INDIAN STATE : MADHYA PRADESH

General Information

Madhya Pradesh is a state blessed with vast natural resources, rich cultural heritage, an excellent industrial base coupled with a progressive, investor friendly government. The State of Madhya Pradesh was formed on November 1, 1956.

Located in Central India, Madhya Pradesh has a unique advantage, bordered by the states of Uttar Pradesh, Rajasthan, Maharashtra, Gujarat and Chhattisgarh.

Fact File

Geographical Area	3.08 (lakh sq. km)
Capital	Bhopal
Population (2001 Census)	In lakhs 603.48
Gross state Domestic Product at Current Prices (2004-05) (As on Feb 2006)	107926(Rs crores) US$ 23.3911 bn
Gross state Domestic Product at Constant Prices (1993-94) for the Year (2004-05) (As on Feb 2006)	60891(Rs. Crores) US$ 13.1975 bn
Net State Domestic Product at Current Prices (2004-05)(As on Feb 2006)	95052 (Rs Crores) US$ 20.6081 bn
Net State Domestic Product at Constant Prices (1993-94) for the year (2004-05) (As on Feb 2006)	53282 (Rs Crores) US$ 11.5520 Bn
Per capita NSDP (state Income) at Current Prices(As on Feb 2006)	Rs 14626 US$ 317.124
Percentage of State Population to All India Population	5.87
Literacy Percentage Male Literacy Female Literacy	63.74% 76.06% 50.29%
Principal Language	Hindi, English

Source: Central Statistical Organization

Advantage Madhya Pradesh

• Strategic Geographic Location
  
• Excellent interstate connectivity (National and State Highway, Train and Air Links)
  
• Rich and Fertile land and Natural resources
  
• Rich Mineral Wealth (copper ore, magnesium ore, limestone, diamonds, coal and coal-bed methane.)
  
• Availability of Land at a reasonable cost
  
• Cheap Labour
  
• Unexploited species of rare, valuable medicinal - herbal plants.
  
• Industrially peaceful and stable with a vibrant industrial base.
  
• Peaceful political scenario (Law and Order)
  
• Rich cultural heritage
  
• Major auto manufacturing base. Largest producer of radial tyres in India.
  
• Largest soya processing hub in India.
  
• Hub for FMCG, consumer electronics, pharmaceuticals, herbal products, textiles and apparel.
  
• Growing gems and jewellery center.
  
• Largest producer of oil seeds and pulses in the country. Largest exporter of DOC (De-Oiled Cake) in India. 25% of pulses and 40% of grams grown.
  
• Largest producer of garlic and coriander.
  
• Grower of commercially favored varieties of wheat and potatoes. Largest producer of garlic and coriander.

Economic Infrastructure

Power

Madhya Pradesh has the capability of generating 15000 MW of power in next 5-10 years. It is expected to be Power Surplus state by the year 2008-09.The potential areas is thermal, gas and alternative energy sources.

Roads

National Highways: 5070 kms
State Highways: 9885 kms
Major District Roads: 11114 Km
Village Roads : 44233 Km
Total : 68105 Km

Railways

Trunk Rail route connecting northern India passes through Madhya Pradesh. Main junctions in the state are Bhopal, Bina, Gwalior, Indore, Itarsi, Jabalpur, Katni, Ratlam, Ujjain & Khandwa.

Aviation

Major airports linking Delhi, Bombay, Varanasi & Nagpur are Bhopal, Indore, Khajuraho & Gwalior. Stations linked by Vayudoot are Bhopal, Khajuraho, Satna, Rewa, Guna, Indore & Jabalpur. Bhopal is also connected to Jaipur, Raipur & Nagpur by Vayudoot.

The government has geared up to upgrade the airports at Bhopal and Indore, both for cargo as well as passengers to international standards.

Water Resources

Water is a critical resource for supporting life and sustaining overall development. Fortunately, water is available in the state of Madhya Pradesh in plenty. The average surface water availability is 81.50 lakh hectare-metre contributed by ten major river basins -Chambal, Betwa, Sindh, and Ken basins in the north, Sone and Tons river basins in the east, Benganga basin in south and Narmada, Mahi and Tapti basins in centre and west. In addition, 35-50 lakh hectare metre ground water is available.

Social Infrastructure

Education

Madhya Pradesh is known for high quality educational institutions ranging from schools to higher centres of learning and research. The government has taken several initiatives for extending the elementary education and training for teachers. The state strives to become a fully literate state by 2010. Further, the state aims to become an educated state and not merely a literate state by developing a "learning society as opposed to a schooling society". To meet this end, the state is laying special stress on vocational and technical training. Under the Sarva Shiksha Abhiyan, an annual plan for Rs. 1800 crore is envisaged.

