centres:
The following growth centres are established to ensure all infrastructure facilities like power, water,
telecommunication, banking, etc… Industrial sites are made available for small, medium and large-scale
industries in these growth centres to facilitate the process of innovation through technology testing and
improving.
• PERUNDRAI Growth Centre
• GANGAIKONDAN Growth Centre
• NILAKOTTAI Growth Centre
• THIRUKKATCHUR Industrial Town
6. Access to Venture Capital
Private Venture Capital Organisations
1. Industrial Venture Capital Limited
Fund/Investment Details
Name of Fund: Tamil Nadu Venture Fund
Nature of Fund: Division/Department activity
Date of Establishment: June 1994
Date of Maturity: June 1994
Organisations providing venture capital advisory services
1. Technology Capital Partners: Technology Capital Partners has been set up exclusively to cater to the needs
of the technology sector in the areas of funding, strategic alliances, mergers & acquisitions and business
advisory services. We believe that the sector's requirements in these areas are unique, driven by its dynamics,
which are at variance from traditional industries.
31

Figure 13. Location of Maharashtra in India
Presentation No. 3:
Region: Maharashtra
City: Pune
Why Pune is selected as a Dynamic City Region?
Pune is one of the premier cities that producing a
range of Automobile vehicles. It is the home for
several automobile companies.
Recently IT industries, especially multinationals,
established their offices in Pune city.
UNIDO selected Pune in the year 2003 as a
Dynamic City Region focussing on the abovementioned
two Sectors/Clusters, i.e. the Automotive
Industry and Information Technology Industry.
Till some years ago, people living in Mumbai thought of Pune as the ideal place to get away for a weekend.
Pune today is fast emerging as an info-tech hub, challenging IT big cities like Bangalore to emerge as one of
the top contenders for the ‘Silicon Valley of India’ slot. In addition to the huge number of educational
institutions and universities, Pune has statistics to back its claim for the number one destination for IT
investments. As per a recent IDC 18 report, Pune has the highest PC penetration among households and has
overtaken the much of Bangalore. Close proximity to the financial capital and rapidly improving
infrastructure has made Pune one of the most sought-after commercial destinations in the country today. IT
enabled services is another market in Pune. Today Pune is well equipped in terms of infrastructure and has a
favourable climate. The IT enabled services have been a major success with Nasscom predicting huge growth
rates. Pune is a fast developing IT centre. Delays and hassles do not exist in Mumbai-Pune zone, making
Pune an attractive IT destination, and every player wants his company’s presence there. Move over
Bangalore and Hyderabad! Pune is fast racing to the top slots in the Indian software industry. The availability
of huge land in prime locations coupled with the cool climate encouraged the start of the Pune IT park project.
Pune is one of the fastest growing industrial areas. With all the advanced technology absolutely at the
doorstep, Pune is developing in the business and industrial areas with leaps and bounds, and today Pune is fast
emerging as an InfoTech Hub of India. Pune is well known for its Educational Institutions, Universities, and
its Climate and is one of the leading destinations for IT investments. Also, it has a close proximity to the
Financial Capital Mumbai. Both government and private players are playing hard to grab a slice of the huge
market opportunity. There are 75 software companies in Pune. The big names are Pune IT Park, Pune
Software Park, Magarpatta Cybercity, Kharadi Knowledge Park and the Software Technology Park at
Talawade. http://www.virtualpune.com/ Http://www.punediary.com
Pune begins in 1990 to attract foreign capital particularly in the information technology and engineering
industries. New businesses like floriculture and food processing begin to take root in and around the city. In
1999 the Software Development Park is inaugurated near Hinjawdi on the Pune-Mumbai bypass and was
developed by STPI. Pune is also home to well known giants of the Indian software industry like Wipro,
Infosys, Satyam, Tata Technologies, TCS, Kanbay, Veritas, Cognizant, PCS and Mahindra British Telecom.
Nasscom has ranked PUNE ninth out of the top 10 information technology destinations in the country.
http://www.expresscomputeronline.com/ http://www.punecitymag.com/index.html
Pune is selected as a dynamic city-region focussing on the 3 main Industrial Clusters/Sectors in and around
Pune: Automobiles/Auto Components, Information Technology/Electronics Hardware, and Biotechnology
The following pages provide more statistics and information on Pune with related figures and graphs.
18 India Design Centre
32

Brief History of Pune and Maharashtra Region:
Maharashtra, the 3 rd largest and the 6 th well development infrastructure state in India, was created in 1960,
from the Marathi-speaking regions of what was previously known as Bombay State. Maharashtra is one of
the leading states for industrial development in the country and continues to attract the largest quantum of
investments, both domestic and foreign.
The State offers well-developed Infrastructure, excellent educational facilities, quality-trained manpower, a
professional work and ethic/conducive business environment. No wonder that a joint survey of leading Indian
States conducted by the World Bank along with the Confederation of Indian Industry (CII), found that
Maharashtra has the best investment climate.
Table 17.General Information table
Capital
Area
Population(Census
1991)
Principal Languages
Urbanisation
Ratio(1991)
Mumbai
3,08,000 sq km
78.9 million
Marathi
38.7%
Literacy Rate(1991) 63.1%
Major Minerals
Major Industries
Major Crops
Coal, Limestone.
Food products, beverage, tobacco cotton textiles, paper & printing, rubber petroleum, coal, chemicals
Pharmaceuticals metal products, electrical machinery & apparatus, transport equipment.
Rice, wheat and variety of pulses, groundnut, safflower, cotton, Sugarcane, tobacco, orange, banana, mango,
grape, cashew nut, sweet lime.
Pune attraction
Pune is the cultural capital of Maharashtra, lies at the banks of the Mutha and Mula River, surrounded by hills
and has natural settings with pleasant climate. Pune is a significant milestone in the history of India, and
today, it is very much a modern city, but still retains its old values and traditions. While it has always been a
corporate stopover, Pune has its mix culture which, makes it interesting for sight seeing within the city. Pune
city being located in Mumbai-Pune Industrial belt is amongst an important industrial centre in the country.
Number of industries ranging from small scale to large scale is situated in and around Pune.
Pune is the second largest city in Maharashtra with the following reasons contribute to its attractiveness for
investment:
1. Proximity and accessibility to Mumbai.
2. Affordable Real Estate Prices.
3. Better infrastructure, power, road, water, telecom etc
4. Available of skilful labour and entrepreneurs
5. A salubrious climate.
Pune is considered to be an educational and cultural centre of Maharashtra and it has been described as the
Oxford of the East, Detroit of India and one that is poised to becoming the San Jose of Asia. It had changed
its profile to an industrial city in late 1970’s. It stands at the other end of the 'Knowledge Corridor', an
expressway in the form of a superhighway promoted by the Maharashtra State Government, linking its
economic capital Mumbai with Pune as the Knowledge Capital of the State.
The proximity of Pune to Mumbai and the availability of infrastructure facilities, existence of transport and
communication services and also the presence of skilled and unskilled manpower attracted a large number of
industries to this region especially after a ban was imposed on Mumbai’s further industrial expansion in 1960.
Barring a few major industries which have been set up on the eastern side of Pune city, most industries are
developed around the Pune-Mumbai Highway north of Kirkee Cantonment in the vicinity of Pimpri Chinchwad.
The process of migration of people from different parts of the country as well as from the neighbouring
areas also continued because of employment opportunities created by rapid industrialisation. It also resulted
in acute housing problem and increase in slum settlements.
The three I's, in the form of Institutions, Infrastructure and Industries are gifting the Mumbai-Pune corridor
with the great support and facilities to create more opportunities and wealth for the state and for the country.
Under the Maharashtra government's 3As, i.e.; Anytime, Anyhow, Anywhere (AAA), the objective for
enhancing the IT policy for empowerment through connectivity, properly reached its goals. An economic
perspective of the developments that have taken place and consideration of the emerging trends resulting from
various initiatives makes it apparent that Pune emerges as the IT capital of the 21st Century. A sound
33

academic system, solid industrial infrastructure and a salubrious climate for most part of the year apart from
the peaceful social milieu, and a rich, comfortable pace of life has made Pune the preferred destination for
national and international software companies. The recent attractions have been the expressway connecting
Mumbai and Pune, which has reduced the travelling distance and time substantially. Pune is now well known
internationally for industrial product manufacture. Companies like Philips, Telco, Honda, KALYANI Sharp,
Mercedes Benz, and Alfa Laval, have established bases in Pune and are regarded as industrial landmarks.
Added to these are 7,000 other small, medium and large-scale industries that are housed in the city.
Following the path of Bangalore and Hyderabad, Pune's software industry devised its plans to put the city on
the Information Technology map of the country. Pune's association with the software industry dates back to
the early 1980s, when Infosys set up shop in the city. The first Software Technology Park of India (STPI) was
also located in this very city, and is now growing at a rapid rate.
Mumbai-Pune industrial belt: The British initially developed the region of Mumbai-Pune. Mumbai region has
favourable environment of the development of textile industry. New industrial centres emerged in this region
are KURLA, GKTKOPER, VILLEY PARLE, ANDHERI, THANE, KALYAN, PIMPARI to Pune. The main
industries are textile engineering pharmaceutical, food processing automotive components, synthetic and
plastic goods.
Industrial Base in Maharashtra and around Pune
Nearly 15 percent of the total number of manufacturing
units in India is located in Maharashtra. The principal
industrial zone in Maharashtra is the Mumbai - Thane -
Pune belt, accounting for almost 60 percent of the
State's output. Cotton textile industry is the largest and
the oldest industry in the state. Important centres of this industry are located at Mumbai, Nagpur, Sholapur,
Akola, and Amravati; handloomed goods are produced especially in and around Nagpur and Sholapur.
A number of large-scale industries are also present in and around Pune. By the beginning of the year 2000,
there were 38,000 permanently registered and 27,000 provisionally registered small-scale units in the Pune
region. The major companies in Pune are Phillips India, BAJAJ Auto, KIRLOSKAR Cummins,
KIRLOSKAR Filters, KALYANI Sharp, MAHINDRA And MAHINDRA, Hindustan Antibiotics, TATA
Electric And Locomotive Company, Mercedes Benz India Ltd, KIRLOSKAR Oil Engines, Indian card
Clothing, Alfa Laval, SKF Bearings, State Transport Bodybuilding division, WEIKFIELD India, Serum India,
DURO Shocks, Kinetic Honda, BAJAJ Tempo, KIRLOSKAR Pneumatics etc. These companies produce a
variety of goods such as commercial vehicles (light and heavy), locomotives, electronic consumer durables,
oil engines, pump sets, pharmaceuticals, chemicals, two wheeler vehicles, processed food, refrigeration
systems (industrial and domestic), industrial filters, family cars, luxury cars, land-rovers, pick up trucks and a
number of intermediate goods also. Recently Fiat International, Italy set up a new automobile manufacturing
plant near Pune. http://www.punenet.com/present.asp
Table 19. Maharashtra Region: Facts and Findings
Area
307,713 Sq. Km
Location
Rainfall
West Central India
Min 50 cm, average 60-75 cm, Max 200 cm
Table 18. Industrial Units in Pune
Units (No.) EMP (No.)
Capital Emp. Turnover
(Rs. in Crores) (Rs. in Crores )
1978 2515 111965 407 670 (est.)
1985 4529 148470 1563 2749
1990 6766 167830 3204 5445
1995 5838 337417 12423 26393
Source: Directory of Maratha Chamber of Commerce & Industries
1. Population
a) Maharashtra population
POPULATION
State/UT*
Persons Males Females
Population Variation
1991–2001
Sex ratio
(Females per 000 males)
Maharashtra 96,752,247 50,334,270 46,417,977 22.57 922
Table 20. Maharashtra population (Source: Provisional Population Totals: India. Census of India 2001)
34

