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Industrial Development & Economic Growth in Madhya Pradesh

March, 2018

Madhya Pradesh is an agrarian state. Around 74 per cent of the population of the state is directly or indirectly, dependent on agriculture. It is among the fastest growing states in India. The state is centrally located in India. Major consumer goods multinationals are situated in Madhya Pradesh in order to access major consumer markets and metro urban communities like New Delhi (740 km), Mumbai (780 km), Kolkata (1,350 km) and Chennai (1,435 km) (all distances from Bhopal).

The state is rich in natural resources, fuels, minerals, agriculture and biodiversity. Upcoming theme based SEZs near Jabalpur, industry parks in Indore and food parks at multiple locations aim to promote sectoral growth. The state is rich in minerals and has the highest stone, diamond and copper reserves in India, notwithstanding noteworthy reserves of coal, coal-bed methane, manganese and dolomite.

Between 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 15.21 per cent to US$ 99.41 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 15.16 per cent to US$ 88.77 billion.

Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC) is the nodal agency for industrial growth in the state. It is the central point to coordinate, activate and ensure implementation of mega infrastructure projects. MPSIDC has identified 19 industrial growth centres to attract medium and large industries and non-resident Indians (NRIs) to the state, and provide various facilities and concessions to them.

The state has excellent infrastructure, with 19 industrial development parks, 129 industrial areas, six food parks, eight integrated development centres, three dry parks, one stone park, one IT park, one SEZ and an apparel park at Indore. A gems and jewellery park is being developed in Indore to promote the diamond industry in the state.

The following are some of the major initiatives taken by the government to promote Madhya Pradesh as an investment destination:

  • As per budget 2017-18, provision of US$ 62.08 million under Mukhyamantri Gram Sadak Yojana and that of US$ 28.86 million for State Rural Road Connectivity Scheme, have been made.
  • Work on construction of IT parks in 4 major regions of the state, including Indore, Gwalior, Bhopal and Jabalpur, was initiated during 2016-17. Moreover, electronic manufacturing clusters are also being established in Jabalpur and Bhopal. For these new establishments, Government of Madhya Pradesh allocated an amount of US$ 9 million as per the Budget 2016-17.
  • For a structured growth, the government has divided the state into six clusters - Indore, Bhopal, Jabalpur, Gwalior, Rewa and Sagar. The state government has announced plans to upgrade existing apparel clusters at Indore and Jabalpur.
  • The state government has established a textile park in Chhindwara. Trident Group is going to set up a mega industrial textile hub at Budhni in the state. Setting up of the textile hub will entail an investment of Rs 6,250 crore (US$ 965.4 million) and generate employment for 16,500 persons.
  • MPSIDC has undertaken a US$ 13.3 million project to bring water from Narmada River to Dewas under the BOT scheme. The project would likely resolve the water problems of 460 industries and facilitate further industrialisation of the Dewas industrial belt.
  • The state is developing two SEZs at Hargarh and Umariya- Dungariya. Once operational, the Hargarh SEZ will provide infrastructure support to mineral-based industries, while Umariya-Dungariya will cater to the agriculture and food processing industries.
  • Indore has been identified for infrastructure development under the Textiles Centre Infrastructure Development Scheme (TCIDS). Indore is a cluster of the readymade garments industry with over 1,260 garment units.
  • To attract investment into the textile sector, the government has provided an interest subsidy for five years at the rate of five per cent for textile projects and seven per cent for composite textile projects. Furthermore, the government provided 100 per cent assistance in plant and machinery for eight years under Industrial Investment Promotion Assistance Scheme.

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