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Industrial Development & Economic Growth in Sikkim

May, 2018

Sikkim is one of the fastest growing states in India. The state has favourable agro-climatic conditions, which support agriculture, horticulture and forestry. As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country. It is home to around 5,000 species of flowering plants, 515 rare orchids, 60 primula species and 36 rhododendron species. This makes it one of the leading states in the Northeast region in terms of production and supply of cut flowers to mainland consumer markets. The state is also considered as a huge cardamom epicentre of the world, producing around 80 per cent of large cardamom in the country. Production of large cardamom in Sikkim is estimated to have reached 4,684 tonnes in 2016-17

Between 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a compound annual growth rate (CAGR) of 11.05 per cent to Rs. 0.19 trillion (US$ 2.81 billion) whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.30 per cent to was Rs. 0.17 trillion (US$ 2.48 billion).

The state's economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, oil seeds, pulses, spices, cereals barley, oranges, tea and cardamom.

Brewing, distilling, tanning and watchmaking are the main industries located in the southern regions of Sikkim. A small mining industry exists in the state, extracting minerals such as copper, dolomite, talc, graphite, quartzite, coal, zinc and lead.

Some of the major initiatives taken by the government to promote Sikkim as an investment destination are:

  • The state government launched Sikkim AGRISNET, an internet-based agriculture information centre, to promote scientific agricultural methods and convert research into practice in the agricultural sector.
  • Sikkim had a total road network of 2,425.45 km. In 2018, National Highway & Infrastructure Development Corporation Limited will construct 250km new road from NH31C near Bagrakote and ends at Gangtok. This project was approved by centre in 2015.
  • In May 2018, Indian Railways has plan several projects worth of Rs 40,000 crore (US$ 6.21 billion) to construct rail links which will connect capital cities of northeast states such as Manipur, Mizoram, Meghalaya, Sikkim and Nagaland.
  • As per state budget 2018-19, out of 736 Home stay sanctioned earlier, more than 90 per cent have been completed and made operational. All eligible habitation as per 2001 census in the state shall be connected by PMGSY roads by the year 2019. The total budget allocation for urban development and housing during 2018-19 is Rs. 136.23 crore (US$ 21.14 million).
  • Pharmaceutical is an emerging industry in Sikkim due to tax incentives offered by the state government as well as low manufacturing and labour costs. Sikkim is home to 14 major pharma companies, which have significant investments in the state. These include Cipla, Sun Pharma, ZydusCadila, Alembic, IPCA, Alkem Lab, Intas Pharma, Torrent Pharma and Unichem.
  • The Sikkim government has announced a technical collaboration with floriculturists from the Netherlands and Thailand to develop the state's potential in floriculture and market cut flowers from the state globally.
  • The Department of Information Technology, Government of Sikkim is in the process of setting up an IT park and National Institute of Electronics and Information Technology (NIELIT) at Pakyong. The IT Park will have state-of-the-art facilities that will offer a plug and play environment and cater to the specific needs of the information technology and business process outsourcing (BPO) segments.
  • The Sikkim Manipal University (SMU), a partnership between the Government of Sikkim and Manipal Education and Medical Group (MEMG), provides technical, healthcare and science education. It is rated as one of the top universities in the country.

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