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  • INDIAN STATESEconomy and Business

    Punjab

    www.ibef.org

  • Published by

  • INDIAN STATESEconomy and Business

    Punjab

    www.ibef.org

  • PUNJAB PAGE 3

    CONTENTS

    Executive Summary 5

    Economic Snapshot 7

    The State Economy 9

    Infrastructure 10Social infrastructure 10Access infrastructure 10Communications infrastructure 11Industrial infrastructure 11

    State Policy 13Vision & Mission 13Industrial policy 13IT policy 13e-Governance 14Infrastructure policy 15Biotech policy 15

    Business Opportunities 17Key industries 17Exports 18Investment 19Potential hubs for investment 19

    Key Players 23

    Doing Business in Punjab 26Indicative list of approvals and clearances 26Cost of setting up business 27Contact for information 28

    A report by PricewaterhouseCoopers for IBEF

  • PUNJAB PAGE 5

    Executive Summary

    The state has a marked presence in the agro-businessand the light engineering goods businesses. It has over 19.7 million small and medium industries, about 653 large-scale industries and provides more than 75 per cent of the countrys requirement for bicycles,sewing machines, hosiery and sports goods.At parwith the best in the world, these high quality productshave carved a niche for themselves in markets acrossthe globe.

    The state is committed to creating a climateconducive to investment. It has been proactive in attracting investment from the private sectorparticularly in areas like agro-processing,infrastructure, Information Technology (IT),textiles and biotechnology.

    Punjab was the first Indian state to translateagricultural technology into green revolution,recording the highest growth rate in food production.Today, with its rich agricultural resources andfavourable climate, the state continues to be one of the largest producers of food grains and cash crops in the country.

    Punjab contributes 68 per cent to the annual foodproduction of India.The states index of agriculturalproduction rose from 269.55 in 1990-91 to 314.73during 2002-03, showing an increase of 16.8 percent.The state has 3 per cent of Indias net sownarea and 1.5 per cent of its farming population.Punjabs large agriculture base gives it a competitiveadvantage in industries such as food processing and textiles.

  • Industrial Centres in Punjab

  • PUNJAB PAGE 7

    An Economic Snapshot

    Capital Chandigarh

    Area (sq km) 50,362

    Population (2001, million) 25.2

    Literacy rate (%) 70

    Human development index 0.537 (all India rank 2nd)

    Net State Domestic Product(NSDP) (US$ billion) 8.6

    NSDP growth (%) (10 years) 4.06

    Per Capita Income (US$) 574

    Exports (US$ million) 1,558

    National highways length (km) 1,557

    Rail length (km) 2,102

    Domestic airports Chandigarh, Ludhiana

    International airport Amritsar

    Key industries Agro-processing Textiles, Hosiery and WoollensLight Engineering Goods

    Industries with growth potential Agri-businessIT and ElectronicsInfrastructure DevelopmentBiotechnology

  • Advantage Punjab

    n Leading agriculture state, per capita income is 25 per cent higher than thenational average

    n Second largest producer of cotton and blended yarn, third largest producer of mill made fabric

    n Competitive strength in textiles, woollens and auto parts due to presence of industry clusters

    n Opportunity for further developing sectors like agro-processing,IT, electronics and biotechnology

    n Potential to introduce private participation in infrastructure

  • In 2004, the state enjoyed a per capita income of US$ 574. Punjab ranked second on the HumanDevelopment Index, in the Human DevelopmentReport (2001), reflecting a strong performance on the social development front.

    Punjab has been focusing on developing its humanresources by building skills.The census (2001) reflectsthat the state has been successful in diverting itsworkforce to non-agriculture activities. Of its totalworkforce, only 39.36 per cent workers were foundto be cultivators or agricultural labourers.

    Punjab - NSDP growth

    Source: Punjab Statistical Abstract 2003 and Punjab Budget

    1998

    US$

    bill

    ion

    0

    2

    4

    6

    8

    10

    1999 2000 2001 2002 2003 2004

    Punjab - Sectoral Contribution to GDP

    39% 38%

    23%

    Services

    Agriculture

    Industry Source: Punjab Economic Survey 2003-04

    PUNJAB PAGE 9

    THE STATE ECONOMY

    Punjabs Net States Domestic Product (NSDP) stoodat US$ 8.6 billion in 2004 and has been growing at a compounded annual growth rate of 4.06 per centsince 1998.

