Gujarat: An Overview

Gujarat is one of India's most industrialised states in India, with an enviable track record of attracting
investments over the last decade to become the most favoured investment destination of Indian
Republic.

GUJARAT FACT FILE

Area: 196,024 sq km

Population: 50,671,017

Capital: Gandhinagar

Literacy Rate: 79.8 per cent

Religion: Hinduism, Islam, Jainism, Sikhism, Zoroastrianism

Languages: Gujarati, English, Hindi and other Indian languages

Temperatures:

Summer: min 25 degrees to 45 degrees

Winter: min 15 degrees to max 35 degrees

Source: Government of Gujarat

Major Highlights of the State

A model for industrial growth in a developing economy

Investment friendly ambience coupled with its vibrant lifestyle makes it a prime
industrialists destination

In the Vibrant Gujarat Global Investment Summit 2011, about 7,936 memorandums of
understanding (MoUs) worth US$ 450 billion were signed

Industrial development due to increase in investment regions, special economic zones

(SEZs), product clusters, industrial parks, and industrial estates

Industrial sector of the state contributes nearly 27 per cent to the Government of Indias
exchequer

Gujarat's Gross State Domestic Product (GSDP) and per capita income grew by around 16
per cent in 2009-10. The GSDP grew to US$ 95.4 billion (current prices) in 2009-10, as
compared to US$ 81.7 billion in 2008-09

The states annual Plan outlay for year 2011-12 has been fixed at US$ 8.4 billion

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Key Industries
One of India's most industrialised states, Gujarat has a variety of industries including engineering
and auto manufacturing, food and agri-business, textiles, gems and jewellery, mineral and mining
and ports and shipbuilding. Some of the other important industries in the state include chemicals
and petrochemicals, pharmaceuticals and tourism, with nearly 30 per cent of Indias petrochemicals
business being conducted in Gujarat, while those of chemicals and pharmaceuticals account for
almost 50 per cent. Gujarats share in manufacturing of soda ash, salt and caustic soda is around 90
per cent, 70 per cent and 20 per cent, respectively.

Some of the Identified industrial projects in Gujarat are:

Agro Based & Food Processing Industry

Chemical & Petrochemicals

Information Technology

Mineral-Based and Allied Industries

Plastic and Allied Industries

Port-Related Activities & Infrastructure

Textile & Apparels Industry

Gems and Jewellery

Infrastructure Status
Land availability

Gujarat Industrial Development Corporation (GIDC) focuses on acquiring and development of land
for industrial purposes. GIDC has acquired 22,954 hectares of land for different purposes. So far,

14,272 hectares have been developed

More than 10,260 hectares of land have been allotted

Nearly 12,300 sheds constructed, and

12,100 sheds have been allotted

Physical infrastructure

Gujarat has a robust, efficient and cost affective Infrastructure, which helps to augment the
industrial and urban growth in the state.

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The state has a host of government agencies, such as the Gujarat Infrastructure Development Board,
looking after the development of infrastructure facilities such as roads, ports, railways, power,
information infrastructure, urban infrastructure and water supply.

Gujarat has 40 minor and intermediate ports geographically dispersed across South Gujarat
(13 ports), Saurashtra (23) and Kutchch (4) regions

There are 23 power plants, which includes nine thermal power plants, nine gas power
plants, four hydro power plants and one atomic power plants

The total road length in Gujarat currently stands at about 745,00 km

GIDC plays a pioneering role in provision of industrial infrastructure to the prospective

industries. Currently, it has 248 sanctioned estates, out of which 182 are currently functional

Social Infrastructure

Gujarat has been dependent on primary sector over the years for a major portion of employment.
The primary sector employs around 56.5 per cent of the population, with the secondary and tertiary
sectors employing 19.2 per cent and 24.3 per cent, respectively. With regards to labour force
participation rate, Gujarat has a very high participation rate for men, around 92 per cent, which rank
among the best in the world.

Further, the state ranks ninth on the Education Development Index (EDI). Gujarat had an estimated
8.2 million children enrolled in the primary classes with the Gross Enrolment Ration (GER) touching
almost 100 per cent. There were about 2.77 million children enrolled in institutions imparting
secondary and higher secondary education.

Gujarat also offers holistic healthcare and medical services, with the share of primary care in the
total healthcare market of the state accounting around 75-80 per cent.

Key PPP Projects

The state is committed to developing physical and social infrastructure in both urban and rural areas
and mostly uses PPP as the preferred mode to implement various projects.

Please click on the following link for the PPP projects in the pipeline in the state.

