Wednesday, 8 June 2011

Investment Scenario of U.P.

Uttar Pradesh has been in the forefront of industrial development. The State has registered a growth rate of 5.5 percent in GSDP, while industrial sector has growth rate of 6.6% during the Tenth Plan. In first three years of the eleventh plan viz. 2007-08, 2008-09 & 2009-10, the state economy as well as industrial sector has registered the following growth rate at constant (2004-05) prices :

Source - Planning Department, Uttar Pradesh


GoUP is committed to the industrial growth of state and has therefore offered various incentives & concessions at each stage for encompassing all around development of the state. Incentives and concessions, being offered by the state for attracting investment in manufacturing sector, are summarized here under :

1.   Grant of Interest Free loan for 10 years repayable after 7 years to new units whose first date of sale falls on or after 11.3.2003 and which have made fixed capital investment of Rs.5.00 crore or more in Food Processing Sector, Rs.10.00 crore or more in Eastern U.P. & Bundelkhand Region and Rs.25.00 crore or more in other districts.  Amount of loan shall not exceed 10% of turnover or sum of the Trade Tax/ VAT and Central Sales Tax Paid by the units during the year.
2.   100% Exemption from stamp duty on transfer of land to : -
i.  Projects making investment of Rs.750.00 crore or more
ii. All micro and small new units in Notified districts of Eastern UP and Bundelkhand Region
iii.Agro Processing, Information-Technology / Bio-Technology and specified Infrastructure units.
iv. Notified Service Sector - Multi-facility Hospitals, Medical or Dental College, Other Educational Institutions, Multiplex Cinema Halls, Shopping Malls and Entertainment Centers  with an investment in plant and machinery not less than Rs. 10 crore
5.   50% Exemption from stamp duty on transfer of land to all other new units.
6.   Reduction of stamp duty to rupees two per thousand on mortgage of title deeds, transfer of movable property, mortgage of property without possession, collateral security and bank guarantee (max. Rs.10,000/-).
7.   Exemption from Electricity duty for 15 years to pioneer units and 10 years to all other new units.
8.   Exemption from VAT on direct purchase of raw material, consumables, lubricants, parts and fuel other than diesel and petrol for use in manufacture of goods for export or for use in packing of such goods.
9.   Exemption from Mandi fee for five years to new food processing units having investment of Rs.10.00 crore or more in plant and machinery on purchase of raw material for use in manufacture of agricultural produce.

The above incentives have witnessed the substantial increase in industrial investment, number of units set-up and employment generated in the state, which is evident from the table given below. During the year 2009-10, the investment reached an all-time high of Rs 11,952 crores by way of setting up of 37,435 number of units with employment generation of 2,96,669 number persons.
 
Details of Investment Generated in the State Manufacturing Sector1

Financial Year
Investment
(in Rs. crores)
Units set up
(in Nos.)
Employment Generated
(in Nos.)
2007-08
4,918.26
32,837
2,07,809
2008-09
5,176.63
     33,771
2,12,573
2009-10
11,951.93
37,435
2,96,669
2010-11
10,446.03
35,861
2,53,078









Service sector in the state2

                (Rs. in Crores)
Financial Year
Service Sector other than I.T Sector
I.T Sector
Total
Nos.
Investment
Nos.
Investment
Nos.
Investment
2007-08
28
2,504.55
4
89.45
32
2,594.00
2008-09
19
2,911.37
3
325.00
22
3,236.37
2009-10
20
2,537.11
4
31.10
24
2,568.21
2010-11
15
1,858.29
3
1,000.00
18
2,858.29

Break-up of Investment in Service Sector3                      

                                                              (Rs. in Crores)
Particulars
2007-08
2008-09
2009-10
2010-11
Total
Hotel & Restaurant Services
30.00
10.00
176.86
-
216.86
Recreation Services
1,215.00
-
6.00
220.24
1,441.24
Transport services
846.58
2,523.46
2,169.53
1,516.05
7,055.62
Communication services
104.94
-
168.72
-
273.66
Health Services
-
250.00
-
2.00
252.00
Wholesale & Retail Services
50.00
30.91
16.00
120.00
216.91
IT Services
89.45
325.00
31.10
1,000.00
1,445.55
Misc. Services
258.03
97.00
-
-
355.03
Total
2,594.00
3,236.37
2,568.21
2,858.29
11,256.87

Investment in Infrastructure Sector4

To further strengthen the growth and the overall development of the state to next level, the state is building a world class infrastructure in expressways, highways, power, urban amenities, health and education. Government has consciously adopted the policy of involving private sector participation in this effort so as to fully utilize their efficiency in delivery of public services.  A transparent procedure based on the guiding principles of the Government of India has been formulated for the selection of private project developers and concessionaires in the development of infrastructure facilities, which has translated the investment in various sectors under private and public, of which the prominent sectors are detailed here under :

(Rs. in crores)
SNo
Name of the Sectors
2007-08
2008-09
2009-10
2010-11

Expressways
942.00
1,938.00
  2,948.00
  2,273.00

Urban & Housing
648.26
845.06
 4,058.38
  3,191.06

Energy
5,007.63
10,325.08
11,323.71
10,409.79

Water Supply & Sewerage Treatment Plant
   141.40
     141.16
      140.91
      278.90

Solid Waste Management Projects
-
-
11.94
262.06

Total
6,739.29
13,249.30
18,482.94
16,414.81


Total Investment generated

(Rs. in crores)
SNo.
Name of the Sectors
2007-08
2008-09
2009-10
2010-11

Manufacturing Sector
4,918.26
5,176.63
11,951.93
10,446.03

Miscellaneous & Service Sector
2,594.00
3,236.37
2,568.21
2,858.29

Infrastructure Sector4
6,739.29
13,249.30
18,482.94
16,414.81

Total
14,251.55
21,662.30
33,003.08
29,719.13


Uttar Pradesh has played a vital role to boost the speed of economy of the country by emphasizing the export, which could earn a good amount of foreign currency. Same is evident from the details given here as under:

Export figures

                                                                                 (Rs. in Crores)
Financial year
Software5
Export from the state other than software6
Total Export
2006-07
8,453.00
16,433.65
24,886.65
2007-08
10,695.21
17,291.91
27,987.12
2008-09
10,264.36
34,818.91
45,083.27
2009-10
13,832.10
26,204.07
40,036.17
2010-11
11,768.33
(Approx.)
*22,804.09
     34,572.42
                             *  (Provisional figure from April, 2010 to Nov. 2010)

The efforts, as explained above, have started yielding results. Now the time is not far away, when Uttar Pradesh shall be placed ultimate destination for investment not only in the country but across the globe.


Anamika Singh
Jt. Executive Director
Udyog Bandhu




[1] Directorate of Industries, UP
[2 & 3]  As per CMIE data base.
[4] These figures have been obtained from the department concerned.
[5] Software Technology Parks of India, Lucknow.
[6] DGCI&S Kolkata


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