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  • INDIAN STATESEconomy and Business

    Chhattisgarh

    www.ibef.org

  • Published by

  • INDIAN STATESEconomy and Business

    Chhattisgarh

    www.ibef.org

  • CONTENTS

    Executive Summary 3

    Economic Snapshot 5

    The State Economy 7

    Infrastructure 8Social infrastructure 8Access infrastructure 8Communications infrastructure 10Industrial infrastructure 10Key industrial centres 11

    State Policy 12Vision & Mission 12Industrial policy 12Human resource policy 13Mineral policy 13IT policy 13Tourism policy 14Biotech policy 14e-Governance 14

    Business Opportunities 15Key industries 15Exports 16Investment 16Potential hubs for investment 17

    Key Players 18

    Doing Business in Chhattisgarh 20Obtaining approvals 20Cost of setting up business 20Contact for information 21

    A report by PricewaterhouseCoopers for IBEF

  • CHHATTISGARH PAGE 3

    Executive Summary

    has been limited to 18 (compared to 52 in theundivided state).

    The state has recognised infrastructure provisioningas an industry and has drawn up an InfrastructureDevelopment Action Plan to facilitate timelydevelopment of physical infrastructure in the state.

    Chhattisgarh is rich in minerals and natural resources.The state has a substantial share of Indias coal,iron-ore, bauxite and limestone reserves. In all 28 varieties of minerals are found in the state.The key sectors of Chhattisgarhs economy arecement, mining, steel, aluminum and power.

    Chhattisgarhs large coal reserves present a largeopportunity for electricity generation in the state.The state also offers opportunities for investment in infrastructure development.

    Chhattisgarh came into being as a state of the IndianFederal Union on November 1, 2000. It was carvedout of the sixteen south-eastern districts of undividedMadhya Pradesh. Geographically, it has an area of 135,191 sq km, which makes it the ninth largeststate in India.

    With a Net State Domestic Product (NSDP) of over US$ 3.3 billion, Chhattisgarhs economy is the sixteenth largest in India. Being a newly createdstate, Chhattisgarh has the advantage of a responsiveadministration.The state government is committed to containing establishment costs to less than 40 per cent of its revenues, so as to make resourcesavailable for economically beneficial activities.The state government has undertaken variousinitiatives to curtail unproductive administrativeoverheads and encourage public-private partnership.The number of departments in the state government

  • Industrial Centres in Chhattisgarh

  • CHHATTISGARH PAGE 5

    An Economic Snapshot

    Capital Raipur

    Area (sq km) 135,191

    Population (2001) 20.8 million

    Literacy Rate (%) 65

    NSDP (US$ billion) 3.3

    NSDP growth (%) (10 years) 2

    Per Capita Income (US$) 264

    National highways length (km) 1,827

    Rail length (km) 1,180

    Domestic airport Raipur

    Key industries CementMiningIron & SteelAluminium

    Industries with growth potential Power Infrastructure

  • Advantage Chhattisgarh

    n A new state with an opportunity to adopt a modern model for economicdevelopment

    n Large mineral resources to facilitate development of cement, steel, aluminiumand electricity generation

    n Single window clearance framework with statutory backing

    n Electricity surplus state, with relatively low land and labour cost

  • The contribution of the services sector registered an increase from 30 per cent to 36 per cent duringthe same period.

    CHHATTISGARH PAGE 7

    THE STATE ECONOMY

    Between 1994 and 2003, the states NSDP increased from US$ 2.7 billion to US$ 3.3 billion at a compounded annual growth rate of 2 per cent.

    During 2002-03, Chhattisgarhs per capita incomestood at US$ 264. Between 1993-94 and 2001-02,the share of agriculture sector in the state declinedfrom 40 per cent to 36 per cent and the industrialsector from 30 per cent to 28 per cent.

    Chhattisgarh - Sectoral Contribution to GDP

    36% 36%

    28%

    Services

    Agriculture

    Industry

    Source: Estimate of State GDP of Chhattisgarh, 1993-2002,Directorate of Economics & Statistics, Chhattisgarh

    Chhattisgarh - NSDP Growth

    Note: the figures are at 1993-94 prices,Source: Estimate of State GDP of Chhattisgarh, 1993-2002,

    Directorate of Economics & Statistics, Chhattisgarh

    1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

    US$

    bill

    ion

    Year

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    3.0

    3.5

    4.0

  • INFRASTRUCTURE

    Access infrastructure

    Chhattisgarh is a land locked state that is surroundedby six Indian states - Uttar Pradesh, Jharkhand, Orissa,Andhra Pradesh, Maharashtra and Madhya Pradesh.This makes its geographic location strategic.By developing its infrastructure the state can use its geographic location to develop a logistics andwarehousing network to service the region.