) Pune population
Population:
Persons 2,540,069
Males 1,325,694
Females 1,214,375
Sex Ratio: 917
Number of Literates:
Persons: 1,920,176
Males: 1,075,247
Females: 844,929
Literacy Rate: 78.52
Population (0 - 6 years):
Persons: 926,828
Males 486,382
Females 440,446
Sex Ratio: 906
Table 21. Pune population (Source: Provisional Population Totals: India.
Census of India 2001)
2. Composition of Industrial Growth
Mumbai-Pune-Nashik: the Corridor of growth:
The three pillars of these golden triangle is established by concentrating on the skilled and labour intensive
industries in the manufacturing sector, especially auto and auto ancillaries, garments, jewellery and gems. As
a result Special Economic Zones (SEZs) and Special Administrative Zones are established to contribute to the
process of rejuvenating the existing industrial parks. A service corridor is established along the Mumbai-Pune
Expressway encompassing industries like retail, healthcare, leisure, IT, biotech and R&D. The strong
agricultural base around Pune and Nashik are being tapped to establish agro-parks for dairy, grapes and
poultry.
Pune has recorded a phenomenal growth in the IT enabled services sector in the last couple of years with
growth in 2003 touching over 50 per cent while the growth in the rest of India stayed stagnant at around 35
per cent. Industry players are now exulting in the fact that the city is now at the number one position in terms
of growth percentage, a distinct change from year 2000 when it was at the bottom of the pile according to the
National Association of Software and Services Companies' figures. With IT majors like Infosys, Wipro,
Kanbay and Zensar betting their money on the city and many BPO 19 companies starting busibess, Pune city is
having an edge over other cities.
The following percentages show the Economic Strengths of Maharashtra that contributed positively to the
economic growth of the state:
1. Per capita income 1.5 times the national average
2. 5% growth in last decade
3. Mature economy with growing services (55%),
4. Strong industry base (29%)
5. 27% share of bank credit, 33% growth (2000)
6. Highest credit-deposit ratio 84%, while India average 57%
7. 22% of new Company registrations
8. 1/2-2/3 rd of public funds devoted to infrastructure,
9. Highest power generation capacity: 15,000+ MW
10. 30% of India’s exports (jewellery/textiles/IT/leather/pharmaceutical/ plastics/electronics/horticulture)
11. Int’l & Nat’l airports handle>50% India’s foreign trade
12. Has the 8 th number of software export units (1,251).
13. It contributes 30% of the country’s software exports
14. The Indian’s largest number of ISPs is in Mumbai & Over 35% of total PC penetration is in Maharashtra.
Infrastructure
Railway track length
Road length
National Highway length
Domestic airport
International airport
Major cities linked
Ports 50
Industrial Zones & Parks 1
Export Processing zone 5
5,440 km
2,08,183 Km
2,959 Km
Mumbai, Pune, Aurangabad, Nasik, Nagipur
Mumbai
Table 22. Infrastructure Table
Ahmedabad/Bangalore/Calcutta/Chandigarh/Delhi/Hyderabad/Jaipur/Channi/Portblair/Thiruvanathapuram/ Vadodara.
19 Business Processing Outsourcing
35

Mumbai-Pune Road
The Mumbai-Pune Expressway, the most ambitious transport project
undertaken by the Government of Maharashtra, was opened to traffic
on the 5 th April 2000. Pune is well connected to the commercial
capital of India, Mumbai, which is within reach by road and air in 3-4
hours with the new express highway expected to further bring down
this time to just 2 hours by road. The digital network of Pune
Telecom, better bandwidth available from VSNL, Arvi earth station
and Iridium's earth station in Pune makes Pune a Gateway to the
world. To conclude, Pune is the right blend of peace and prosperity, a
potpourri of the old and new, home to sound education and industrial
infrastructure, and a city that is witnessing a major transformation, to
become the IT city of the 21st Century.
Maharashtra Industrial Development Corporation (MIDC) is the country's largest industrial infrastructure
provider. More than 215 industrial estates including 9 five star industrial estates and 63 growth centres
developed by MIDC. Pune has the highest power generation capacity in the country, at more than 14,000 MW.
The country's largest and most diverse infrastructure for the IT
industry emerged along the 'Knowledge Corridor' between Mumbai,
Navi Mumbai and Pune.
Figure 14. Mumbai-Pune Road
Figure 15. Knowledge Corridor: Mumbai-Navi Mumbai-Pune
Intelsat Standard installed C-Band Earth Station at Pune, Aurangabad
& Nagpur to provide top class connectivity across any point of the
globe. Ku-Band earth stations are installed at Nashik & Kolhapur
with additional fibre connectivity from Pune for redundancy. Pune
has a well spread out network of roads and railways with two international seaports and one international
airport besides four domestic airports are in operation. Two international airports at Navi Mumbai and Pune.
Navi Mumbai
Navi Mumbai is being developed as a counter magnet to Mumbai, with the
basic objective of attracting further growth of the mega city of Mumbai.
This modern city is being developed as a series of self contained nodes
along an efficient Mass Transport System. The well-planned transportation
network consisting of Road, Rail and Waterway systems makes Navi
Mumbai easily accessible from all parts of the country. The proposed
Domestic International Airport is envisaged to further enhance this
accessibility. A host of unique projects, such as the Multiplex and Family
Entertainment Complex, International Exhibition Centre, Amusement Park,
Golf Course, International IT Hardware Park are transferring Navi Mumbai
to the world standard city. Navi Mumbai, strategically located on the
proposed Mumbai-Pune `Knowledge Corridor', is receiving a lot of thrust
with respect to Information Technology. The Government of Maharashtra
has plans drawn up to develop Mumbai, Navi Mumbai and Pune as high
tech habitats for IT Industry.
Figure 16. Map of Navi Mumbai
The Pimpri-Chinchwad-Bhosari industrial complex is claimed to be one of the largest in the country. About
1044 units which qualify to be termed as large-scale industrial units, were established in the region in the
post-liberalisation. Around 100 of these projects could be termed as mega-projects. The District industries
centres are a focal point for development of small-scale industries. The Indo-American Capital and
Technology Corporation (ICAT) and the Dalamal group was basically set up to be a computer software export
zone primarily catering to the American market. The earth station, with single hop facility to the US and
global connectivity through a cable which power supplied by two separate power grids to assure 24-hour
supply, and this is backed up by diesel generator sets. The basic need of the IT industry is to be able to start
any project without any hassles and delay with the availability of ready infrastructure. Pune IT Park provides
ready infrastructure with good robust telecom infrastructure. MIDC too has played a very important role in
driving the growth of the IT parks in Pune. The Pune Info-tech Park (PIP) has added more to attract smaller
companies.
The State identified the following priority sectors: Engineering, Food Processing, Garments, Horticulture
36

The 3 main Industrial Clusters/Sectors in and around Pune:
1. Automobiles and Auto Components
2. Information Technology & Electronics Hardware
3. Biotechnology
How did Pune reach this growth?
It is Maharashtra Government's commitment to strengthen the State's leading position and to make its
Information Technology industry globally competitive. To give its efforts proper thrust, the Government of
Maharashtra has taken a number of policy initiatives in the areas of HRD, Infrastructure, Incentives to the
Information Technology industry and computerisation of Citizen-Government interface. MIDC also played a
big role to make Pune the hub of ‘IT enabled services’.
With its strong HRD and infrastructure, Maharashtra is well prepared to take full advantage of the Information
Technology revolution sweeping the globe. The State has a leading position in India, itself a nation with rare
potential in the Information Technology sector. The Centre for the Development for Advanced Computing, C-
DAC, which developed India's Super Computer, is located at Pune in Maharashtra. The State also boasts of
the largest number of software companies and accounts for the biggest portion of India's software exports.
Maharashtra is the most Industrialised state in India. Pune, located geographically in the heart of the state and
accessible by Air, Road & Rail Transport from all over the state is the ideal venue for an industrial exposition.
Ranjangaon Industrial Area, one of the best industrial parks in the country, was completely developed by
MIDC 20 in May 1999, after having acquired the land in the year 1993. The main objective was to promote
industrial growth and attract foreign direct investment. In the last 5 years, since plot allotment started,
projects worth Rs. 4,100 Crores have been established with big multinationals setting up base here. MIDC has
invested Rs.130 Crores for the development of the area and all efforts are being made to make this park the
only one of its kind.
With several giant projects in the offing, the region is a key growth-centre. The exhibition ground, situated
right in the middle of the city extends over an area of 25000 sq. meters. It has well established facilities for
all allied amenities/infrastructure required for a Trade fair. This Trade Expo provides an opportunity for
companies to display their products & expertise not only to the local buyers but also to national-level visitors
looking for tie-ups in the field.
Pune's transformation into an Information Technology city ready for the 21st century has largely been due to
the availability of specialized and professional manpower, infrastructure in terms of relatively cheap Real
Estate, abundant water and power. The credit goes to a number of institutions that have individually and
collectively worked towards such a vision to be converted into reality. This is a pace that is now gathering
momentum and will gather momentum in future. The core competencies of Pune are that it offers significant
opportunities to emerge as a global player in specific sectors with a focused strategic planning. Some of the
International prestigious industries are located in Pune. MIDC (Maharashtra Industrial Development
Corporation) was instrumental in bringing the development of a large industrial area of 4,000 acres at Bhosari,
which brought about a number of industries, small and big to concentrate in this area.
The industrial policy, infrastructure, innovation systems, related institutions and entrepreneurship
development are all elements that contributed to the dynamic development in Pune and Maharashtra. These
are discussed in details as follows.
1. Policy Issues
Maharashtra was the first State to set up policy for Special Economic Zone (SEZ) in the country. The
Industrial Policy of Maharashtra 1993 mainly aimed at simplification of procedures and rationalization of
rules. The Industry, Trade & Commerce Policy 1995 aimed at empowering people at all levels with special
focus on infrastructure development with private sector participation. A comprehensive Information
Technology Policy was announced in 1998, keeping in view the importance of the IT sector for employment
generation, its implications for industry and trade, the financial sector, media and entertainment, health,
education and research. The economic reforms initiated in 1991 brought about a paradigm shift in the
approach to economic growth, industrialization and income distribution. A number of control regimes were
dismantled in the areas of industrial policy, taxation, export-imports and foreign investment. De-licensing of
industry, de-reservation of the public sector, easing of competition controls, reduction of import tariffs, and
deregulation of interest rates. Steps for opening up of capital markets were among the reforms undertaken to
encourage investment and capital formation. The State has entered into the phase of second-generation
economic reforms, with emphasis on structural changes in addition to fiscal incentives for the promotion of
industry and balanced regional growth. This has coincided with increasing international competition and rapid
20 Maharashtra Industrial Development Corporation
37

