Chapter 2 - Noida Authority Online

Chapter - 2ECONOMIC AND INVESTMENT SCENARIO INDIA UPGENERAL INDIAN ECONOMYIndia is the fourth largest economy in the world, and has the second largest GDPamong developing countries, based on purchasing power parity. Until theeconomic reforms in 1991, the Indian economy was characterized by highlyregulated business environment with high tariffs. Later due to economic reformsthat were highly supported by successive governments have ensured India'sposition in the global map as the favoured investment destination with open andliberal police. External trade has been liberalized, tariffs steadily lowered, importcontrols progressively reduced and tax rates have been rationalized and are atpresent are lowest ion the world.There exits today, a strong political consensus on the current economic policies notonly at the centre level but amongst all the states that ensured continuation andstrengthening of investor friendly policies. The brief economic profile of India isgiven in the following Table.Economic Profile of India 2000 - 2001ParameterValueGDPUS $ 480 bnGDP Growth Rate 5.2%Per Capita Income US $ 486ExportsUS $ 43 bnImportsUS $ 48 bnFDIUS $ 3.9 bnInflation 4%Interest Rate 12%+INVESTMENT SECRETIVENESS OF INDIAIf size of the market and growth potential are two important factors in attractinginvestments in an economy, then India potential is widely acknowledged. It is awell known fact that India has been one of the fastest growing economies over thepast decade, averaging around 6 per cent GDP growth second only to China. As perGlobal Competitiveness Report 2000, India has improved its position from 52 to 49

ONGOING CORE COLLECTION ACTIVITY……………………………………………………………………………………………………………………………….……………………………..Wide variety of datasets ingested across a broad rangeof topics:• Economic: tax, income, property• Health: cancer, diet, smoking and drinking,• Environmental: energy, Sudden Oak death, waterresources,• Social: Identity, relationships, familiesOur ‘Bread and butter’• Major UK survey series and census data• ESRC/MRC longitudinal survey series• International macro time series…………………………………………………………………………………………………………………………………………………………..…UK DATA ARCHIVE

? With a fast emerging middle class of nearly 15 million people, it is one ofthe largest untapped markets available to industry.? Availability of Large, inexpensive and disciplined labour force available? UP has more than 0.69 million industrial units in operation out of which2616 are large and medium sized units providing employment to around 2.9million people.? UP is the home to not only the traditional industries like Brass ware Carpets,Perfumes, Silk, Hand looms, and Handicraft but also the modern industrieslike electronics, software and automobiles. etc.Though, basically an agrarian economy (agriculture accounting for 54 % of theState Domestic Product, state has made strides in the Industrial SectorOpportunities in the agricultural sector are fast shrinking and Industry provides thedesired channels for overall economic growth, much needed revenues fordevelopmental programmes and employment generation.UP state is now emerging as major destination for investors both Indian and foreign.It has attracted the 3 highest number of industrial Entrepreneur memorandums andthe 5 highest letter of intents. The state has 379 numbers of projects worth Rs.649.80 billion (Approx. US$13 Bn) under various stages of implementation. Theseprojects account for 4% of the fatal country's proposed investment in variousprojects.The table below summarised the distribution of investment proposed announced andunder implementation) in UP and their relative share in India.

Distribution of Investment - Industry wise as on July 2002Sectors All India Uttar Pradesh Percentageshare of UPRs. Bn No.s Rs. Bn Nos.Food & Beverages 83.52 418 6.34 39 1.0Food Products 70.40 318 5.36 33 0.8Fertilizers 141.33 32 6.41 2 1.0Organic Chemicals 568.76 61 10.00 2 1.5Petroleum Products 789.62 37 107.24 3 16.5Electrical Machinery 39.98 63 6.77 4 1.0Electronics 171.43 361 31.71 28 4.9Automobile 108.19 38 11.00 3 1.7Electricity generation 512.69 636 179.69 20 27.7Electricity distribution 161.91 230 10.88 7 1.7Hotels & Tourism 151.19 206 37.04 6 5.7Road Transport 986.22 1,031 82.99 94 12.8Railway Transport 689.87 273 22.00 26 3.4Misc. Services 1861.56 968 25.28 47 3.9Commercial complexes 857.85 675 21.71 37 3.3All industries 15650.76 6,684 649.80 379 4.2Source : CMIE, August 2002UP is currently accounting for around 4.2% of the country's investment. Out of Rs.649.80 Bn of investment in UP, 31% of the projects are in announcement stage,25% in proposal stage and 44% of them are under implementation stage. Theprojects under implementation relate to electrical appliances, Compact Discs, TVreceivers, Leather products, Consumer electronics, Software development, Autoancillaries and depressed food segments besides several infrastructure projectsincluding roads, industrial parks, integrated townships etc. In UP the major share ofthe investment is accounted by Noida/Greater Noida and Ghaziabad region. Thisbelt together is accounting for around 25% share of the total investment in UP. Themajor units coming up in this region relate to Electronics software development,footwear, printing services, appears, ago and food processing industry and otherinfrastructure projects like hotels, commercial complexes, industrial parks, R&Dand roads projects etc. Recently Reliance Group of Industries has laid foundationstone for setting up a power project worth Rs. 10,000 Cr. in Dadri, distt. Ghaziabad.

RECENT GOVERNMENT INITIATIVES TO BOOST FDI AND EXPORTSRecent years have witnessed, number of stamps taken by government to boost FDIand exports as mentioned earlier. The SEZ Policy is the latest and most ambitiousof export boosting efforts, but it goes much further, in that it seeks to radicallychange the environment for exports and FDI, by offering a hassle free businessfriendly environment and world class infrastructure over an unprecedented largegeographical area. It allows government to experiment with radical economicreform on a localized basis, introducing reforms that are difficult to implement atthe national level, given the country's large size and social disparities. The mostnotable feature of this policy is working along with state government andencouraging them to take the lead role in export promotion. UP is the first state inthe country to formulate and implement SEZ Act (Annexure VII) The stateGovernment policy on SEZ and various notifications are given as Anneure VI &VIII respectively.