Major Industries

The industrial sector contributes 8 per cent to employment of the state workforce and 25 per cent to state GDP. The rate of annual industrial growth in the recent past has varied from 4 per cent to 6 per cent. Indutry in Madhya Pradesh is largely resource driven leveraging the state's natural wealth in the form of limestone, coal, soya, cotton, bauxite, iron-ore, silica etc. Therefore, the state has a strong industrial base in sectors like textile, cement, steel, soya processing and optical fibre.

Agriculture and Agro Processing

Madhya Pradesh is the fourth largest producer of agri produce in India with lowest consumption of fertilizer per hectare. Agriculture contributes almost one-third of the Gross State Domestic Product (GSDP) and is the main source of employment for over 70 per cent population and constitutes about 60 to 75 per cent rural income. The performance of the agriculture sector in the state has been impressive. From a growth rate of mere 1.5 to 2 per cent in the 1980s, the state has made rapid strides growing at the rate of 4 to 5 per cent, faster than the country's average of 3.1 per cent.

Major Crops grown in the State are Paddy, Wheat, Maize and Jowar among Cereals, Gram, Tur, Urad and Moong among Pulses, while Soybean, Groundnut and Mustard among Oilseeds. Also commercial Crops like Cotton and Sugarcane are also grown in considerable area in few Districts. Horticulture Crops Potato, Onion, Garlic, along with fruits like Papaya, Banana, Oranges, Mango and Grapes are also grown in the State. Some area has also been brought under medicinal and narcotic crops.

Notable contribution of state in National Agriculture Production

Crops/Crop groups	% Contribution	Position in country
Soybean	59.0	First
Gram	38.5	First
Total oilseeds	21.0	First
Total pulses	20.0	First
Linseed	20.8	First
Maize	13.4	First
Lentil	20.7	Second
Niger	16.6	Second

Production of cereals went up by 43 per cent, of pulses by 54 per cent and of cotton by 10 per cent and oilseed production grew by 143 per cent.

The investment opportunities in this sector include

• Wheat processing
  
• Potato processing
  
• Spices
  
• Edible oil

The state government promotes investment in the agriculture sector and attractive incentives are being provided to the private partners.

Land use classification

Unit - Lakh ha.
S. No.		Area	%
1	Geographical area	307.50
2	Forest	86.13	28.00
3	Land not available for cultivation	32.00	10.41
4	Other uncultivated land excluding fallow land	16.73	5.44
5	Cultivable waste land	11.70	3.80
6	Fallow land (current + old)	10.24	3.35
7	Net area sown	150.70	49.00

New Interventions in Agriculture and Agro-processing

• Agro-climatic zone wise planning
• Increasing the production in 5 years by implementing following programmes:
  • Convergence demonstration for doubling farm incomes in irrigated and rain fed areas, in each district.
    
  • Bringing additional culturable fallow and ravine land under cultivation & horticulture.
    
  • Intensive tank-bed cultivation in Rabi.
    
  • Promotion of agro processing industries.
• Increasing the production
  • Soil water management through institutional credit.
    
  • Enhancing seed replacement rate.
    
  • Balanced application of chemical & organic nutrients based in soil tests
    
  • Revamping cooperative credit and restoring the health of cooperative institution.
    
  • Introducing agriculture including horticulture and animal husbandry as a compulsory subject in middle schools.
    
  • Promotion of organic farming.
    
  • Enhancing per ha. use of fertiliser.
    
  • Judicious use of available water.
    
  • Intercropping of Horticulture crops.
    
  • New nurseries in private sector.
    
  • Medicinal crops & floriculture in each district.
    
  • Massive seed production programme involving the Seed Grower Co-operative Societies.
    
  • 20% increase in distribution of machinery & implements
    
  • Leasing out of large chunks of ravine land for horticulture use.
• Promotion to cultivation of Durum wheat.
  
• Increasing production of quality plants of horticulture especially through Private Nurseries.
  
• Increasing milk production through breed improvement & induction of high yielding milk cattle.
  
• Better enforcement of Insecticide Act, Seed Act & Fertiliser Control Order to ensure quality of inputs.
  
• Integrated approach for doubling food production and farm income by contact village concept -
  
  • Out of 52,000 villages in state 15,000 villages are identified as contact village in 2004 -05.
    
  • 2 villages will be adopted by each village extension worker(VLW).
    
