You are on page 1of 41

MAHARASHTRA STATE ANALYSIS

MAHARASHTRA
Live life Maharashtra !!!

A REPORT ON MAHARASHTRA

1
MAHARASHTRA STATE ANALYSIS

PROJECT PRESENTED
BY
NIKHIL SAYA
KHADER HUSSAIN
PAVAN KUMAR
ARUN KISHORE
NIKHILESH

UNDER THE GUIDANCE OF

Dr. E. MURALI DARSHAN

2
MAHARASHTRA STATE ANALYSIS

PREFACE
Maharashtra has been the Leader on Industrial front in India. It has always
been the endeavour to develop sustaining industrial growth, facilitate speedier
flow of investment by creating conducive industrial climate in the State.
Maharashtra has developed solid base for industrial infrastructure, strong
human resources and diverse industrial base. This was possible because of
several initiatives, since inception in diverse fields.

There are various aspects or rather plus points for Maharashtra which
has made the State to be a leader in most aspects especially in Sectors like
Agriculture, Tourism, Mining, Engineering goods and Gem and Jewellery etc.
Maharashtra is supposed to be the Largest economy in the country, with a high
per capita income .It has Most attractive investment destination in the country,
accounting for 40 per cent of its exports .Maharashtra is also the Most
industrialised state, with strong presence of petrochemicals, automobiles,
financial services, IT/ITES and textile industries. This has been possible
because of large network of professional education institutions, presence of
reputed R&D centres and also Superior infrastructure.
This is the reason why most of the states follow some initiatives formulated
by Maharashtra and thus it is said “Live Life Maharashtra Way !!! ..”

CONTENTS

3
MAHARASHTRA STATE ANALYSIS

FACTS 5

MAHARASHTRA OVERVIEW 6

STATE ECONOMY 8

AGRICULTURE AND ALLIED ACTIVITIES 12

TOURISM 19

MINING 24

ENGINEERING GOODS 26

PHARMACEUTICALS 32

MAHARASHTRA
4
MAHARASHTRA STATE ANALYSIS

Capital Mumbai

Area (Sq.km) 308,000

Population(Census 2001,milion) 96.9

Literacy rate(%) 79.1(2007-08)

Human Development Index 0.523(All India 4th rank)

NSDP Growth(2006-07 to 2007-08) 16.1 percent

NSDP rate at current prices in 2007-08 Rs 5,04,951 crore

Annual Per Capita income at

current prices in 2007-08 Rs 33283

National highways length (km) 4367

Total Roadways Length(km) 235595

Railways length (km) 5917

International Airports Mumbai, Nagpur, Pune

Domestic Airports Nasik, Nagpur, Pune, Mumbai, Jalgaon,

Aurangabad and 10 more

Key Industries Financial Services, Textiles, Auto-ancillaries,

Chemical and allied products, Electrical and

Non-electrical machinery, Petroleum and allied

products. Wine, Jewellery, Pharmaceuticals,

Engineering goods, Media & Entertainment etc.

Industries with Potential growth Leisure and Entertainment, Bio-technology and Tourism

MAHARASHTRA STATE OVERVIEW


Maharashtra occupies the western and central part of the country and has a long coastline stretching
nearly 720 kilometers along the Arabian Sea. The Sahyadri mountain range provides a physical backbone
to the State on the west, while the Satpuda hills along the north and Bhamragad-Chiroli-Gaikhuri ranges on

5
MAHARASHTRA STATE ANALYSIS

the east serve as its natural borders. Maharashtra is the second largest State in India both in terms of
population and geographical area spread over 3.08 lakh sq. km. The State has a population of around 10
crore (2001 Census) which is 9.4 per cent of the total population of India. The State is highly urbanized
with 42 per cent people residing in urban areas whereas at national level it was around 28 per cent.The sex
ratio of the State is 922 as against 933 for India.

The State has 35 districts which are divided into six revenue divisions viz. Konkan, Pune, Nashik,
Aurangabad, Amravati and Nagpur for administrative purposes. Maharashtra has a long tradition of having
very powerful bodies for planning at the district / local level. For local selfgovernance in rural areas, there
are 33 Zilla Parishads, 351 Panchayat Samitis and 27,920 Gram Panchayats. The urban areas are governed
through 22 Municipal Corporations, 222 Municipal Councils, 3 Nagar Panchayats and 7 Cantonment
Boards.