technological changes which, pose new challenges for industry. The Industrial Policy 2001 has been
formulated in this context, keeping in view the objectives of sustained growth and employment and an
expansion in livelihood opportunities.
The most outstanding features of the new industrial policy are, revision of the industrial location policy for
Mumbai Metropolitan Region permitting non-polluting high-tech industries within the rationalised municipal
zones of Greater Mumbai, non requirement of the collectors' permission for purchase of land and its
conversion for industrial use in certain areas etc. According to the policy, private participation is being sought
in power projects, setting up of new industrial estate and infrastructure facilities. The state has been classified
into groups A.B.C.D. & D based on the extent of industrial development.
2. Incentives and resources
• General Incentives
Government of Maharashtra announced in 1993 the revised Package Scheme of Incentives under which
several benefits are extended to IT units. In order to identify the units eligible for these benefits, a system of
IT registration has been put in place for different kinds of IT units depending on their main activity i.e. IT
hardware/ IT software/ IT services/enabled services and composite IT units. The main component of
successive Package Schemes of Incentives was the grant of Sales Tax benefits to industries in developing and
backward regions of the State. In order to encourage Public Tele-info Centres, govt. provides govt. land on
lease for a period of at least 10 years on the same concessional terms and conditions as are applicable to
educational institutions. These centres are also eligible for assistance under the Package Scheme of Incentives.
http://www.cdacindia.com/ http://www.maharashtra.gov.in
These incentives include:
1. Special capital incentives of 15% of fixed capital investment, up to Rs. 0.7 million for SSIs in Area B
2. Special capital incentives of 20% of fixed capital investment, up to Rs.1 million, for SSIs in Area C
3. Special capital incentives of 25% of fixed capital investment, up to Rs. 1.5 million, for SSIs in Area D
4. Sales tax relief of 60% to 100% of fixed capital Investment for industries located in Area B
5. Sales tax relief of 75% to 110% of fixed capital Investment for industries located in Area C
6. Sales tax relief of 90% to 120% of fixed capital Investment for industries located in Area D
7. Sales tax relief of 125% to 130% of fixed capital Investment for industries located in Area D
8. Refunds, as a grant restricted to 100% of fixed capital investment for units in Area B (5 Years): Area C
(7 years) : Area D (9 Years): area D+ (12 years): & prestigious units (15 years)
Refund of entry tax, Exemption from electricity duty, Special capital incentive for small-scale units, Sales tax
exemption to village industries, Sales tax on IT products, Sick SSI units, Stamp duty on corporate
restructuring, and Stamp duty waiver are examples of offers in the Package Scheme of Incentives.
• Sector specific incentives
Information technology received special policy and incentives.
3. Support Institutions and Organizations
In Pune there are various research institutes. There are very important Defence Research & Development
Organization laboratories such as Institute of Armament Technology, High Explosive Material Research
Laboratory, Armament Research & Development Establishment, R&D Engineers, and Ordinance factory etc.
Other institutions are:-
1. Indian Institute of Modern Management, IIMM Pune.
2. Pune Institute Of Computer Technology
3. National Chemical Laboratory,
4. Automotive Research Association of India,
5. Central Institute for Road Transport
6. Small Industry Service Institute (SISI)
7. Export Promotion Councils.
8. Indian Institute of Technology (IIT), Mumbai
9. Maharashtra Industrial Development Corporation: To achieve balanced industrial development of
Maharashtra with an emphasis on developing parts and underdeveloped parts of the State to develop the
infrastructure of each and every district of Maharashtra and to facilitate entrepreneurs in setting up
industries at various locations.
10. Automotive Research Association of India (ARAI), Pune: The ARAI is a non-profit co-operative
industrial research organisation formed by the Indian Automotive Industry. Affiliated to Ministry of
Industry, Government of India. The institute is an autonomous organisation registered as a research
association under the Societies Registration Act XXI of 1860.
11. TATA Institute of Fundamental Research.
38

12. Indian Rubber Manufacturers Research Ass. (IRMRA), Maharashtra: IRMRA with its state of the art
facilities is extending their co-operation for the cause and concentrates upon development of rubber
products using both Natural Rubber and Synthetic Rubber and testing the same. IRMRA is a Cooperative
Scientific & Industrial Research Organisation (Affiliated to Ministry of Commerce & Industry,
Govt. of India) engaged in rendering technical services to Rubber and allied materials and accredited by
ISO-9001.
On the academic front, institutions like Pune University houses the Inter-University Centre for Astronomy &
Astrophysics (IUCAA), National Centre for Radio Astrophysics (NCRA), TATA Institute of Fundamental
Research (TIFR), and the Centre for Development of Advanced Computing (C-DAC) which, are emerged as
centres of excellence in their specific areas. Institutions like Ferguson College and the dozen or more
engineering and medical institutions have also made substantial contribution.
• Industrial States:
1. ADDL. AMBERNATH Industrial Estate. 2.AMBERNATH Industrial Estate
3. AMRAVATI Industrial Estate. 4.BUTIBORI Industrial Area
5. CHANDRAPUR Industrial Area. 6.CHINCHOLI Industrial Area
7. DRONAGIRI Industrial Area. 8.ISLAMPUR Industrial Estate
9. JALNA Industrial Area. 10.KANDEGAON Industrial Area
11. KAVATHEMAHANKAL Industrial Area. 12.KUSHNUR Industrial Area
13. MALKAPUR Industrial Area. 14.NANDGAON 5 Star Industrial Estate
15. LATUR Industrial Area. 16.PALUS Industrial Area
17. RANJANGAON Industrial Area. 18.SHENDRE Industrial Area
19. TEMBHURNI Industrial Area. 20.VILE- BHAGAD Industrial Area
21. WALUJ Industrial Area
4. Governance:
• Programmes
The Maharashtra Industrial Development Corporation (MIDC) has developed two industrial estates in the
immediate vicinity of Pune. In the MIDC industrial estates land, fuels, electricity, water and selected raw
materials are provided at subsidised rates to priority sector productions/companies. Suitable transport and
communication facilities are also offered. Thus the requisite infrastructure is made available and other
conditions are being made favourable for efficient and qualitative industrial productions. In the year 2000,
based on the huge potential in the city, MIDC also launched Pune Info-tech Park. The project was a huge
success with the campus being fully booked in just a span of 18 months. Spurred by the huge demand, MIDC
is now launching the second phase of Pune Info-tech Park spanning 600 acres. The constant efforts of
organisations like the Software Technology Parks of India (STPI) which, try to convert small but potentially
cities, has paid off with Pune making its presence felt as a serious contender in the Indian software race. As
well two (2) additional programmes were developed:
1. Warana Nagar Programme: The Warana Co-operative Complex has become famous as one of the
forerunner of successful integrated rural development resulting from Co-operative movement. The Warana
Co-operative Sugar factory registered in 1955, has led this movement resulting in formation of over 25
successful co-operative societies today.
2. Back-bay Reclamation Scheme: The Mumbai Metropolitan Region Development Authority was appointed
in 1983 as a Special Planning Authority at South Mumbai.
The following schemes are located in Pune:
• International Infotech Park, Vashi (I.I.P)
• International Technology Centre, Belapur (I.T.C.)
• Special Economic Zone, Navi Mumbai
• Millennium Towers, Sanpada
• Beverly Park, Kopar Khairane
• Biotech Park. Kalamboli
Pune's ability to carve and retain a niche for itself can be benchmarked to the three solid brands it established
for the country: PARAM, INDICA and BAJAJ:-
a. PARAM is a word meaning 'supreme'. It is also a handy acronym for parallel machine. a computing
platform that divides a large job into manageable chunks and then assigns them to a number of processors
working in parallel fashion to achieve very high speeds of operation. The Pune-based Centre for
Development of Advanced Computing (C-DAC) unveiled "PARAM 10000", marking the culmination of its
decade-long mission to take India into the tiny club of nations which build their own supercomputers.
b. INDICA TATA Engineering has registered the highest ever sales of 8,769 units of its small car INDICA in
March, a 67 per cent jump over sales of 5,284 units in March 2001. With this, the cumulative domestic sales
39

of INDICA TATA during 2001-02 have touched 64,035 units, which is a 46 per cent rise over sales during the
previous fiscal. With this, the INDICA has achieved the cash break-even for the fiscal, for the second time
since its launch.
c. BAJAJ was found in 1944. BAJAJ manufactures motorcycles, scooters, mopeds and three-wheelers, selling
them not only across India but in Asia, Latin America and Europe. As a responsible business entity, BAJAJ
focuses its social responsible business practices on rural development activities, principally around the areas
where it has manufacturing plants. These activities are run directly by the group of companies or through one
of several trusts of the BAJAJ group funds. The main trust is the JANKIDEVI BAJAJ GRAM VIKAS
SANSTHA Trust (JBGVS) which, was set up over 20 years ago to support local projects in and around the
cities of Pune. These have included integrating the development of the SALUMBRE group of villages,
including: agriculture extension; the provision of drinking water; education at pre-primary level;
establishment of a High School in collaboration with FINOLEX and Rotary Clubs; and health care. The most
recent activities of the JBGVS were in cooperation with the Maharashtra Government in its Model Village
Scheme in the Pune districts, in the drought area scheme of ZILLA PARISHAD, and the Hunger Project in
four villages in the Pune district. In 1995 BAJAJ together with the India Business and Community
Partnership Trust, helped the underprivileged young people to set up their own businesses and become
entrepreneurs. BAJAJ has also taken a leading role in alleviating pollution by launching 'Eco Friendly Weeks'
in several cities. As part of the overall quality improvement drive, BAJAJ has been improving its plants and
has consequently been awarded ISO 9001 Certificates for its WALUJ and AKURDI Plants.
5. Entrepreneurship and Training
Maharashtra has the strongest HRD infrastructure in terms of educational institutions with 900 engineering
colleges and technical institutions with turnout of 160,000 technocrats every year and 30% share of Indian
patents. As well Maharashtra has a very high literacy rate at 75%, highest number of patents filed in the State,
setting the pace for innovation in the country, and well-diversified and highly productive industrial base with
positive work culture.
To facilitate entrepreneurship activities MIDC simplified their procedures by compiling the various admin
procedures within MIDC for different needs of the entrepreneurs. Each year the Maharashtra Centre for
Entrepreneurship Development (MCED), Aurangabad trains 50,000 youth to take up self-employment
ventures. MIDC (Maharashtra Industrial Development Corporation) also develops plug-and-play Information
Technology entrepreneurship incubation facilities at Navi Mumbai, Pune and Nagpur to encourage first
generation software professionals to start their operations quickly.
The Sankhya Wahini project of the Government has selected Pune as one of the first level ten cities to be
connected over a wide bandwidth network (10 GBPS), which will allow quality education to be delivered
through distance education to every connected institution.
Students are attached to industries for one year of training in two parts for sandwich courses. Final year
project and M.E. dissertations of students are sponsored by industries in many cases. Interaction with
industry exists in number of ways. Experts are invited for curriculum development. They are also invited for
assessment of theory, laboratory and project work. Experts from industry are involved in academic activities
by inviting them as guest faculty and as emeritus Associate Professors. To strengthen the University-Industry
link and place the interaction on a more sound footing a Science and Technology Park (STP) has been set up.
Environment issues
Maharashtra pioneered a package of incentives for the encouragement of industries and the development of
backward areas, along with an Industrial Location Policy which sought to restrict industrialization in the
Mumbai Metropolitan Region to non-polluting and high-technology sectors as a measure of industrial, urban
and environmental planning.
Innovation and Learning
Innovative financing systems and forward-looking partnerships have been established. One of the most
effective schemes is the IT Initiatives Knowledge Corridor, Mumbai Navi-Mumbai-Pune. These schemes are
Summarized as follows:
1. IT Initiatives Knowledge Corridor, Mumbai Navi-Mumbai-Pune, the 1 st IT Corridor in the country
2. Linked by India’s first Expressway
3. ‘Knowledge Townships’ planned
4. Largest diverse infrastructure for IT in India
5. Millennium Business Park, India’s largest complex for IT software/services
6. Samruddhi Venture Park
7. International Info-tech Park, Vashi
8. Belapur IT Park
9. Mhape Electronics Zone
40