  • Capacity building of key communicators in the village (Kisan Bandhu & Kisan Saheli)
    
  • Involvement of 'Kisan Bandhu' & 'Kisan Saheli' in extention activity as well as in establishing agri clinic & agribusiness centres.
    
  • Extension training through SatCom.
• Agri.- Export Zone: Three Agri Export Zones have been sanctioned:
  1. Potato/Onion/ Garlic
  2. Seed spices
  3. Wheat
• Agro processing industries
  • M.P. Agro. nominated as nodal agency
    
  • Agro processing is earmarked as thrust sector in new industrial policy.
    
  • Possibility of more than 1000 Agro industries in the state, promoting entrepreneurs.

Herbal Business

Madhya Pradesh is known for a wide range of herbs. It caters to about 40 percent of Indian herbal industry's requirement across spread across the country. The main herbal centres are Shivpuri, Betul, Katni, Neemuch and Lalitpur. The natural occurrence of most of the herbs blended with mass scale cultivation of many has made the state the herbal hub of the country. Madhya Pradesh is the raw material bowl of the herbal industry and is all set to become the main processing centre for several herbal products. The following factors make the state conducive for investments in the herbal industry:

• Of the 16 agro-climatic zones of the country, 11 fall in Madhya Pradesh. As a result, it is a natural habitat for over 50 per cent of the herbs used in pharmaceutical industry.
  
• Abundant availability of raw herbs
  
• Abundant availability of land for cultivation of various herbs
  
• Large-scale cultivation of a number of species has already been started, which can further be increased to a large scale, as there is plenty of fertile land available.
  
• Cheap land available for industrial operations
  
• The state is well connected by rail, road and air.
  
• Single window clearance system for drug license
  
• Preference allotment of land in industrial areas

Investment opportunities exist in this sector in the following industries:

• Aloe vare gel extraction and spray dried powder manufacturing units.
  
• Units to produce extracts of various herbs.
  
• Fractional distillation units for value addition in essential oils.
  
• Various ayurvedic drug formulation units.
  
• Promotion of food and vegetable colour dyes.
  
• Production of concentrates from flowers.
  
• Primary processing of raw herbs.
  
• Isabgol dehusking units.
  
• Herbal cosmetics
  
• Units to make perfumery compounds
  
• Production of bio-diesel.

Cement

The state is the third largest producer of Cement in the country catering to 13% of the National demand. Currently present several major groups are expanding their production capacities. Considering the present scenario and the availability of raw material, there is a scope of further investment of $2.5 billion in this sector.

Madhya Pradesh's key strength in cement industry is the presence of large limestone reserves, estimated to be over 2 billion tonnes.

Prominent cement companies present in the state include ACC, Grasim Industries, Jaiprakash Associates, Cement Corporation of India Ltd, Century Textiles and Mysore Cements.

Textiles and Apparels

The textiles of Madhya Pradesh are a part of the rich heritage of India. The bordering States of Orissa, Gujarat, Maharashtra, Rajasthan and Uttar Pradesh have influenced the weaving, printing and colouring of textiles of Madhya Pradesh, but at the same time they have developed their own distinctive style and individuality.

Madhya Pradesh encompasses a number if textile units (approx 51 units). The textile export from M.P. is around $250 Million approx. The state has a potential of attracting a total investment of $2.2 Billion approx in the textile sector in next 5 years, with integrated business models consisting of Composite mills & Garment units. There are vast opportunities for Spun Yarn, Fabric, Textile / Fashion Designing, Readymade Garments.

Pharmaceuticals

The Pharmaceutical sector in Madhya Pradesh envisages a potential of $ 1 Billion Investment in next 5 Years. There is tremendous scope for Bulk drugs / formulations, Herbal products, Contract research, Research centres / laboratories.

Chemicals

The Chemical sector in Madhya Pradesh envisages an Investment opportunity of over $75 billion, with a potential growth of 5 billion in the next 10 years.

Auto and Auto components:

This sector offers tremendous potential with reference to HCV/LCV/MCV/PC/2-3 Wheeler, Auto Components: Tyres, Engines, and Gears.

Minerals / Stone

The opportunities in this sector include Stone cutting & Polishing, Marble, Granite, Sandstone, Mineral / Gas exploration, Mineral excavation and Power generation plant.

Tourism Industry

With the view to speed-up development of Tourism in Madhya Pradesh, the State Government announced a New Tourism Policy in January 1995. The new tourism policy envisages creation of an environment conducive to attracting increased private investment in the tourism sector, and a more meaningful role for the Government.