The Gross State Domestic Product (GSDP) at current prices for 2007-08 is estimated at Rs. 5,90,995 crore
and contributes about 13 per cent of the National Income. The GSDP has been growing at a rapid pace over
the last few years. The State boasts of a very vibrant industrial sector and a rapidly growing services sector.
Both these sectors presently contribute about 86 per cent of the state’s domestic product. The agriculture &
allied activities sector contributes just 14 per cent of the state’s income though about 55 per cent of the
population is dependent on income from this sector. Mumbai, the capital of Maharashtra and the financial
capital of India houses the headquarters of almost all major financial institutions, insurance companies and
mutual funds.

India's premier stock exchanges i.e. the Bombay Stock Exchange as well as the National Stock Exchange
and the Commodity Exchanges are located in Mumbai.

The State has 225.6 lakh hectares of land under cultivation where cereals, pulses and other major
foodgrains are grown. Forests cover another 52.1 lakh hectares. The extreme weather conditions, coupled
with low quality soils and rain fed cropping results in lower agriculture productivity. Number of irrigation
projects are being implemented to improve irrigation. A watershed mission has been launched to ensure
that soil and water conservation measures are
implemented speedily in the unirrigated area.

The State has made rapid strides in the production of commercial crops like sugarcane, Soyabean, cotton,
oilseeds and onions. The last few years have seen a healthy shift towards horticulture crops. The State is
well known for its Alphonso mangoes, grapes, bananas, pomegranates and oranges.

Animal husbandry is one of the important allied activity and has 24 per cent share in agriculture sector. The
State’s share of milk, livestock and poultry population in India is 7.7, 7.6 and 7.0 per cent respectively. The
long costal line is a boon to the State’s economy. The State contributes to 25 per cent in India’s total export
of fish The State has been recognised as the country's industrial powerhouse and maintains the position of
being the most industrialized state. The State is pioneer in SSI. The State continues to attract industrial
investment from both, domestic as well as foreign institutions. It has become a leading automobile

6
MAHARASHTRA STATE ANALYSIS

production hub and a major IT growth centre. It boasts of the largest number of special export promotion
zones being set up in the country. During the year 2007-08, about 27 percent of the exports from the
country are from the State.

The State is becoming one of the leading wine producing areas in the country. At present, 35 wineries are
functioning with an investment of Rs. 109 crore and export of 22.49 lakh litres of wine. The State has given
importance to primary education, which has resulted in consistent improvement in literacy rate. The
literacy rate of the State is 77.6 per cent as against 65 per cent at national level during 2001, which
increased to 79 per cent during 2007-08. Maharashtra is a pioneering state for female education in the
country and during the same period the female literacy rate increased from 67 per cent to 71 per cent. The
State has excellent higher educational institutions in the fields of engineering, medical and management.
The State has well spread road network of 2,35,595 km. road length. All weather roads connect about 97
per cent villages. It has surface transport among the best and good connectivity via major sea ports and
airports. It has highest installed capacity and generation of electricity in the country. All this has made this
state a favoured destination for investment. The State is well known for its administrative acumen and
innovative ideas. The State is first to implement woman’s policy and engendering the budget by
establishing separate Woman and Child Development Department. It is pioneer in implementing its
‘Employment Guarantee Scheme’ and is replicated by the Government of India. Maharashtra is not just a
geographical expression but an entity built on collective efforts of its people. Natural as well as cultural
diversities have helped in the development of a unique Marathi culture. It has its own spiritual dimensions
and known as Land of Saints. Saints of that time helped the cultural awakening of the region along with
their spiritual contribution. Monuments such as Ajanta and Ellora, Gateway of India and Elephanta caves
and architectural structures like Viharas and Chaityas have attracted people from all over to the world.
Besides the wonderful monuments, segment mix of population and its cultural aspects makes it intra-
national. It has produced many important personalities covering almost every aspect of human
development. People in the State have excelled in sports, arts and literature. The world famous film
industry, popularly called “Bollywood” is located in the State.

STATE ECONOMY

The year 2008-09 witnessed a heavy turmoil in the global economy, which had an
impact on the Indian as well as the State economy. The advance estimate released
by Central Statistical Organisation (CSO) indicates that the Gross Domestic Product
(GDP) is expected to grow at 7.1 per cent during 2008-09 as against 9.0 per cent
during 2007-08.