10. International IT Park
11. Kharadi Knowledge Park
12. Talawade IT Park (Anchor: Syntel)
13. Bhosari Electronics Complex
CIDCO 21 developed noteworthy innovations that participated in the development of the city as followed:
1. Use of land as prime resource to finance development,
2. Use of air space above railway stations as a resource,
3. Reserve pricing mechanism to ensure that projects reach their break even point at any point of time.
Growth Centres:
1. BARAMATI Growth
1. SHIRUR (RANJANGAON) Growth Centre
6. Access to Venture Capital
Private Venture Capital Organisations
1. Alliance Venture Capital Advisors Limited Fund/Investment Details:
Name of Fund: Swiss Technology Venture Capital. Fund Limited (SWISS TEC VCF)
Nature of Fund: Offshore fund DATE OF Establishment: September 1997
Authorised Capital: US$ 25 million Rs. 1000 million
2. Walden NIKKO India management company limited
Name of fund: Walden NIKKO India Ventures Company LDC
Date of establishment: 1996
Authorised capital: US $ 23.00 million
3. Indus Venture Management Limited
Name of Fund: Indus Venture Capital Fund-I
Nature of Fund: Trust fund
Date of Establishment: October 1991
Authorised Capital: Rs. 210 million
4. JF Electra Advisors (India) Limited
Name Of Fund: JF Electra (Mauritius) Limited
Nature Of Fund: Offshore fund
Fund Capital: US$ 40 million is available every year for investment mainly in unlisted companies in
India from Electra Investment Trust, U.K.
21 The City and Industrial Development Corporation of Maharashtra limited
41

Figure 17. Location of Gujarat in India
Presentation No. 4:
Region: Gujarat
City: Vadodara (Baroda)
Why Vadodara is selected as a Dynamic City Region?
Vadodara enjoys a special place in the state of Gujarat.
Till the early 1960’s Vadodara was considered to be a
cultural and educational centre. The first modern
factory (Alembic Pharmaceuticals) was established in
Vadodara in 1907 and subsequently companies such as
SARABHAI Chemicals, etc., came up in the 1940s.
By 1962 there were 288 factories employing 27,510
workers. At that time, the dominant industrial groups
were chemicals and pharmaceuticals, cotton textiles
and machine tools. The discovery of oil and gas in
Ankleshwar and North Gujarat led to the industrial
development of Gujarat significantly. The Vadodara
region is the largest beneficiary in the process of the
gas and oil industries. Gujarat Refinery went into the first phase of production in 1965. The refinery being a
basic industry made vital contributions on several fronts at the regional and national levels.
Gujarat exports for the year 1993-94 and 1994-95 have increased to Rs. 1,13,000 million, and Rs. 1,34,000
million respectively which is approximately 16.27% of the country’s export of Rs. 8,23,380 million.
Textiles and clothing sector is the largest employer after agriculture and its importance in India’s economy is
recognised for its contribution to industrial production and export earnings.
In 1962, Vadodara witnessed a sudden spurt in industrial activity with the establishment of Gujarat Refinery.
Several factors like raw material availability, product demand, and skilful mobilisation of human, financial
and material resources by the government and private entrepreneurs have contributed to Vadodara becoming
one of India’s foremost industrial centres.
In Vadodara various large-scale industries such as Gujarat State Fertilisers & Chemicals, Indian
Petrochemicals Corporation Limited and Gujarat ALKALIES and Chemicals Limited have come up in the
vicinity of Gujarat Refinery and all of them are dependent on it for their fuel and feedstock. Other large-scale
public sector units are Heavy Water Project and Gujarat Industries Power Company Limited. In addition to
these public sector enterprises, a number of other large-scale enterprises have come up in the private sector.
The products of these industries have wide applications in various sectors of the Indian economy. The
establishment of large industrial units in any region automatically brings into existence a number of smaller
enterprises. Vadodara is no exception. Therefore, the city and the surrounding areas are today humming with
industrial activity. The industrialisation of Vadodara has attracted entrepreneurs not only from Vadodara but
also from all over Gujarat and India. A large number of the entrepreneurs come with sound business
backgrounds, educational levels and technical skills are exceptionally high.
Table 23.General Information table
Capital
Gandhinagar
Area
1,96000 sq km
Population(Census 1991) 41.1 million
Principal Languages Gujarati
Urbanisation Ratio(1991) 34.4%
Literacy Rate(1991) 60.9%
Major Minerals
Textiles, soda ash, azodyes, sal nitrogenous fertilizers, viscose filament yarn, Cotton,
cloth, sulpuric acid, paper & paper board, casusic soda, cement.
Major Industries -
Major Crops
Tobacco, cotton, groundnut, cumin, sugarcane, mangoes, bananas, paddy, wheat,
bajra.
Pune is selected as a dynamic city-region focussing on the 3 main Industrial Clusters/Sectors in & around
Vadodara: Textile/Dyestuff, Chemical & Petrochemicals and Pharmaceutical. The following pages provide more
statistics and information on Pune with related figures and graphs.
42

Brief History of Vadodara city and Gujarat region:
Formed in 1960 as a separate State, Gujarat over the last 42 years emerged as a leading industrialised state in
the country proving to be, the ultimate destination for many investors India and from abroad to make
profitable investment. Gujarat, the second most industrialized State in India, has been on the industrial map of
the world since the late eighteenth century with its long-standing trade links with Europe, the Middle-East and
African countries. Situated in the Northwest part of the Indian peninsula, the State of Gujarat is bound by
Rajasthan in the North Madhya Pradesh in the East, Maharashtra in the Southeast, Arabian Sea in the West
and Pakistan in the Northwest. The State is endowed with abundant natural resources, the largest coastline in
India, industrially congenial atmosphere, entrepreneurial people and a comparatively high standard of living.
Progressive and constructive policies adopted by the consecutive State Governments coupled with the
inherent geographical advantages, have converted Gujarat into one of the most encouraging investment
location in India. A fully developed infrastructure network, dependable power supply, adoption of advanced
technologies and a highly motivated and skilled workforce are behind the phenomenal emergence of Gujarat
from the status of eighth industrialized State in India in 1960, to the present second rank.
Gujarat is the centre of the Indian cotton-textile industry. With the population of 4.88% of the country’s, yet
contributes 11% of India’s GNP and 10% to the national consumption. Gujarat is amongst the first 4 States
having per capita income above the national average. In Gujarat exists 3 Stock Exchanges and the 4 th is
coming up. Gujarat enjoys with Maharashtra the highest productivity per employee/worker in India.
Strategic location giving accessibility to the western markets-Gateway and other developed countries. The
State has also been successful in achieving industrial dispersal to a great extent with a number of industrial
areas emerged around the whole State.
Gujarat contributes about 16% of total export in the country, and is the leader in export of dyes, intermediates,
drugs & pharmaceuticals, diamond, gems & Jewellery with a share of about 40%, 45% and 70% of total
export in the country respectively. Gujarat also contributes significantly in ready-made garments and export in
handicrafts. With its 1600 km long coastline, Gujarat contributes with an export of about 10% of marine
products of the country.
The State has also been successful in achieving industrial dispersal to a great extent. Islands of progress like
UMBERGAON, VAPI, HAZIRA, etc in South Gujarat; HALOL-KALOL, VAGHODIA, SAVLI, and
NADIAD in Central Gujarat; KADI, MEHSANA, KALOL, and AMBAJI in North Gujarat; MORBI, SIKKA,
MITHAPUR, JETPUR, VERAVAL, have come up. These are in addition to city centres and peripheral areas
of Ahmedabad, Vadodara, Surat, Rajkot, Bhavnagar and Jamnagar.
It is an odd feature of Gujarat that IT has never been a priority, as it has with other states. Vadodara had the
fortune of having some of the most competent persons. This helped in the overall development of the State
and of the Railways in particular.
Vadodara (Baroda) attraction
Vadodara is situated on the banks of the river Vishwamitri (whose name is derived from the great saint Rishi
Vishwamitra). The city was once called Chandravati, after its ruler Raja Chandan, then Viravati, the abode of
the brave, and then Vadpatra because of the abundance of banyan trees on the banks of the Vishwamitri. From
Vadpatra it derived its present name Baroda or Vadodara.
Vadodara (Baroda) is one of the India’s most cosmopolitan cities. So, the culture of the city is not just history
or heritage; it is dynamic, ever changing and alive. Thanks to the vision and broadmindedness of the
subsequent industrialisation, the increase of academic activities and a strategically important geographical
location.
More or less every Indian community has an active identity in this city. And this happy co-existence is
reflected in the social and cultural life of the people. In all of this, the sprawling and cosmopolitan University
campus and the large number of local, national and foreign industries act as a catalysing and unifying force.
The average Barodian is open to the world and overflowing with hospitality, as the history and growth of the
city can easily be testify. Vadodara (Baroda) is blessed by its geography and its history. It is the home of a
vibrant internationally renowned university which, is a key component of India’s industrial base.
Ahmedabad-Vedorara industrial belt: This region became important textile region with the decline in the
textile industries in Mumbai. The industries in the region are now diversified. Besides textiles and textile
machinery and Petro-chemicals other industries in the region are diamond, diesel engines, and
pharmaceuticals.
43

Industrial base for Gujarat,Vadodara and Ahmadabad
Gujarat is one of the leading producers in India of
many industrial products. Gujarat is producing
100% of total production of the country in some
specific chemicals and petrochemicals.
Table 24. Number of small-scale industrial units
1989 1990 1991 1992 1993 1994
Gujarat 105685 115384 126898 138644 152569 163592
Ahmadabad 27,185 29,661 32,399 34,630 37,425 40,134
Vadodara 6,239 6,648 7,282 7,999 8,728 9,375
Source: Chief Inspector of Factories, Gujarat State/Ahmedabad.
Vadodara has witnessed establishment of medium and large scale industries. With great strides in economic
field, the city has giant industrial complexes and public undertakings like Gujarat Refinery, Indian
Petrochemicals, Gujarat State Fertilizers, Heavy Water Project, Oil & Natural Gas Commission etc.
Table 25. Gujarat Region: Facts and figures
Area
Location
196,024 Sq Km
South West of India
Rainfall (average)
653 mm
1. Population
a) Gujarat population
POPULATION
State/UT*
Persons Males Females
Population Variation
1991–2001
Sex ratio
(Females per 000 males)
Gujarat 50,596,992 26,344,053 24,252,939 22.48 921
Table 26. Gujarat population
b) Vadodara (Baroda) population
Population:
Persons 3,089,610
Males 1,614,979
Females 1,474,631
Sex Ratio: 919
Number of Literates:
Persons: 1,669,078
Males: 1,018,886
Females: 650,192
Table 27. Vadodara population
Population (0 - 6 years):
Persons: 465,491
Males: 240,635
Females: 224,856
2. Composition of Industrial Growth
The Ahmedabad/ Vadodara/ lndore belt is No.' 5 with revenues of Rs 80 Crore from 7 companies.
As per the Annual State Industrial census the exfactory
value of output in Textiles Chemicals,
Rubber products, Machinery and all industry in
Gujarat has increased to Rs. 32,500 million, Rs.
82,040 million, Rs. 18,800 million and Rs. 368,520
million respectively in 1990-91 from the values of
Rs. 1,950 million, Rs.330 million, Rs. 30 million and
Rs. 3,030 million in 1961-62. These figures indicate
impressive growth in these sectors.
Vadodara continues to attract large numbers of
Ahmadabad
Years
Vadodara
unskilled job seekers and daily-wagers beside skilled
Figure 18. Composition of Industrial Growth
and educated workforce. The former has led to the
growth of slums where poor working class people live. The State Government of Gujarat always thinks of
developing the industrial states of the Gujarat Industrial Development Corporation (GIDC) and industrial
parks but never plans for housing of the workers. Vadodara offers a profile of a medium-sized fast
developing city. The situation of poor workers within and around Vadodara creates severe contradictions
negatively affecting its potential of growing into a ‘tolerable’ living place.
The following percentages show the Economic Strengths of Gujarat that contributed positively to the
economic growth of the state:-
1. High rate of per capita investment in new industrial investment. Gujarat rank 1 st among Indian
industrialised States.
2. The 1st State to establish an International Trade Promotion Council at State level for promotion of
exports,
3. The first in the production of fluorite, agate & chalk.
Value (000)
Gujarat
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Small-Scale industry Units, Gujarat, Ahmadabad & Vadodara
1989 1990 1991 1992 1993 1994
44