The opportunities in this sector include

• Hotels,
  
• Resorts,
  
• Charter Flights,
  
• Adventure Zones,
  
• Amusement Parks and
  
• Tourist trains.

Incentives in tourism Industry

A special package of incentives for the tourism industry has been prepared. These incentives will also be available for private entrepreneurs for any of the following activities:

• Hotels, Motels and Restaurants.
  
• Heritage Hotels, Health Farms, Recreation Centres, Ropeways, Golf Courses, Museums, Amusement Parks, Craft Villages, Convention Centres, and all other bonafide tourism related activities recognised by the government.
  
• A/c Luxury Coaches, A/c Mini Buses, and imported Limousines purchased by registered tour operators for tourist transport.
  
• Activities connected with adventure tourism, such as hang gliding, para sailing, river rafting, boating, trekking, rock climbing etc.
  

Specific Incentives

• Land
  • Government land will be offered with the approval of the Empowered Committee as equity participation on behalf of the Government at current market value for setting up Joint Ventures.
    
  • The companies thus formed who are given any kind of Government land will be expected to complete the project within a period of three years from the date of transfer of land, failing which the land will revert to the Government. The company will not be allowed to transfer the land to anybody else, or use it for any purpose other than that for which it is allotted.
    
  • For construction of approved category hotels, etc. in the urban areas, exemption under Section 20 of the Urban Land Ceiling Act will be made available on a case-to-case basis as decided by the Empowered Committee.

Luxury Tax

New projects shall be exempt from Luxury Tax for ten years from the date of commencement of commercial operations.

Sales Tax

New projects shall be exempt from Sales Tax for ten years from the date of commencement of commercial operations.

Entertainment Tax

Entertainment Centres will be exempt from Entertainment Tax for ten years from the date of commencement of commercial operations.

IT/IT related services

Investment opportunities exist in the area of business Process Outsourcing, and software / hardware segments. Madhya Pradesh is targeting 5-10% of the Indian share of Global IT/ITES market.

Potential Investment Projects

• Industry:
  a. New Export Oriented Ventures in SEZ.
  b. Software Development BPO Units in Crystal IT Park Institute of life science and Technology-A Design & A Road Map.
  
• Project for Maximization Oilseed and Pulses production in Bundelkhand Region of M.P.
  
• Opportunities for setting up Food Processing Industries.
  
• Infrastructure for Textile Centres.
  
• Textile related projects.
  
• Down Stream project on Bina Refinery & Coal Bedded Methane at Shahdol.
  
• Industrial Cities.
  
• SEZ & IT/ BT/ Agro Parks.
  
• Agro Processing in Agri Export Zones.
  
• Building up of Auto & Auto parts units considering the opportunities provided by Auto Track & Auto Cluster at Indore.
  
• Manufacturing, Maintenance facility, Logistic & Cargo Hub for Airline Industry at Indore/ Bhopal.
  
• Institute of life Sciences & Biotechnology.
  
• Herbal Minor Forest Produce and Medical Plant Production & Processing.
  
• Education:
  a. New institutes for professional courses.
  b. Air Hostess Training & Hotel Vocation Multi purpose school
  
• Central Business District Project.
  
• Eco & Adventure Tourism Projects.
  
• Fisheries & Tourism Project at Indira Sagar Dam.
  
• Development of Buddhist Circuit in Madhya Pradesh.
  
• IT Park at Bhopal.
  
• Software Technology Park at Bhopal.
  
• Science City at Dewas.

Policy Framework

Industrial Promotion Policy 2004

With a view to attain a double digit economic growth in Madhya Pradesh and for making the state prosperous, the state Cabinet has approved the new industrial policy (Industrial Promotion Policy 2004 and Action Plan). The Industrial Promotion Policy would be effective for five years from 1st April 2004.The new policy envisages on creating an industry-friendly administration, maximizing employment opportunities, tackling industrial sickness, to rationalizing rates of commercial taxes and bolstering private sector participation.

Objectives of the Policy

• To make state administration industry friendly by simplifying rules and procedures.
• To accelerate the pace of industrialization and make Madhya Pradesh industrially a leading state.
• To maximize employment prospects.
• To attract NRI and foreign investment by developing world-class infrastructure.
• To create congenial environment for the development of small, medium and large industries.
• To ensure balanced regional development by generating employment in the non-farm sector.
• To chalk out special packages for removing industrial sickness.
• To integrate the different employment oriented schemes in order to provide employment opportunities on a sustainable basis
• To rationalize commercial tax rates to make the state's industries competitive vis-à-vis industries in other states
• To provide direction to industrialization, keeping in view the available local resources and the existing industrial base.
• To ensure private sector participation in the state's industrialization process.
• To financially strengthen the undertakings of Department of Industries, enabling them to play a pivotal role in the promotion of industries.
  

