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Industrial Development & Economic Growth in Maharashtra

October, 2017

Maharashtra is situated in the western region of the country. It is most industrialised state in India and has maintained its leading position in the industrial sector in the country. The state is a pioneer in small scale industries and boasts of the largest number of special export promotion zones. Maharashtra has a large base of skilled and industrial labour, making it an ideal destination for knowledge based and manufacturing sectors.

Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 11.3 per cent to US$ 300.51 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.1 per cent to US$ 263.6 billion.

The state’s capital, Mumbai, is the commercial capital of India and has evolved into a global financial hub. The city is home to several global banking and financial service firms. Pune, another major city in the state, has emerged as the educational hub. It is the one of the largest producer of sugarcane, pomegranates and cotton in the country.

The Government of Maharashtra has several policies in place to set up the right kind of business climate in the state. These policies aim to motivate investors to invest into various sectors in the state, thereby contributing to the overall development of the economy. According to the DIPP, cumulative FDI inflows in the state of Maharashtra during April 2000 to March 2016 stood at US$ 82.62 billion.

Maharashtra is the largest producer of sugar and is the most industrialised state in India and has maintained the leading position in the industrial sector in the country. The state is a pioneer in small scale industries and boasts of the largest number of special export promotion zones.

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

  • In order to intensify the capacity of renewable energy sources in the state, the state government has professed a new energy policy, for which an investment of US$ 69.66 million has been proposed.
  • The Government of Maharashtra is promoting the development of several Special Economic Zones (SEZs) across Maharashtra for sectors such as IT/ITeS, pharmaceuticals, biotechnology, textile, automotive & auto components, gems & jewellery and food processing. Till July 2015, the state has 25 operational SEZs, of which the majority share is contributed by IT/ITeS, engineering and electronics segment.
  • The Government of Maharashtra provides single-window clearance to all units to reduce the average time required for establishment of such units and issue various clearances required for setting up of industries at a single point.
  • The Government is focusing on providing IT-related infrastructure, fiscal incentives to IT units and an institutional framework for the IT sector.
  • The Government is setting up the Delhi-Mumbai Industrial Corridor (DMIC), a mega infrastructure project of total cost US$ 90 billion, with the help of the Government of Japan, which has agreed to lend US$ 4.5 billion for this project. Seven nodes are in the development stage for the Phase-1 of the project, which is expected to greatly boost India’s manufacturing sector.
  • The Maharashtra government has set up an international biotech park in Hinjewadi, 10 km from Pune. This is the first public-private biotechnology park initiative in the state.
  • Textile parks, aimed to provide world-class infrastructural components for the textile sector and enhance productive capacity, are being set up in Maharashtra to maintain its leadership position in textile exports and production.
  • The state government announced plans to invest US$ 1,658.2 million for the development of railways infrastructure.
  • As a part of the ‘Make in India’ initiative, the state government in planning to come up with an electronics policy for companies interested to invest in this sector in Maharashtra.

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