Investment Climate in Punjab

6Ludhiana, Jalandhar, Amritsar, Mandi Gobindgarh and Mohaliconstitute the main industrial centres in Punjab. Ludhiana has thelargest number of large and medium units and is a major exporterof textiles, light engineering products including machines tools,hand tools and sewing machines, bicycles and bicycle parts andauto components. Jalandhar is known for leather goods, sportsgoods and sewing machines and Amritsar for food processingand textiles industries. Mandi Gobindgarh, is the “Steel Town ofPunjab”, a cluster of 275 operational rolling and re-rolling millsrelated to the iron and steel industry. Mohali is host to IT/ITeSsector and electronics manufacturing.With the abundant resource endowments in the state, thepotential industries include tractors and auto components, agrobasedindustries, bicycle manufacturing, chemical products, foodproducts, pharmaceuticals, textiles, paper products and lightengineering goods.Punjab has a rich and productive agricultural base combinedwith a conducive Agro Industrial Policy, 2009 making it an idealdestination for setting up agro & food processing industries.The state has the highest cropping intensity in the country 9 andcontributes 45.4 percent of wheat and 25.3 percent of rice toCentral Pool 10 . Punjab is a leading producer of milk with diaryproduction of 25,600 tonnes. The state accounts for 10 percent offertiliser consumption and one third of all the tractors operationalin the country.The Punjab Agro Industries Corporation has been encouragingprivate sector investments in agro‐processing units. The AgroIndustrial Policy, 2009, provides special incentives to the agroindustry investors based on the size and projects with minimumfixed capital investment of Rs 250 million under mega projectscheme. In addition, Punjab Agri Export Corporation providesa subsidy of 25-30 percent on waxing/grading, packing andfreight for distant marketing and export of fresh and processedvegetables. The total storage facility of foodgrains in the state is22.6 million tonnes in 2010-11.The state has set up a Permanent Perishable Cargo Centreat Amritsar international airport to boost farm exports andagricultural machinery service centres to provide agriculturaltools on custom hiring bases. The total budget outlay by Punjabgovernment for the year 2011-12 for agriculture and alliedsectors was Rs 4.53 billion, out of which Rs 3 billion was for crophusbandry and Rs. 450 million for animal husbandry 11 .IT/ITeS sector is another key potential sector in the state withMohali as the hub of electronics and IT industry. The stategovernment has also identified suitable land parcels at Railmajraand Kapurthala for the development of world class IT/ITESinfrastructure. The software exports doubled to Rs 14 billion in2010-11 from Rs 7 billion in 2009-10. 12Punjab is one of the leading producers of cotton, blended yarnand mill-made fabrics in the country.Light engineering goods industry, consisting of bicycle andbicycle parts, hand tools, sewing machines and machine tools isan important sector of the state. A significant share of bicyclesand bicycle parts produced in the country come from Punjab.Total exports from Punjab during the year 2010-11 were valuedat approximately Rs 174.3 billion displaying a 9.1 percent increaseover exports in the year 2009-10 13 .Figure 14 : Export trendsSource: Statistical Abstract Punjab 2010; Government of PunjabHosiery and readymade garments constitute about 31 percentof the total exports from Punjab followed by yarn and textilecontributing 23 percent. The districts of Ludhiana, Gurdaspur andJalandhar accounts for around 95 percent of the total exportsfrom Punjab.Figure 15 : Sector wise distribution of goods exported from Punjab (2009-10)Source: Government of PunjabThe key sectors in the state include textiles, light engineeringgoods, automotive, IT and electronics and agro-based industries.Land AvailabilityIndustrial LandThe state government proposes a cluster approach to boostindustrialisation. Some of the proposed industrial areas/themeparks include 14 :1. Mohali-Chandigarh is a hub for IT/ITeS, electronics andpharmaceuticals industry. The proposed plans include:• Information and Knowledge City at Mohali over an area of1,500 acres9http://www.pbindustries.gov.in/strengths.htm10Economic Survey of Punjab 2011-1211Economic Survey of Punjab 2010-1112Economic Survey 2011-12, Government of Punjab13Government of Punjab14Economic Survey of Punjab 2011-12; KPMG Research