    In Punjab, agriculture accounts for 38 per cent of Gross Domestic Product (GDP), reflecting a hugescope for developing industry and services sectors in the state. Between 1994 and 2003, the industrialsector in Punjab grew at 5 per cent per annum whilethe services sector grew at 7 per cent per annum.

    Punjab has consistently been ranked first in thecountry on the infrastructure development index.According to a Centre for Monitoring IndianEconomy (CMIE) report (2000-01), on a nationalaverage of 100, Punjabs relative infrastructure indexwas the highest at 186.

  • INFRASTRUCTURE

    and state highways aggregating 3,700 km providesconvenient access to all parts of the state. Under theon-going National Highway Development Programme(NHDP), a length of 311 km is being converted into4/6 lanes highways.The state government has alsoannounced plans to develop 12 road corridors,aggregating 845 km through public-privatepartnership.These projects are likely to commence in 2005.

    Punjab is well connected by rail and all its main citiesChandigarh, Ludhiana,Amritsar, Ferozepur andJalandhar are on the main line to New Delhi.With the completion of a number of on-going railwayprojects, the railway infrastructure in Punjab will get a further boost.These projects shall improve theintra-state connectivity and enhance the carryingcapacity of major rail corridors in the state facilitatingfaster movement of goods from the state, particularlyfood grains and items destined for export markets.

    Punjab has an international airport at Amritsar anddomestic airports at Chandigarh and Ludhiana.Theairport at Amritsar has an air cargo complex, whileLudhiana has an inland container depot. Containerfreight stations are also planned at Jalandhar, Ludhiana,Amritsar and Rajpura.

    PowerPower is pivotal to Punjabs industrial and agriculturesectors and the state has been working towardsexpanding and strengthening its power infrastuctureto meet the increasing consumer demand in varioussectors of the economy.

    The state government has signed Power PurchaseAgreements with a number of power generatingagencies through Power Trading Corporation, NationalThermal Power Corporation (NTPC) and NationalHydroelectric Power Corporation (NHPC). Punjab

    Punjab has been working towards improving itsinfrastructure to ensure better accessibility andfacilities to the industry at large and attractinvestment into the state.

    Social infrastructure

    Punjab has a literacy rate of 70 per cent, according to the census (2001).The state has been steadilybuilding its human resources to enable its peoplecope with the challenges of the 21st century. It hasbeen encouraging private sector participation in theeducation sector, particularly in the area of technicaland vocational education.

    The state has 41 engineering colleges, 15 pharmacycolleges, 46 management and computer scienceinstitutes and over 170 industrial training institutes,including those in the private sector. Every year about 17,640 engineers and close to 31,689 technicalmanpower graduate from Punjabs industrial training institutes.

    Punjab is also gearing up to be a hub ofbiotechnology. It has five leading biotech institutionsthat produce 200 graduates and 100 postgraduatesand doctorates in the fields of biotechnology/bio-engineering.These institutes are the Punjab State Council for Science & Technology (PSCST),Punjab Agricultural University (PAU),Thapar Instituteof Engineering & Technology (TIET), Institute ofMicrobial Technology (IMTECH) and the PostgraduateInstitute of Medical Education & Research (PGIMER).The state also has a network of 205 hospitals and2037 health centres.

    Access infrastructure

    The road infrastructure in Punjab is amongst themost developed in India.The network of national

  • PUNJAB PAGE 11

    of India Ltd (GAIL) to set up a 1000 MW gas plantnear Dorhah as a cost of over US$ 851 million.A Memorandum of Understanding (MoU) with NHPC is also on the avil to initiate the process of implementing the 168 MW Shahpur Kandi Hydel Project.

    Communications infrastructure

    The state has seen a significant improvement in itstelecom infrastructure since the announcement of the new National Telecommunications Policy(NTP99), which emphasised the participation of theprivate sector in the telecom industry. Since then,fixed wire telephone subscribers have increased from0.4 million in 1995 to 1.9 million in 2002, whilemobile subscribers touched 2.3 million in June 2004.

    Industrial infrastructure

    The Punjab State Industrial DevelopmentCorporation (PSIDC) has developed over 80industrial estates, growth centres and industrial focalpoints in the state.These estates provide units basicinfrastructure, which include uninterrupted electricityand water supply, sewerage and common roads.

    Punjabs key business and commercial centres are:

    Chandigarh-MohaliChandigarh is the capital city of Punjab and theadministrative headquarters of the Punjabgovernment. Mohali is a twin township of Chandigarhand the hub for Information Technology (IT)/Information Technology Enabled Services (ITES),electronics