Gujarat - Economy

Economy

Gujarat has some of the largest businesses in India. Major agricultural produce of the state include cotton, groundnuts(peanuts), dates, sugar cane, milk and milk products. Industrial products include cementand petrol.According to the report on economic freedomby the Cato Institute, Guajarat is the second most free state in India, the first being Tamil Nadu.Reliance Industriesoperates the oil refinery at Jamnagar, which is the world's largest grass-roots refineries. The world's largest shipbreaking yard is in Gujarat near Bhavnagar at Alang. India’s only Liquid Chemical Port Terminal at Dahej, developed by Gujarat Chemical Port Terminal Co Ltd. Gujarat has two of the three Liquefied Natural Gas (LNG) terminals in the country (Dahej and Hazira). Two more LNG Terminals are proposed, at Pipavavand Mundra. Gujarat is the only state in India to have State Wide Gas Grid of 2,200 km. 87.9% of the total roads in the state are asphalt surfaced. 98.86% village connectivity with all‐weather roads, one of the highest in India. Nearly 100% of Gujarat's 18,000 villages have electricity connection for 24hr power through the Jyotigram Yojana. Gujarat ranks first nationwidein gas-based thermal electricity generation with national market share of over 8% and second nationwide in nuclear electricity generation with national market share of over 1%.Legatum Institute’s Global Prosperity Index 2012 has recognised Gujarat as the highest-scoring among all States of India on matters of social capital. The State ranks 15th in a list of 142 nations worldwide and actually ranks higher than several developed nations. Gujarat has largest OFC network of more than 50,000 km. The state owned Wide Area Network is the largest IP-based ICT network in Asia Pacific Region and second largest in the world, connecting 26 districts and 225 talukas through 12,000 nodes. There are more than 900,000 internet users and all villages are connected with broadband internet. The state registered 12.8% agriculture growth in the last five years against the national average of 2%.Gujarat records highest decadal agricultural growth rate of 10.97% Over 20% of the S&P CNX 500conglomerates have corporate offices in Gujarat.As per RBI report, in year 2006–07, 26% out of total bank finance in India was in Gujarat. In a July 2011 report, The Economist noted that Gujarat's infrastructure competes with Guangdong - the economic engine of China. With double digit growth rates, Gujarat continues to outpace growth in other Indian states. Beyond better road networks, The Economist article claims the state government of Gujarat has kept red tape to a minimum, does not ask for bribes, and does not interfere with entrepreneurial corporations. The state, the article claims has less onerous labour laws, reliable electricity and effective bureaucracy. This has led to a booming entrepreneurial economy in Gujarat.

Industrial growth

Gujarat's major cities include Ahmedabad, Surat, Vadodara, Rajkot, Jamnagar and Bhavnagar. In year 2010, Forbes list of world's fastest growing cities included Ahmedabad at number 3 after Chengdu and Chongqing from China. Surat is also one of the fastest growing city in India. Vadodara being the cultural city of Gujarat is fastly growing area wise and is industrialized to a large extent. It is the number 4th city in India in growing fastly. Major resources produced by the state include cotton, groundnut, dates, sugarcane, and petrochemical products. The state is rich in calcite, gypsum, manganese, lignite, bauxite, limestone, agate, feldspar and quartz sand, and successful mining of these minerals is done in their specified areas. Gujarat produces about 98% of India's required amount of Soda Ash and gives the country about 78% of its national requirement of salt. It is one of India's most prosperous states, having a per-capita GDP significantly above India's average. Kalol, Khambhat and Ankleshwar are today known for their oil and natural gas production. Dhuvaran has a thermal power station, which uses coal, oil and gas. Also, on the Gulf of Khambhat, 50 kilometres (31 mi) southeast of Bhavnagar, is the Alang Ship Recycling Yard (the world's largest). General Motors manufactures its cars at Halol near Vadodara, Tata manufactures Nano from Sanand near Ahmedabad and AMW trucks are made near Bhuj. Surat, a city by the Gulf of Khambhat, is a hub of the global diamond trade. In 2003, 92% of the world's diamonds were cut and polished in Surat.

Gujarat passed an act for the SIRs and set up the first such hub—Petroleum Chemical and Petrochemical Investment Region (PCPIR) spread across 453,000 square hectares—in Bharuch 2009. SIRs are special regions spread over a minimum 50,000 hectares where industries can buy lands directly from local owners. They are not offered concessions like tax benefits as in SEZs. However, the main benefit of SIRs is that they provide quality infrastructure and development even before units become operational. In every SIR, 55 per cent area is to be set aside for residential townships and other non-processing units.

During the period of 1960–90, Gujarat established itself as a leader in various industrial sectors including textiles, engineering, chemicals, petrochemicals, drugs and pharmaceuticals, dairy, cement and ceramics, and gems and jewellery, amongst others. A post-liberalization period saw Gujarat's State Domestic Product (SDP) rising at an average growth rate of 14% per annum in real terms (from 1994–2002). Gujarat achieved as much as 35% of augmentation in its power generation capacity during the periods 1995–96 and 2000–01. The producers (IPPs) have contributed significantly in this addition. Gujarat is one of the first few states in India to have encouraged private sector investment, some of which are already in operation. In addition, the liquid cargo (chemicals) handling port at Dahej is also set up in joint sector and made operational. At an investor's summit entitled "Vibrant Gujarat," arranged between 10 January 2007 to 13 January 2007, at Science City, Ahmedabad, the state government signed 104 Memoranda of Understandings for Special Economic Zones worth a total of 2.5 lakh crore. However, most of the investment was from domestic industry. In the fourth Vibrant Gujarat Global Investors' Summit held at Science City, Ahmedabad, in January 2009, there were 600 foreign delegates. In all, 8668 MOUs worth 12.5 lakh cr were signed, estimated to create 25 lakh new job opportunities in the state. In 2011, Vibrant Gujarat Global Investors' Summit MOUs worth 21 trillion (US$ 463 billion) were signed.

Gujarat is the only state with surplus electricity. Recently Gujarat Government has upgraded its installed capacity of 13,258 megawatts (MW) by adding another 3,488 MW. According to the official sources, against demand of 40,793 million units during the nine months since April 2010, Gujarat produced 43,848 million units. Gujarat sold surplus power to 12 States. The 12 states are Rajasthan, Tamil Nadu, Uttar Pradesh, Maharashtra, Andhra Pradesh, Delhi, Haryana, Karnataka, Chhattisgarh, Uttarakhand, Madhya Pradesh and West Bengal.

Gujarat invests in development of solar energy in the state. It has alloted 716 MW of Solar Power capacity to 34 national and international solar project developers in 2009; against the planned 500 MW capacity under its Solar Power Policy. This is expected to bring in investments of INR 12000 crore and generate employment for 5,000 people. As per a recent survey report of the Chandigarh Labour Bureau, Gujarat has the lowest unemloyment rate of 1 per cent against the national average of 3.8 per cent.

It also has the biggest industrial area for ceramic business in Morbi, Himatanagar, which produces around 80% of the country's gross ceramic production and around 80% of compact fluorescent lamp (CFL).Legatum Institute’s Global Prosperity Index 2012 has recognised Gujarat as the highest-scoring among all States of India on matters of social capital. The State ranks 15th in a list of 142 nations worldwide and actually ranks higher than several developed nations.