4. The highest number of investors/capital investment,
5. The second in India in terms of industrial production,
6. The second for production of lignite, petroleum and moulding sand,
7. The fourth in the overall production of minerals,
8. Tremendous scope for the development of industries based on Horticulture and Floriculture and
exploitation of waste lands, with investment opportunities for forward and backward linkages with
mature industrial segments,
9. Industrial estates with well developed infrastructure and marketing facilities,
10. Easy availability of qualified manpower resources,
11. Opportunities for participation in infrastructure development - Road, Power and Port.
Infrastructure
Over the years Gujarat has been able to develop an overall infrastructure network conducive for fast industrial
growth. More than 90% of the villages of Gujarat are connected by commutable roads and as many as 3
National Highways and many State Highways connect important industrial locations in the State to all the
major cities in India. Gujarat is also connected to all metropolitan and other major cities in India through
broad railway lines. Gujarat has the largest number of Airports (10) and also the largest number of ports (41)
in the country, which enables easy global accessibility. The demand-supply gap in the power sector has been
considerably reduced over the years. To cater to the rising demand of energy, the power sector was made open
for private investment. Non-conventional energy resources are also being commercially exploited. A 10 MW
wind farm (PAVAN SHAKTI) was established in Gujarat to compensate for the shortages.
The GIDC operates and maintains industrial estates in various districts of Gujarat State. These estates are selfcontained
and capable of sustaining a large number of industries within themselves. Gujarat State is divided
into "Districts" which are further sub-divided into "Talukas". GIDC has planned for 274 Industrial Estates of
which 168 are developed and functional.
The Gandhinagar-Sarkhej highway, on the outskirts of Ahmedabad, is an addition and has facilitated a
definite shift in commercial space, from the congested Ahmedabad Municipal Corporation (AMC) limits to
areas outside the municipal limits.
To meet the water demands for domestic and industrial purposes, the State Government has taken many steps
including the ambitious SARDAR SAROVAR Project
Table 28. Infrastructure Table
Railway track length
Road length
National Highway length
5,890 km
68,900 Km
1,572 Km
Domestic airport
10, Ahmedabad, Bhavnagar, Bhuj, Jamnagar, Kandla, Keshod, Porbandar,
Rajko, Surat, Vadodara
International airport
1, Ahmedabad
Mjor cities linked
Bangalore, Calcutta, Delhi, Chennai, Mumbai, Vadodara
Ports 41
Industrial Zones & Parks 263
Export Processing zone 1
The State identified the following priority sectors: Electronics, Garments, Gems & Jewellery, Handlooms,
Leather.
The main Industrial Clusters/Sectors in & around Vadodara
1. Textile/Dyestuff
2. Chemical & Petrochemicals,
3. Pharmaceutical, Mineral based, Agro based Industries including Food processing (Sugar), and Engineering
How Did Vadodara reach this growth?
The infrastructure, innovation systems, related institutions and the available entrepreneurship spirit are all
elements that contributed to the dynamic development of Gujarat and Vadodara.
Infrastructure facilities such as development of port with bulk handling facilities, setting up of container depot
near major industrial towns, facilities for product testing and development and encouraging small and medium
units for adoption of total quality management and ISO certification are some of the steps the Government
already undertook for the promotion of export from the State.
45

Vadodara is on the major rail and road joining Mumbai with Delhi and Mumbai with Ahmedabad. Because of
this Vadodara is known as a ‘Gateway to the Golden Corridor’. National Highway No. 8 passes through the
city. All super fast and express trains halt at Vadodara Railway Station. Vadodara also has an airport, which
is very well connected with the other major airports of India. The industrial strength of Gujarat has also
supported the industrial growth in Vadodara.
The elements that contributed to the dynamic development of Vadodara and Gujarat are discussed in details as
follows:
1. Policy issues
The new Industrial Policy of Govt. of Gujarat lays down a special emphasis on export sector. State
Government adopted specific policy for promoting export from the State with higher value addition. For this
purpose, emphasis was made for special promotion was derived from agro and food industries and
development of aqua culture, electronics, garment, handicrafts, leather, gems and jewellery. These sectors
have been declared as thrust areas for promotion of industrial development in the State to be added to the
existing industries of the State.
The policy offers an attractive package of incentives to accelerate the industrial growth in the state. The objectives of the
policy are: Accelerate development of the backward areas, creation of large scale employment opportunities, increases of
total flow of investment to industrial sector, accelerating the development of infrastructure and human resources to sustain
the long term growth, achieving sustainable development.
2. Incentives and resources
Gujarat was the first State to announce special incentives for setting up 100% EOU 22 s in the State. It is also
the first State to establish an International Trade Promotion Council at the State level for assisting exporters.
The State Government through its various agencies has been successful in attracting considerable foreign
investment in the State since 1970s. The new industrial policy adopted by the Government further signifies
the commitment towards progress. The incentive policy effective for a period of 5 years from August 1990
aims at:
1. Balanced industrial growth in all the regions of the State
2. Generating employment potential of at least 1 million persons during the eighth five-year plan.
3. Establishing export oriented industries and inviting foreign and NRI Investment in the State.
4. Promoting labour intensive industries in cottage, handloom and handicraft sectors and thereby
generating self-employment.
This new approach has given the State the unique status of attracting a significant volume of Foreign
Investment by the end of 1994. Many multinational companies like ASEA Brown BOVERI, Huber etc. are
setting up their units with 100% equity in Gujarat in the areas of automobiles, heavy engineering, power, etc.
1. Capital investment subsidy of 35% of he fixed eligible capital (FEC) investment in category-I, 25% in category-
II, 30% of FEC in SSI (Max. Rs. 3 million) for category-I, 20% in category-II, 30% (Max. 25% million)
medium & Large Industries, 20% (1.5 million) in category-II.
2. 100% of FCI for a period of 9 years for Tiny & SSI in Category-I
3. 100% of FCI for a period of 6 years for Tiny & SSI in Category-II
4. 80% of FCI for period of 9 years for M&LSI in Category-I
5. 60% of FCI for period of 6 years for M&LSI in Category-II
6. Pioneer units subsidy have 30% (up to Rs. 2.5 million) 20% (up to Rs. 1.5 million) of FCI for Category-I & II
respectively.
7. Additional sales tax benefit of 100% of FCI up to 10 Years for Category-I and 75% for 8 year for category-II
8. 100% of EOU units, 100% of FCI for a period of 10 years sales tax benefit, 75% for FCI for 8 year.
9. Special incentives for Electronics Industry i.e. capital investment subsidy between 25% & 35% up to Rs. 3.5
million.
10. Subsidy of 40% of fixed capital up to Rs. 2 lack for entrepreneurs belonging to disadvantaged groups.
11. Unveiled portion of sales tax incentives for new promoters reviving sick units.
12. Subsidy on 50% capital investment on social infrastructure projects.
13. New scheme for promoting small and ancillary units on the basis of local resources and skills.
14. Special incentives for purchase of environment-friendly plant and machinery.
3. Support Institutions and Organizations
1. Entrepreneurship Development Institute of India, Ahmedabad
2. Small Industry Service Institute (SISI).
3. Gujarat International Trade Promotion Council.
4. Gujarat Industrial and Technical Consultancy Organisation Ltd. (GITCO).
5. Gujarat Board for Industrial and Financial Reconstruction (GBIFR) for rehabilitation of SSI and non-
BIFR viable sick units.
22 Export Oriented Units
46

6. Gujarat Industrial Devlop’t Corporation (GIDC).
7. East Midlands Indo-British Trade Council
8. GWZ - A Trade Partner from Germany
9. Indian Ind’l. & Manag’t Services (IIMS) Ahmedabad
10. Textile Institutions: The main objective of these institutions is to carry out research and render
consultancy services (quality Management Service - ISO-9001) to industry on various aspects of
textile technology with a view to reducing the cost and improving the quality and durability,
reducing pollution, conserving energy and utilizing waste, adopting new technology and improving
the technologies in the decentralised sectors. A large number of research projects of considerable
importance are already going-on in several fields of textiles.
• Industrial Associations:
1. Ahmedabad Textile Industry Research Ass. (ATIRA)
2. Bombay Textile Research Association (BTRA)
3. South India Textile Research Association (SITRA)
4. Northern India Textile Research Ass. (NITRA)
5. Synthetic & Art Silk Mills Research Ass. (SASMIRA)
6. Man-made Textile Research Association, (MANTRA)
7. Indian Jute Industry's Research Association (IJIRA)
8. Wool Research Association (WRA)
• Industrial States:
1. JHAGADIA Industrial Estate
2. SAVLI Industrial Estate
3. VILAYAT Industrial Estate
4. Governance
The Govt. of Gujarat implemented the following schemes with incentives for setting up employment-oriented
industrial parks, high-tech parks, investment -oriented parks and trade centres.
• Programmes
1. Special Export Zones (SEZ) units are units that can function as Manufacturing, Trading or Service
activity units. The Govt. of Gujarat established SEZs to facilitate exports and trading. The KANDLA
Special Economic Zone (KASEZ) provides a competitive free environment for exports. The first Free
Trade Zone at Kandla Port is closest on the Indian coast to the Middle East, Europe, CIS and Africa
having extensive handling facilities for large volume of dry, bulk break liquids, chemical and general
cargo. With these facilities, a special drive towards promotion of export by the State Government made a
quantum jump in export in Gujarat.
2. The Industrial Parks Scheme 2000’ through private agencies. This Scheme of Industrial parks is set up
by the private sector apart from the industrial estates being set up by Gujarat Industrial Development
Corporation.
3. Scheme for rehabilitation of sick Small-Scale industries. The Scheme is applicable only to Small Scale
industrial units/ancillary units in the manufacturing sector whose total investment in plant and machinery
exceeds Rs. 5 Lakh excluding fixed assets.
Resources
Gujarat is endowed with abundant supply of natural resources. Besides Crude Oil and Natural Gas, other
important minerals available in the State are Bauxite, Limestone, Lignite, Calcite, and Dolomite, China clay,
Silica, Fluorspar, Chalk and Fire clay. Gujarat is a leader in the production of various agricultural products
e.g. Castor, Groundnut, Tobacco, Cotton etc.
Innovation and learning
Growth Centres
The following growth centres are established to facilitate the process of innovation through technology testing
and improving:-
1. Growth Centre of VAGRA,
2. Growth Centre of PALANPUR
3. Growth Centre of GANDHIDHAM
5. Entrepreneurship and Training
Gujarat business community is well known for its entrepreneurship skills and it has a strong presence in
several parts of the world. This spirit of entrepreneurship has made Gujarat one of the most industrialised
States in India. The Gujaratis have spread to many parts of the world, notably East and South Africa, UK and
USA. Many of them have made a mark in the business world.
47