Industrial clusters

The state is considered to be one of the leading industrial states in India, with the manufacturing
sector constantly growing and the small and medium enterprise (SME) sector playing a significant
role in shaping the sector. The Industrial Policy of Gujarat emphasise on creating more opportunities
in Industrial, Commercial and Service Sectors to accelerate the flow of Industrial Investment and
developing industrial clusters, industrial estates and industrial areas.

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Special Economic Zones (SEZs)

Gujarat has the distinction of being the rst state to enact the Special Economic Zone (SEZ) Act,
2004. It has around 17 SEZs in electronics, IT/ ITES sectors, 10 in engineering and four each in
pharmaceuticals and textiles & apparels.

Special facilities for NRIs/PIOs

The state has a number of state agencies and organisations providing value-added services to the
non-resident Indians. Some of these agencies include:

Gujarat State Non-Resident Gujaratis' Foundation (NRGF)

Gujarat Informatics Centre for Land (GICL)

Non Resident Indian Parents Association (NRIPA)

State Policies & Incentives of the State

Tax incentives & exemptions for NRIs

The government of Gujarat provides various tax exemptions and incentives. The government had
earlier announced a scheme of sales tax incentives that offered to new units in the district of Kutch.
Under this scheme, new units set up between 31/7/2001 and 31/10/2004 were offered sales tax
incentives in the form of either sales tax exemption or deferment.

The Gujarat Special Economic Zone ACT, 2004, allows various fiscal benefits. Some of them include:

All sales and transactions within the processing area of the Zone shall be exempt from all
taxes, duties, fees or any other levies under any State law to the extent specified below :

o Stamp duty and registration fees payable on transfer of land meant for approved
Units in the Zone. Levy of Stamp duty and registration fees on loan agreements,
credit deeds and mortgages executed by the Unit, industry or establishment set up
in the processing area of the Zone.

o Sales Tax, Purchase Tax, Motor Spirit Tax, Luxury Tax, Entertainment Tax and other
taxes and cess payable on sales and transactions.

o Inputs (goods and services) made to Zone Units from Domestic Tariff Area shall be
exempted from sales tax and other taxes under the State laws.

Investment subsidies for NRIs

Interest subsidy or Investment subsidy to small scale industrial units scheme, 2000

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With the aim of providing investment opportunities the government of Gujarat provides interest
subsidy or investment subsidy to Small Scale Industries. A small scale industrial unit entitled for
interest subsidy under the scheme needs to get the loan sanctioned loan from the financial
institution and then apply to District Industries Center, along with a copy of the letter of sanction of
loan, in order to register itself for interest subsidy. Under this scheme, the small scale industrial unit,
after registering as a small scale industry, has to apply to District Industries Center in a prescribed
application form to get itself registered for cash subsidy.

This scheme was started on 15/11/2000 and is valid till 25/10/2011.

Incentives for FDIs

Gujarat is the leading industrialized state of India and the government has taken various steps to
attract investors into the state. Gujarat ranks 6th in terms of Foreign Direct Investment as compared
to other states in India.

Availability of Finance

Gujarat State Financial Corporation (GSFC) finances industrial units in Gujarat, provides financial help
to the new and already existing Small Scale Industries (SSI). It also provides finance to SSI for
obtaining ISO-9000 certification, as well as marketing and sales promotion activities.

Business Opportunity
Single window

The State Government is committed to provide the facility of single window clearance and had
constituted a high powered Gujarat Industrial Promotion Board (GIPB) to promote faster
industrialisation in the State under the Chairmanship of the chief minister of the state.

Special agencies to facilitate industrialisation

Over the years Gujarat have acquired excellent capacity to structure and implement various PPP
projects. In fact, it is the first state in the country to enact a legal framework for PPP in infrastructure
sector the Gujarat Infrastructure Development Board (GIDB).

Investment Opportunities
With tremendous business resources aided by a sustainable growth mechanism, investment
opportunities in Gujarat are most preferred.

Gujarat is considered as a preferred investment destination due to the following reasons:

Strategic location

Fastest growing economy

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 Business friendly policies

Robust physical, social and industrial infrastructure

Quality manpower

Abundant natural resources

High quality of life, low cost of living

Key Policy Updates

With the primary objective of creating Gujarat the most amiable and profitable state for investments
in India, the state government has announced an Industrial Policy in 2009. The highlights of this
policy are:

Facilitation of investments in Gujarat

Generation of employment and increasing employability of work force; and
Maintenance of high standards of quality

Gujarat Government has also undertaken various sector-specific and general policies for the overall
development of the state. Some of these policies include:

Mineral Policy 2003

Industrial Policy 2003

IT Policy 2006 - 2011

BT Policy 2007 - 2012

Disaster Management Policy

Growth Policy

Power Policy

Tourism Policy

Road Policy

Port Policy

Further, visit the Commercial Tax Department and Legal Department to find out more information
related to taxation and legal frameworks in the state.

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