Strategy of the Industrial Policy

• Providing incentives and facilities in the state to achieve objectives of Industrial Promotion Policy and ensuring effective implementation of planned strategy.
• An Employment Board has been set up for employment generation under which policy for employment and self-employment schemes will be framed and monitored.
• Madhya Pradesh Trade and Investment Facilitation Corporation (TRIFAC) will be set up.
• In the process of industrialization, maximum participation of private sector will be ensured.
• In order to promote investment, the rules of the business of the State Government would be amended and single window system would be strengthened and made effective and dynamic by enacting 'Industrial Facilitation Act'.
• Technological up-gradation, modernization and development of industrial units would be encouraged.
• Clusters of the industries would be identified and necessary steps will be taken to remove their deficiencies related to infrastructure, finance, and marketing and technology.
• Financial concessions will be provided to promote small, medium and large industries.
• Appropriate step for the development of the sectors of information technology, biotechnology, automobile, pharmaceutical, food processing, herbal industries will be taken by considering them as thrust sector Industries.
• Rules for the rehabilitation of sick and closed industries will be simplified and special package will be given for their promotion.

Full text of the policy (.pdf)

Information Technology Policy 2006

Madhya Pradesh strives to use Information Technology to achieve the following objectives:

• Improve the life of the common man leveraging the strengths of e-Governance.
  
• Attract investment in the sector so that the educated youth is able to contribute to the development of the State.
  
• Create a pool of highly skilled professionals who are at par with the best in the country.
  
• Transforming Resource Based Economy to Knowledge Based Economy.

Full text of the policy (.pdf)

Biotech Policy (2003)

The broad objectives of the policy shall, inter-alia, include promotion of biotechnology applications for:

• Conservation of the state's biodiversity and the sustainable use of its biotic resources.
  
• Production of high-yielding, draught and pest - resistant seeds for agriculture and horticulture crops suited to different agro-climatic zones.
  
• Improvement of the quality of livestock and poultry, especially the breeds indigenous to the state.
  
• Enhancement of the productive potential of the aquatic eco-system.
  
• Promotion and cultivation of medicinal and aromatic plants, and the processing and value addition of their produce.
  
• Production of cost effective drugs that help counter diseases common in the tropical and sub-tropical regions of the country.
  
• Promote environmentally safe technologies for pollution abatement, especially treatment of urban waste and industrial effluents.
  
• Afforestation and especially in the quick revival of species which have shown a tendency to decline.
  
• Generation and use of different types of bio-energy.

Strategy of the Policy

To help achieve the above laid objectives, the state government through its different organs endeavor for the following:

• Expansion of opportunities for biotechnology education for research, industry, farmers and community level extension services.
  
• Promotion of community based biotechnology applications in agriculture, horticulture, livestock & poultry, fisheries, forestry and health sectors.
  
• Promotion of studies in the legal and regulatory aspects of intellectual property rights involving different stakeholders including farmers, tribal and rural communities, and the practitioners of traditional and herbal medicine.
  
• Establishment of biotechnology industry in the state.
  
• Establishment of a biodiversity and biotechnology network of institutions and agencies.

Full text of the policy

Industrial Areas and Centres

S.No	Industrial Areas	Location
1.	Special Economic Zones	Indore
2.	Growth Centres - (19 Centres under these Areas)	Gwalior, Jabalpur, Bhopal, Indore,Rewa
3.	Food Parks (7 Parks under these Areas)	Bhopal, Nagpur, Indore, Gwalior, Jabalpur
4.	Crystal IT Park	Indore
5.	Major Industrial Areas (Approx 150 units under these areas)	Bhopal, Sihore, Raisen, Harda, Mandideep, Dewas, Pithampur, Khandwa, Jhabua, Dhar, Ujjain, Mandsaur

Prominent Companies in Madhya Pradesh

SRF Limited	Jaypee Group	Kirloskar
Airtel	Hindustan Lever	Pratibha Syntex Ltd
Lupin	Cadburys	Avtec
JK Tyre	Tata	Bharat Petroleum
BHEL	Hindustan Motors	Ruchi Soya Industries
Ranbaxy	Aditya Birla Group	Godrej
Eicher	Dainik Bhaskar	Reliance
Bajaj	Indorama	TAFE
Bridgestone

Useful Web Links

• Government of Madhya Pradesh
  
• Destination Madhya Pradesh