The Directorate of Employment & Training (DET) of Gujarat is one such Government Organization that has
been entrusted with the task of providing skilled manpower to the industries and providing training to the
youth in industrial skills and craftsmanship. Providing Employment/Placement services to the job seekers of
the State is one of the most important activities of this Organization. http://www.talimrojgar.org
6. Access to Venture Capital
Started by GIIC with the assistance of the World Bank, in July 1990, Gujarat Venture Finance Limited is
regarded as a pioneer of Venture Capital in India. Formed with the idea of focussing on the needs of the first
generation entrepreneur, GVFL 23 operates as a Trustee and Manager of two funds, the GVCF 24 - 1990 and
GVCF - 1995.
Venture Capital Funds:
1. Name of fund: Gujarat Venture Capital Fund 1990 (GVCF)
Nature of fund: Trust fund
Date of establishment: November 1990
Date of maturity: November 2005
23 Gujarat Venture Finance Limited
24 Gujarat Venture Capital Fund
48

Figure 19. Location of Delhi in India
Presentation No. 5:
Region: Delhi (Union Territory)
City: Delhi (Municipal Corporation)
Why Delhi is selected as a Dynamic City Region?
In just 25 years, the Delhi State Industrial
Development Corporation (DSIDC) has emerged
as the lifeline of industries and created an
environment, which has transformed Delhi city into
an industrially advanced center. Delhi is becoming
a role model for similar cities in the country.
Delhi's Small Scale Industries produce goods,
which have greatly contributed to exports. The city
has come to be known for quality products in the
fields of Garments, Electronics, and Engineering
Items.
Delhi is selected as a dynamic city-region focussing on the main Industrial Clusters/Sectors in & around
Delhi, i.e.: sugar, textiles mills, glass, chemicals, engineering, paper, electronics and cycle. The following
pages provide more statistics and information on Delhi with related figures and graphs.
Table 29. General Information Table
Capital
New Delhi
Area
1,483 sq km
Population(Census 1991) 9.49 million
Principal Languages Hindi, Punjabi, Urdu
Urbanisation Ratio(1991) 89.9%
Literacy Rate(1991) 76.1%
Major Minerals -
Major Industries
Manufacture of razor blades, sports goods, radio and T.V. parts, plastic and
PVC goods, textiles, chemicals, fertilizers, soft drinks, hand and machine tools
Major Crops
Wheat, Maize, Vegetable and Fruit crops
Brief History of Delhi Region:
In the past decade Delhi’s population has increased by 50%, largely due to rapid economic expansion and
increased job opportunities. The downside of this boom is increased overcrowding, traffic congestion,
housing shortages and pollution. Delhi has a rich heritage of skilled craftsmen. In old times Delhi gained its
importance in arts, crafts and industries like Jewellery, embroidery, silver vases/bowls, tea sets, ornamental
jewel boxes made of brass, silk and silk embroidery, ivory carvings, handloom, textiles, copper and brass
utensils. In the later half of the 19th century three iron foundries and engineering works were established in
Delhi. Delhi's textile industries foundation were laid by the installation of two cotton weaving and spinning
mills. First ice factory was set up in 1907 and the first flour mill in 1917, first match factory in 1931, first oil
mill in 1932 and the first acid factory in 1934. During the period of 1981-82 to 1989-90 there was an increase
of about 62% in the number of industrial units.
Delhi is a city of contrast, one of the oldest cities in the world and now one of the most progressive. Delhi
combines the ancient and the modern side by side. It is India's show window. A truly cosmopolitan city that
has brought within its fold people of all ethnic groups and their traditions and culture, reflected in a variety of
arts, crafts, cuisines, festivals and lifestyles. The huge city is divided into Old and New Delhi; the former also
comprise the seventh city of the Mughals - Shajahnabad. Delhi is an energetic city with music concerts,
dance festivals, theatre performances and art exhibitions.
New Delhi was formally inaugurated in 1931 25 . Following the British decision to shift the capital of imperial
India from Calcutta to Delhi in 1911, two British architects, Sir Edwin Lutyens and Sir Herbert Baker were
commissioned to design a new city in India. This new city is today the capital of modern India.
Figure 20. Greater Noida
25 After three hundred years long British rule, India become an independent country on August 15, 1947.
49

Delhi attraction
Delhi, the capital city of the Federal Republic of India, is
blessed with a great number of tourist places. It is one of
India's fastest growing cities. The city expanded over the
West Bank of the river Yamuna. It has two distinct parts, Old
Delhi & New Delhi. The streets of Old Delhi are narrow &
bustling. The beauty & serenity lies inside the courts of the
main buildings. Delhi has some of the finest museums in the
country. Its boutiques and shopping arcades offer access to a
wealth of traditional and contemporary crafts, from all over
the country.
Delhi (and adjoining regions) industrial belt: The region
covers Delhi Agra Meerut, Mathura, Saharanpur in Uttar
Pradesh. Another parallel belt extends between Faridabad, Gurgaon, Panipat, Ambala, Ludhiana, Jullandhar
and Amritsar. The important industries existing in the region are sugar, textiles mills, glass, chemicals,
engineering, paper, electronics and cycle.
Delhi is well connected to Noida and has a tight integration with it. The Delhi-Noida Toll Bridge reduces the
travel time between Delhi and Greater Noida. Greater Noida 26 has an excellent infrastructure with “No
Pollution” environment and is well connected to Delhi. It has the country's first trade mart which, is a modern
shopping complex with all kinds of facilities. Greater Noida Industrial Development Authority has developed
a model integrated industrial township, which is located in the state of Uttar Pradesh on the fringes of Delhi. It
is in the close proximity of major industrial townships. The Greater Noida Authority has carefully planned
and nurtured a self-sufficient industrial township well endowed with requisite infrastructure and logistical
support systems. The Authority firmly believes and practice the principle of infrastructure to precede
development and strives to have a world-class infrastructure and essential services like: power,
telecommunications, water supply, sewerage and drainage, solid waste, management, and security.
Greater Noida Development Authority is developing a "Knowledge Park' with the aim of providing quality
institutional facilities for education and research. The under lying ideas is to develop an area close to Delhi to
cater to Greater Noida, Delhi and other nearby areas for its basic-educational, technical, vocational, research
and cultural needs. The Greater Noida Authority has earmarked 570 acres for the Knowledge Park. Allotments
have already been made to 150 institutions. These institutions range from schools, management institutes,
vocational training institutes, institutes for the handicapped, maritime institutes etc.
Industrial investment taking place in Greater Noida is now over Rs. 9,590.97 Crore. It is now becoming one
of the favoured location for good industrial investment specially of multinational investment because of its
good infrastructure near Delhi and effective single window system of speedy decision making and clearances.
Gurgaon is a New Delhi suburb and is 25 KM away from it. Noida is yet to get an airport, Gurgaon already
has it. This, probably, is the single biggest reason why corporate, particularly the service sector multinational
companies, choose Gurgaon and Manesar over Greater Noida when relocating themselves from the central
business districts of overcrowded Delhi. This is despite the fact that land rates, both for residential and
commercial establishments are much lower in Greater Noida than in either Gurgaon or Manesar.
Delhi has some building and road making materials and some China clay deposits. The building and road
making material comprises sand and stone. The available quartzite rock is very useful for the manufacture of
stone wares and buildings. Kaolin is used as a principal raw material for some light industries and fire clay for
brick manufacture and china ware. Most important goods manufactured and exported in Delhi are readymade
garments. The imported things are electronic components. The important trading products in Delhi are fruit
and vegetable, food grain, fodder, cloth, bicycle, and hosiery.
Delhi (and adjoining regions belt): The region covers Delhi Agra Meerut, Mathura, Saharanpur in Uttar
Pradesh. Another parallel belt extends between Faridabad, Gurgaon, Panipat, Ambala, Ludhiana, Jullandhar
and Amritsar. The important industries existing in the region are sugar, textiles mills, glass, chemicals,
engineering, paper, electronics and cycle.
Industrial Base in and around Delhi 27 Table 30. Number of Factories In Delhi, 1981-2000
26 http://www.greaternoida.com/index.htm
27 http://delhiplanning.nic.in/Economic%20Survey/Ecosur2001-02/PDF/chapter9.pdf
50

The private sector is playing a big role in the industrial activities in
Delhi. Table1 shows the number of the factories managed by the private
sector and those managed by the public sector.
Table 30 shows that a wide spectrum of products are being
manufactured by the industrial units in Delhi 28 . The product-wise
profile of Industrial units in Delhi is given below:
It can be seen from table 2 that fabrication of garments, electrical
appliances, consumer electronics, printing and publishing units, plastic
goods, metal & machinery parts & food processing units are major end
products of industrial units in Delhi.
Table 31. Product-wise industries
Number
1 Food products 3,827
2 Beverage, Tobacco and Tobacco products 64
3 Cotton textiles 406
4 Wool, Silk, Synthetic products 2,006
5 Jute, Hemp & Jute products 33
6 Textile products (including wearing apparel other than footwear) 15,166
7 Wood & Wood products, furniture and fixtures 2,633
8 Paper & Paper products. Printing. publishing and allied industries 5,662
9 Leather and Leather products 1,495
Year Private Government Total
1981 3298 102 3402
1982 3530 104 3685
1983 3735 111 3902
1984 3639 116 4144
1985 4146 118 4324
1986 4341 117 4520
1987 4572 122 4765
1988 4988 125 5188
1989 4618 119 4804
1990 4783 122 4973
1991 4954 137 5162
1992 5198 139 5410
1993 5323 138 5481
1994 5425 137 5781
1995 5794 138 5945
1996 5925 138 6076
1997 6077 139 6229
1998 6198 139 6350
1999 6344 139 6496
2000 6531 138 6682
Source: Directorate of Economics & Statistics
Area
Table 32. Delhi Region: Facts and figures
Location
Rainfall (average)
196,024 Sq Km
South West of India
653 mm
10 Rubber, Plastics, Petroleum, Coal Products 4,599
11 Chemicals and allied products 2,025
12 Non-metallic mineral products 1,387
13 Basic metal and alloy industries 3,114
14 Metal products except machinery and transport equipment 5,780
15 Machinery, machines, apparatus, appliances (including electronics) 7,280
16 Electrical machinery, apparatus, appliances (including electrical) 4,032
17 Transport equipment 2,844
18 Other manufacturing industries 3,014
19 Miscellaneous and servicing industries 1,292
20 Repair services 10,782
21 Others 962
Total 76,559
Source: Labour Department, Government of NCT of Delhi.
2. Population
a)Delhi UT
POPULATION
State/UT* Persons Males Females
Population
Variation
1991–2001
Sex ratio
(Females per
000 males)
Delhi 13,782,976 7,570,890 6,212,086 46.31 821
Table 33. Delhi UT (Source: Provisional Population Totals: India. Census of India 2001)
28 Industries census, 1988.
51

