Industrial Development & Economic Growth in Madhya Pradesh

Madhya Pradesh is an agrarian state. The primary sector accounts for 42.89 per cent of the state’s GVA, as of 2017-18. It is among the fastest growing states in India.

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. Further, the state is home to over 280 pharmaceutical units operating in the industrial areas of Dewas, Indore, Pithampur, Mandideep and Malanpur.

Between 2011-12 and 2019-20, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 12.72 per cent (in rupee terms) to Rs 8.26 trillion (US$ 118.20 billion), whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 17.37 per cent to US$ 102.30 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.

Merchandise exports from Madhya Pradesh have increased from US$ 4.13 billion in 2014-15 to US$ 6.38 billion in FY18-19 and reached US$ 2.65 billion in 2019-20*.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in Madhya Pradesh, from April 2000 to June 2019, totalled to US$ 1,433 million. 152 investment intentions worth Rs 12,604 crore (US$ 1.80 billion) were filed in the state during 2019 (till October 2019).

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

• MP is emerging as a solar power hub with an installed solar power capacity of 1,882.32 MW as of October 2019. In December 2019, the government announced setting up a 2,000 MW Solar Power Park in the Bundelkhand and Chambal regions.
• From April 2019, Rewa Ultra Mega Solar Limited (RUMSL) in Madhya Pradesh started providing 27 megawatt of solar power to Delhi Metro Rail Corporation (DMRC).
• The state is home to five operational SEZs, six notified SEZs and 12 formally approved SEZs. Bhopal, Indore, Gwalior and Jabalpur are the major locations where SEZs have been approved.
• By end of 2019, Habibganj railway station in Madhya Pradesh will become Indian Railways’ first airport-like hub.
• As per budget 2019-20, the state government proposed an allocation of Rs 229 crore (US$ 32.77 million) for the development of the state’s tourism department.
• In state budget 2018-19, the government proposed an allocation of US$ 32.44 million under skill development scheme (Asian Development Bank projects).
• To attract investment into the textile sector, the government has provided an interest subsidy for five years at the rate of 5 per cent for textile projects and 7 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.

*-till September 2019

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