    The total length of roads in Chhattisgarh stands at over35,388 km.The state has 24,236 km of surfaced roads.Chhattisgarhs road density stands at 26.2 km per 100 sq km.The total length of national highways passingthrough the state is 1,827 km. National Highway 6,which connects the west to the east, passes throughsome of the most industrialised areas of the state.

    To meet states growing transport requirements,the National Highways Authority of India (NHAI) is planning to develop five national highway projectsaggregating 450 km through private sectorparticipation.The states highway network is beingupgraded with funding from the Asian DevelopmentBank.The project envisages improving 1,700 km of state roads by 2009 with an investment of US$ 286 million.Another five projects aggregatingUS$ 50 million of private investment are in variousstages of implementation in the state.

    The existing industrial areas, industrial parks, exportzones etc. and those to be set up in future, will beconnected by excellent roads with the national / statehighways and important railway stations.

    Given the significant presence of mineral-basedindustries in the state, availability of efficient railwaylinks is critical. Currently, the total railway network in Chhattisgarh is 1,180 km. Of this, almost 861 km is electrified track.

    Social infrastructure

    Since its creation in 2000, the state has laid particular emphasis on improving social infrastructurethrough a focus on poverty alleviation and rural development.

    Chhattisgarh has a population of over 20.8 million(Census 2001). Its population density stands at 154 persons per sq km, much lower than the all India-average of 324 persons per sq km. Populationgrowth rate in Chhattisgarh stood at 18 per centduring 1991-2001, lower than the national growthrate of 21.3 per cent during the same period.

    Chhattisgarhs social performance (as measuredthrough the Human Development Index in 2001)shows that certain parts of the state (Durg (0.62),Raipur (0.56) and Korba (0.56)) have a relatively well-developed social infrastructure as compared to other districts in the state.This may be attributedto industrialisation and better infrastructure networkin these regions.

    The state has done well in terms of literacy,which increased from 43 per cent in 1991 to over 65 per cent in 2001. Chhattisgarhs educationnetwork consists of 4 universities, 116 colleges,over 31,600 primary and 8,930 secondary schools.Its college network includes 12 engineering colleges,with an annual intake of over 3,300 students,69 technical training institutes and 2 medical collegesthat offer 200 seats.This strong network of traininginstitutes provides a pool of qualified professionals to businesses and industries located in the state.

    The states network of health facilities comprises 27 hospitals, 23 dispensaries, 631 primary and community health centres and 3,818 sub-primary centres.

  • CHHATTISGARH PAGE 9

    All necessary efforts will be made and steps taken for early commencement of work on Dalli-Rajhara-Raoghat-Jagdalpur rail line project.

    Recognising the potential for mining and metalindustry related traffic in the state, the Indian Railwayshas established a new zone named South-East Central Railway with its headquarters at Bilaspur.Indian Railways is also implementing projects for new railway lines in the state aggregating 235 km at a cost of approximately US$ 80 million.

    Expansion and capacity augmentation of the railwaynetwork in Chhattisgarh will provide impetus to movement of goods within and outside the state.It will also improve Chhattisgarhs integration with thenational railway system and enhance the competitivenessof industries located in Chhattisgarhs hinterland.

    Chhattisgarh has one airport in Raipur, the statecapital. Rapiur is connected by air to New Delhi,Mumbai, Kolkata etc.The state does have smallerairports / air strips helipads at a number of locationsincluding Raigarh, Jashpur,Ambikapur, Bilaspur, Korba,Sarangarh, Jagdalpur, Bhilai etc.

    Both domestic and foreign capital and public privatepartnership will be encouraged in the basicinfrastructure projects. For this purpose, apart fromthe State Government implementing projects from its own resources, projects based on BOT,BOOTetc. will be permitted.

    Power Chhattisgarh has the unique distinction of being a power surplus state. The installed electricitygeneration capacity of Chhattisgarh is 1,401 MW.96 per cent of Chhattisgarhs electricity generationcapacity is based on thermal energy. Hydel generationaccounts for the remaining 4 per cent of power.

    Electricity consumption in Chhattisgarh increasedfrom 2,977 million units (MU) in 1996-97 to over3,540 MU in 2001-02, thus indicating a compounded

    annual growth rate of 3 per cent. On a