) Delhi Municipal Corporation
Population:
Persons: 9,817,439
Males: 5,378,658
Females: 4,438,781
Sex Ratio: 825
Number of Literates:
Persons: 7,102,271
Males: 4,114,691
Females: 2,987,580
Sex Ratio: 726
Population (0 - 6 years):
Persons: 1,279,698
Males: 686,170
Females: 593,528
Sex Ratio: 865
Table 34. Delhi Municipal Corporation (Source: Provisional Population
Totals: India. Census of India 2001)
2. Composition of Industrial Growth
Delhi has gone through a rapid process of
urbanization. The Master Plan for Delhi rules the
setting up of large and heavy industries. There is,
however, scope to expand small-scale industries. The
availability of infrastructure, wholesale markets, trade
and other commercial services have promoted the
expansion of small-scale industries in Delhi.
Year
Table 35. Growth Of Industrial Sector, 1951-96
Number of
Industrial
Units
Investment
(Rs. Crore)
Production
(Rs. Crore)
Employment
(number)
1951 8,160 1,813 35.35 95,137
1961 17,000 60.00 121.00 187,034
1971 26,000 190.00 388.00 291,585
1981 42,000 700.00 1,700.00 568,910
1991 85,050 1,659.00 4,462.00 730,951
1996 126,218 2,524.00 6,310.00 1135,962
Source: Estimated by the Dte. of Industries, GNCTD.
There has been tremendous growth in the number of small-scale industries (SSI) in Delhi since 1951, and it
has emerged as one of the biggest centers of small-scale industries in the country as indicated above.
The National Capital Territory of Delhi has
emerged as one of the biggest centers of small
scale industries in the country. The statistics in
the adjacent table indicate the industrial
progress in Delhi over the years 1951-96.
Table 36. Industrial Progress in Delhi
Items 1990 1991 1992 1993 1994 1995 1996
Infrastructure
Delhi constitute a centre of both national and international importance. Delhi is well connected by road links
with different parts of the country. As well it is well connected by air Service to different parts of the country
and the world. The Grand Trunk road, which is a national highway of great importance, passes through Delhi.
Delhi was opened to railway traffic on January 1, 1867. The Delhi Ambala-Kalka railway was opened on
March 1, 1891. Today, Delhi is well connected by rail to different parts of the country through its 3 main
railway stations. i.e., New Delhi, Delhi Junction and Hazrat Nizamuddin.
Table 37. Infrastructure Table
Railway track length -
Road length -
National Highway length -
Domestic airport Palam airport
International airport Indira Gandhi International airport
Major cities linked
Ports -
Industrial Zones & Parks 2
Export Processing zone -
NO. of Industrial Units (in’000’) 81 85 89 93 97 101 126
Investment (Rs. in Crores) 1580 1659 1750 1823 1901 1980 2524
Production1 (Rs in Crores) 4250 4462 5000 5115 5335 5555 6310
Employment (in’000) 729 765 802 837 873 909 1136
Source: Directorate of Industries, Govt of National Capital Territory of Delhi
Ahmedabad, Bangalore, Calcutta, Chandigarh, Guwahati, Hyderabad, Jaipur, Lucknow,
Chennai, Portblair, Thiruvanathapuram, Vadodara, Pune
The main industrial sectors/clusters
The State identified priority sectors are: Hotels, Power, Tourism, Transportation.
The major industries in Delhi are: 29
1. Textiles, 2. Chemicals, Fertilizers, Plastic and PVC Goods,
29 http://iic.nic.in/iic6_a.htm
52

3. Soft Drinks, 4. Sports Goods,
5. Radio and T.V. Parts, 6. Hand and Machine Tools, Manufacture of Razor Blades.
How did Delhi reach this growth?
The industrial policy, infrastructure, innovation systems, related institutions and entrepreneurship
development are all elements that contributed to the dynamic development in Okhla and Delhi. These are
discussed in details as follows.
1. Policy Issues
The policy lays special emphasis on promotion of industries which can achieve optimum level of production
with less space, power and can generate employment for skilled persons and sophisticated industries produce
high value added items touching areas of new technology. The Delhi Policy Group (DPG) 30 is an independent
think tank supported by the corporate sector. The endeavour of the Group has been to lay the foundation for
fresh thinking on government policy and to influence the formulation and execution of the national policy
through analysis, criticism and interaction. The DPG facilitates interaction between planners, legislators,
bureaucrats and thinkers. It conducts seminars and workshops with national and international guests. It also
initiates studies and research projects.
The policy statement emphasized the promotion of sophisticated industries that can achieve optimum levels of
production using less space and power while generating employment avenues for skilled persons. In order to
clean up the environment, emphasis was placed on encouraging non-polluting and non-hazardous units in
Delhi. Household industries are permitted. 73 industries had already justified their existence and operation in
residential houses with a maximum power load of 5 kilowatt. Their industries are permitted with the provision
that the industry does not cause pollution or congestion and could be operated within a space of 30 square
meters.
2. Incentives and Resources
Apart from the basic amenities the Authority and the state government has offered attractive benefits and
incentives to the organisations that are functioning in Greater Noida.
• Subsidy of 50%, up to Rs. 0.05 million, of investments in anti-pollution equipment
• Reservation of 10% factory sheds for women entrepreneurs to be allotted at JHANDEWALAN Complex
• Finance at the rate of 12.5% through Delhi Finance Corporation(DFC) for women entrepreneurs
• DFC term loans for small and medium scale industries
• DFC soft loans and seed capital for investors who cannot afford to make promoters' contribution
• DFC guidance for new entrepreneurs on identifying projects and filling loan forms
• Delhi State Ind’l. Development Corp. (DSIDC) support investors on project evaluation/market surveys.
• DSIDC assistance in marketing of SSI products
The Delhi Government has set up some incentives in the form of:
1. One Window Information Service to provide quick and valuable Information Service to investors
2. Sanction of Power load from Delhi VIDYUT Board,
3. Issue of provisional registration as a small scale industry.
On Provisional Registration the Industrial Units are avail of the following facilities:-
1. Material for construction of factory building.
2. Apply to the Corporation/local bodies for permission to construct sheds for establishing the unit.
3. Apply for Municipal Corporation Licence & power connection.
4. Apply for financial assistance to Delhi Financial Corporation/Nationalised Banks etc.
5. Procurement of machinery on hire/purchase basis to National Small Industries Corporation/Delhi
State Industries Development Corporation/other institutions.
6. Apply for import of raw materials/components and capital goods.
3. Support Institutions and Organizations
1. Delhi Khadi & Village Industries Board 31 : This statutory Board was reconstituted on 18.2.99 with
Minister of Industry, Govt. of Delhi as its Chairman. The Khadi & Village Industries board implements
two schemes namely KVIC 32 Schemes and Block Loan Scheme under which the Board provides
financial assistance to industries. The Office of the board is situated at Canning Lane, Kasturba Gandhi
Marg, New Delhi. The board provides financial assistance to the entrepreneurs, artisans and cooperative
societies to start units to manufacture khadi & village industries products.
30 www.delhipolicygroup.org
31 http://www.delhikhadi.com
32 Khadi and Village Industries Commission
53

2. Delhi State Industrial Development Corporation (DSIDC) 33 : Delhi Govt. has set up Delhi State
Industrial Development Corporation in order to assist, finance and promote the interest of small scale
industries in Delhi. The Corporation developed Narela Industrial Complex and allotted plots to more
than 1500 entrepreneurs. It also constructed 24 multi-purpose community centres under the Mini Master
plan for development in rural Delhi. In order to provide self-employment opportunities to the underprivileged
sections of the society, the Corporation allotted 2571 work spaces in 22 new work centres
transferred to DSIDC from DDA. 34
3. Delhi Financial Corporation (DFC) 35 : caters to long term credit needs of the small and medium scale
industries of Delhi and Chandigarh. Assistance can be availed for projects having fixed assets such as
land, building, plant and machinery for working capital. The maximum limit for loan in case of
companies is Rs.240 Lakh while for others it is Rs.90 Lakh. The corporation has also devised suitable
schemes to promote the target groups such as women, Scheduled Castes and Scheduled Tribes,
physically handicapped and ex-servicemen. The Corporation is providing a whole range of financial
assistance like term loan, lease assistance and working capital finance.
4. Hi-Tech Vocational Training Centre, Okhla: has been set up by Govt. of Delhi in collaboration with
Govt. of Italy. The basic objectives of the Centre are:
• Training/consultancy in the Hi-Tech areas.
• Production/Job work on highly sophisticated CNC 36 machines.
• Tool Room Training Centre. A Tool Room & Training Centre set up at Wazirpur Industrial Area
with Danish Collaboration.
5. National Institute of Designs (NID), Delhi: provide a multi-disciplinary approach to design, to satisfy
the complex problems of India's changing environment. This year, NID completes 40 years of
distinguished service in design education, design training and design practice. Today, it is internationally
recognised for the quality of its programmes, which will always continue to be the hallmark of this
premier national Institution. It was a change in kind, and not merely in degree.
6. National Productivity Council (NPC), New Delhi 37 : Promotes productivity. Has 14 offices in different
states of India and 250 full time professional consultants. An autonomous, tri-partite, non-profit
organization with equal representation from government, employers & workers’ organizations.
7. The Science and Engineering Research Council (SERC): established in 1974 and is an apex body
through which the Department of Science and Technology (DST), Govt. of India promotes R&D
programmes in newly emerging and challenging areas of science & Engineering. SERC is composed of
eminent scientists, technologists drawn from various universities/ national laboratories and Industry.
8. Technology Information, Forecasting and Assessment Council: an autonomous organisation. Is a
national initiative under the aegis of the Department of Science and Technology, Government of India.
9. The Council for Science and Industrial Research (CSIR) is a national R&D organisation providing
scientific industrial- research for India's economic growth and human welfare. The CSIR system has a
countrywide network of 40 laboratories, 80 field stations manned by nearly 22,000 dedicated people.
Industrial States
Delhi has 28 industrial estate areas where about 25,000 industrial units are located. Government
has acquired 1,300 acres of land of which possession of 1065 acres at Bawana village and Holambi
Kalan has been taken for developing new industrial estates In addition, 800 acres of land has also
been acquired and its possession has been taken for development of new industrial areas, i.e.:-
1. KIRTINAGAR Industrial Area
2. MANGOLPURI Industrial Area
3. NARAINA Industrial Area
4. OKHALA Industrial Area
4. Governance
• Programmes
1. Hi-Tech City for Information Technology: It is proposed to build Delhi’s Hi-tech City for Information
Technology for providing state-of-the-art facilities in software driven, Information Technology and
Telecommunication industry. It is proposed to build this city on an area of about 100 Acres of land at
Papankalan (Dwarka Phase II) near Indira Gandhi International Airport. The Hi-tech city will offer both
developed plots and built-up space. Keeping in mind the requirement of global and Indian companies it
is proposed that the Hi-tech City (Habitat) should have the most modern, state-of-the-art infrastructure.
Amongst others, these would include, state-of-the-art hi-tech construction with the latest data
communication and networking facilities including Satellite connectivity, Un-interrupted Power Supply
Scheme, Plots for companies to make their own campus, including Modern Built-up space, Convention
33 http://www.dsidc.com
34 Delhi Development Authority
35 http://www.dfcdelhi.com
36
Computerised Numerical Control (INDIA) Pvt. Ltd.
37 http://www.npcindia.org
54

