Arunachal Pradesh

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Industrial Development & Economic Growth in Arunachal Pradesh

November, 2018

Arunachal Pradesh is the largest among the seven states located in the Northeast of India. Currently the state's economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, pulses, sugarcane, ginger, oilseeds, cereals, potato, and pineapple. The state has considerable mineral reserves that offer huge potential. The state’s hydropower generation potential is estimated at 50,238 Megawatt (MW). As of October 2018, the installed hydropower generation capacity of the state was 118 MW.

The state’s diverse topography offers ample of opportunities for non-timber based industries such as bamboo, cane and medicinal plants. Horticulture has a vast potential, owing to good agro-climatic conditions and topography, for the development of varied varieties of fruits and vegetables.

Between 2011-12 and 2017-18, the Gross State Domestic Product (GSDP) increased at a Compound Annual Growth Rate (CAGR) of 14.06 per cent to Rs 243.53 billion (US$ 3.78 billion) whereas the per capita GSDP increased at a CAGR of 11.79 per cent to Rs 154,229 (US$ 2,393).

The resources, policy incentives and climate in the state support investments in mining and mineral products (including cement), tissue culture and floriculture, plantation crops (tea, rubber, etc.) and agro-based industries.

The state’s location provides opportunities for international trade with South Asian countries such as Myanmar, Bhutan and China. Textiles and handicrafts from the state are in demand in neighbouring countries.

The central government approved ‘North East Industrial and Investment Promotion Policy’ (NEIIPP), 2007 provides several incentives - incentive on business expansion, 100 per cent excise duty and income tax exemption, capital investment subsidy, interest subsidy and insurance premium reimbursement.

The Department of Industries has set up District Industries Centres (DICs) and Sub-District Industries Centres (Sub-DICs) for the industrial development of small scale, tiny and village industries.

Major initiatives taken by the government to promote Arunachal Pradesh as an investment destination are:

  • The State Industrial Policy, 2008, of Arunachal Pradesh lists mineral-based industries (such as ferro-alloys, cement plants, etc.) as thrust sectors. Arunachal State Mineral Policy, 2014 has been prepared on the basis of the objectives of the National Mineral Policy, 2008. Arunachal Mineral Development Fund shall be created in accordance with this policy for its utilisation towards mineral exploration and development of mining activities in the state.
  • A Greenfield airport in Hollongi was  announced  in October 2018 to provide aviation services to state’s capital Itanagar.
  • As of July 2018, 24 Gram Panchayats (GPs) have been made service ready under the Bharat Net Programme.
  • The Government of Arunachal Pradesh plans to construct new roads and even connect the villages located at the India-China border. For the construction of this project, the Government approved an investment of US$ 555 million and the roads would cover a length of 2,098.40 km with 219 bridges.
  • The government has invited domestic power companies in the region to develop hydropower plants.
  • The Ministry of Environment and Forests (MoEF) granted pre-construction scoping clearances to over 50 projects under the EIA notification 2006. Final environmental clearance has been awarded to 13 projects.

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