Facilities Health Club, Recreation, Cyber cafe, Shopping Center, and Medical Center and other services,
nearby residential apartments, close to International Airport, adequate transport facilities to connect
other parts of the city.
2. Export Cell: An export cell has been set up in the Industries Department to provide necessary guidance
and assistance to promote export related activities in Delhi.
3. Export Award: To organize the efforts and achievements of the exporters the department of Industries
is presenting Annual Export Awards in each of these categories of Manufacturing Exporters, Merchant
Exporters and Export Houses.
5. Entrepreneurship
Special Schemes for Women Entrepreneurs:
The Women Entrepreneur Cell (WEC) set up Manufacturing Units for women entrepreneurs. It provides also
assistance to women entrepreneurs in the following two categories:
• Women who have acquired skills in a particular trade by way of inheritance and who were not necessarily
educated or professionally qualified.
• Women who have developed skills in a particular trade by way of education, professional qualification etc.
UDYOG SADAN
The Department of Industries has a planed scheme to build a composite office under the name "UDYOG
SADAN" to provide requisite assistance to the entrepreneurs. The proposal is aimed to accommodate the
offices of concerned authorities connected with Industrial Development under one roof as well as to save
them from high market rents being paid against rented building.
Innovation and Learning
The Foundation for Innovation and Technology Transfer (FITT) was established at the Indian Institute of
Technology Delhi (IIT Delhi). FITT has the following thrust areas: Technology Transfer, Technology
Development Projects, and Facilities & Specialized Equipment.
The Delhi National Innovation Foundation (NIF) has taken up the extraordinary challenge of identifying
creative and innovative individuals in different parts of the country and recognize, respect and reward them.
NIF is committed to provide intellectual property right protection to these innovators and help link innovation
with investment and enterprise.
Growth Centers
In order to promote industrialisation of backward areas, the central Governments announced in June 1988 the
scheme for establishment 70 Growth Centres throughout the country. Each growth centre would be bestowed
with the best of infrastructure facilities to facilitate and promote industrial growth.
Facilities And Financing Pattern For Growth Centres:
• Proximity To Railhead, National Or State Highways, Or Port.
• Water, Electricity, Telecommunication, Education And Health Facilities, Sufficient Land.
Financing Pattern Of Each Growth Centre Is As Follows:
• Central Government : Rs. 10 Crores
• State Governments : Rs. 5 Crores
• Financial Institutions/Banks : Rs. 5 Crores
• Market Borrowing : Rs. 10 Crores
About 65 Growth Centres have been identified. An important criteria for identification of growth centre is that
its sphere of influence should cover an area of about 400 to 800 hectares. About 28 Growth centres are in
various state of completion.
The industrial growth centres are total tax free zone for 10 years. All industrial activity in these zones are free
from income tax and excise for 10 years from the commencement of production. Industries located in the
growth centres would also be given capital investment subsidy at the rate of 15% of their investment in plant
and machinery, subject to a maximum ceiling of Rs 3 million.
Environment issues
Industrial Pollution Control
55

In pursuance of the Supreme Court order of December 1997, 15 Common Effluent Treatment Plants are
established by the CETP 38 societies to cover 28 approve industrial areas. It is the responsibility of the
societies to construct, operate and maintain these plants and control the quality of effluents discharged by the
industries within the prescribed parameters. For this purpose, the Govt. of Delhi has released Rs. 22.5 Crore
and the Central Govt. has released another Rs. 22.5 Crore being 50% of the capital cost of all the 15 CEPT
units. The remaining 50% of the capital cost i.e. Rs. 45 Crore and subsequent annual operational and
maintenance charges are borne by these societies. In case these societies so desire they can obtain a loan up to
30% of capital cost from the IDBI 39 or any other financial institution.
More stringent norms for vehicular emissions have been notified under the Central Motor Vehicles Rules,
which have come into effect from April 1996. Supply of unleaded petrol in Delhi has been introduced with
effect from April 1, 1995 for use in four-wheel vehicles fitted with catalytic converters.
6. Access to Venture Capital
1. Delhi Financial Corporation Venture Fund: helps the enthusiastic and qualified entrepreneurs to transform
their dreams and ideas into reality by providing strategic support and financial planning, in addition to pure
financing. For this purpose the corporation has constituted a fund.
2. PICUP Venture Capital: The Pradeshiya Industrial & Investment Corporation of UP 40 Venture Capital
Assistance. The scheme aims at financing small/medium scale industries based on sound project ideas,
which are based on new technologies. Assistance under the scheme is available for projects promoted by
technical entrepreneurs involving innovative technology, up gradation developed through in-house R&D or
recognised research laboratories and institutions.
3. Delhi Khadi & Village Industries Board: The Delhi Khadi and Village Industries Board provides financial
assistance for setting up village industries unit and marketing outlets to the individuals, industrial cooperative
societies and institutions. Financial assistance up to Rs. 10 Lakh to an individual entrepreneur
and up to Rs.25 Lakh to the institutional cases based on the Project Report for the particular scheme are
provided. Till 2000-01 the board has financed Rs.2.50 Crore.
Private Venture Capital Organisations
1. Baring Private Equity Partners (India) Limited
Name of Fund: Baring India Investment Limited
Nature of Fund: Offshore fund
Date of Establishment: December 1996
Date of Maturity: December 2003+2 years
Authorised Capital: Rs. 1,200 million
2. Risk capital and technology finance corporation ltd.
Name of fund: Venture Capital Unit Scheme-III (VECAUS-III)
Nature of fund: UTI scheme
Date of establishment: July 1991
Authorised capital: Rs. 1200 million
Organisations Providing Venture Capital Advisory Services
1. AVISHA Credit Capital Ltd: AVISHA is an integrated management resource for Long Term Funding Tieups,
Collaborations/Joint Ventures, Management Consultancy Service and Corporate Advisory Service.
AVISHA offers service, which have been carefully tailored - blending hardcore professionalism with a
dedicated clients orientation. The service provided to clients are highly personalised, swiftly effected and
more often are designed to suit specific requirements. The company recognises the clients increasing
requirements of practical and technically sound advice and execution thereof in an utmost professional
manner.
38 Combine Effluent Treatment Plant
39 Industrial Development Bank of India
40 Uttar Pradesh State
56

Please refer to Women’s Study Forum
The Study Results
57

Definitions of Terms: 41
City Region:
Global City Region:
Dynamic City Region:
Region:
City:
Innovation System: 42
Industrial Cluster:43
Governance: 44
Policy instruments/tools:
Entrepreneurship: 45
Supply chains:
A city-region is a geographic area identified by the name of the urban
centre of influence on its growth and development. To qualify for this
designation within the Network the place must be where a regional,
national or international airport with regularly scheduled commercial airpassenger
services is located. Capital cities of regions, territories, states,
provinces and the like may also be designated without regard for whether
their airports bear their names.
A national capital or a large urban area that is generally accepted
worldwide as having international significance and influence.
A dynamic city, one that is engaged in import replacement, unleashes five
forces - markets, jobs, transplants from other places, technology, capital.
The relationship between a city and its region obviously changes over
time.
State or Union Territory.
City referred to as the Dynamic City Region.
The word 'innovation' seems to have numerous meanings and is
interpreted in various ways. In this document the following definition of
the OECD is used:
“Technological innovation is the transformation of an idea into a new or
improved saleable product or operational process in industry or
commerce.” [OECD, 1981]
A geographically bounded concentration of similar related or
complementary businesses, (i.e. groups of related industries located in one
or more regions of the state), with active channels for business
transactions, communications and dialogue, that share specialized
infrastructure, labour markets and services, and that are faced with
common opportunities and threats.”
Governance can be seen as the exercise of economic, political and
administrative authority to manage a country’s affairs at all levels. It
comprises the mechanisms, processes and institutions, through which
citizens and groups articulate their interests, exercise their legal rights,
meet their obligations and mediate their differences.
Variables that are used as policy tools in the presentations. The main
policy tools available are: Income tax, VAT, Government expenditure,
Interest rate.
Is the process of identifying, developing, and bringing a vision to life. The
vision may be an innovative idea, an opportunity, or simply a better way
to do something. The end result of this process is the creation of a new
venture, formed under conditions of risk and considerable uncertainty.
The relation between organizations, resources and activities involved in
the creation and delivery of value in the form of both finished products
and services to end customers and shareholders.
http://www.manufacturing.net (UNIDO intervention)
41 The used definitions of terms included in this document
42 Innovation = theoretical conception + technical invention + commercial exploitation [Trott, P., Innovation Management
and New Product Development, Financial Times Management, 1998]
43
Rosenfeld, S (1995) Overachievers: Business Clusters that Work, Regional Technology Strategies Inc.
44 As defined by UNDP: Governance for Sustainable Human Development: A UNDP Policy document, Jan. 1997.
45 As defined by the Entrepreneurship Center at Miami University of Ohio
58

Venture Capital:
Micro (Tiny) Industry:
Small Scale Industry:
Medium & Large Scale Industry:
Financing-at-risk directed towards an investment, usually without
security. http://www.findmehere.com
Tiny Scale industry is one in which the investment in plant and machinery
is less than Rs.25 Lakh irrespective of the location of the unit
An industrial undertaking in which the investment in fixed assets in plant
and machinery whether held on ownership terms or on lease or by hire
purchase does not exceed Rs.100 Lakh.
An industrial unit, which is not classified as Tiny/Small Scale/Ancillary
Industry, shall be classified as Medium/ Large Scale Industry.
100% Export Oriented: A 100% Export Oriented Units is one, which undertakes to export
[Export Oriented Units]
its entire production of unit’s goods subject to relaxation as
permitted by Govt. of India from time to time and as defined by it. Such
units may be set up either under the Export Oriented Units or under
EPIP [Export Promotion Industrial Park] Scheme or under the EHTP
[Electronic Hardware Technology Park] Scheme or Software
Technology Park Scheme or Special Economic Zone.
Mega project means:
Fixed Asset:
Projects with an investment of Rs.100 Cr. and above.
Fixed assets shall mean the total investment made on land, building and
plant and machinery and such other productive assets like tools, jigs, and
fixtures, dies, utilities like boilers, compressors, diesel generating sets,
cranes, material handling equipments and such other equipments directly
related to production purposes.
59

Annex I
Top Ten Software Exporters for the Year 2000-01
1. Infosys Technologies Ltd.
2. Wipro Ltd.
3. Tata Consultancy Services Ltd.
4. Digital Equipment India Ltd.
5. I-Flex Solutions Ltd.
6. Mphasis BFL Ltd.
7. Lucent Technologies Ltd.
8. Hewlett Packard India Ltd.
9. IBM Global Services India Pvt. Ltd.
10. Philips Software Centre Pvt. Ltd.
Top Ten Software Exporters for the Year 2001-02
1. Infosys Technologies Ltd.
2. Wipro Ltd.
3. IBM Global Services India Pvt. Ltd.
4. Tata Consultancy Services Ltd.
5. Digital Global Soft. Ltd.
6. I-Flex Solutions Ltd.
7. Mphasis BFL Ltd.
8. Cisco Systems (India) Pvt. Ltd.
9. Texas Instruments (India) Pvt. Ltd.
10. Lucent Technologies India Ltd.
Top Ten Software Exporters for the Year 2002-03
1. Infosys Technologies Ltd.
2. Wipro Ltd.
3. IBM Global Services India Pvt. Ltd.
4. Tata Consultancy Services Ltd.
5. Digital Global Soft. Ltd.
6. I-Flex Solutions Ltd.
7. Texas Instruments.
8. Cisco Systems (India) Pvt. Ltd.
9. Mphasis BFL Ltd.
10. Philips Software Centre.
60

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