7
MAHARASHTRA STATE ANALYSIS

The advance estimate of Gross State Domestic Product (GSDP) is expected to grow
at 6.7 per cent during the year 2008-09 as against 9.2 per cent during the previous
year. The lower growth projection is due to an expected fall in growth rate of industry
to 4.8 per cent during 2008-09 as against 8.0 per cent during the previous year.
Insufficient and an uneven rainfall had an adverse impact on agriculture & allied
activities which will result in a negative growth of 7.1 per cent during 2008-09 as
against 10.4 per cent in the earlier year. However, the services is expected to
maintain the growth momentum and is likely to grow by 10.5 per cent during the
year, thus cushioning the effect of downfall in the economy.

The preliminary estimate of GSDP at constant (1999-2000) prices was Rs. 4,16,248
crores during 2007-08, as against Rs. 3,81,247 crore in 2006-07, showing an increase
of 9.2 percent. The GSDP during 2007-08 at current prices was Rs. 5,90,995 crore,
showing an increase of 16.1 per cent over that of the previous year.

The preliminary estimate of the State Income i.e. Net State Domestic Product (NSDP)
at current prices is estimated at Rs. 5,04,951 crore in 2007-08, higher by 16.1 per
cent over the previous year. The per capita State Income at current prices is
estimated at Rs. 47,051 in the year 2007-08, as against Rs. 41,144 during 2006-07.

The per capita National Income at current prices was Rs. 33,283 in 2007-08, as
against Rs. 29,524 during previous year. The per capita State Income is higher than
the National Income and the State ranks second after Haryana among the major
states in India.

The average Wholesale Price Index (WPI) for 2008-09 was higher by 8.4 per cent
over the previous year. The WPI was the highest in September, 2008, when the
inflation rate was 12.3 per cent.

The Consumer Price Index (CPI) for rural and urban areas of the State also revealed
similar trend as that of WPI. CPI for rural areas was 13.3 per cent higher than that for
the previous year whereas in urban areas, it was higher by 12.8 per cent.

In recent years, the state finances have witnessed significant improvements due to
consistent and cohesive measures undertaken by the State Government. This
included the implementation of Value Added Tax (VAT), enactment of the Fiscal
Responsibility and Budgetary Management (FRBM) Act, increase in plan expenditure,
reduction in non-development expenditure, etc. The fiscal deficit, which was highest
during 2002-03 at 5.8 per cent of the GSDP, has drastically declined to 2.6 per cent in
2006-07 and it is expected to decline further to 2.1 percent during 2008-09.

The revenue receipts of the State Government are expected to be Rs. 79,911 crore
during 2008-09 as against Rs. 79,860 crore during 2007-08. The tax revenue of the

8
MAHARASHTRA STATE ANALYSIS

State is expected to be Rs. 60,839 crore in which State’s own tax revenue is Rs.
51,893 crore (85 per cent). The non-tax revenue is expected to be Rs. 19,072 crore.

The revenue expenditure of the State Government during 2008-09 is expected to be


Rs. 78,946 crore, higher by 19 per cent over the previous year, of which interest
payment is Rs. 12,953 crore (16.4 per cent). The total outstanding debt during 2008-
09 is expected to be Rs. 1,58,520 crore (25.8 percent of the GSDP).

The State ranks first in India in respect of both the aggregate bank deposits (Rs.
8,52,771 crore) and gross credits (Rs. 8,34,701 crore) as on the last Friday of
September, 2008.

Self Help Group (SHG) bank linkage programme was initiated to improve credit
delivery mechanism to the underserved and unserved rural poor, who had been so
far bypassed by the
banking system. The amount deposited by 3.80 lakh SHGs was Rs. 267 crore as on
31st March,2008, whereas during 2007-08, the credit disbursed to 0.75 lakh SHGs was
Rs. 325 crore. The outstanding credit with 4.10 lakh SHGs was Rs. 1,021 crore as on
31st March, 2008.

The State received 91 per cent of the normal rainfall during 2008. However, the
intensity of rainfall was not sufficient in some parts of the State during sowing period
which has resulted in lower production of kharif crops. Moreover, insufficient moisture
caused fall in production of rabi crops.

The foodgrains production for kharif and rabi season in the State is estimated to be
117.19 lakh M.T. as a preliminary forecast, less by 24 per cent compared to that of
the previous year. A steep fall of 49 per cent is expected in production of oilseeds.
Sugarcane production is also
expected to be much lower by 43 per cent (at 508.13 lakh M.T.) mainly due to
reduction of 30 percent in the harvested area.

To reduce the agricultural debt burden of the farmers, the Government of India (GoI)
has aken an initiative through the ‘Agricultural loan exemption & loan rebate scheme
2008’. Under this scheme, 100 per cent loan of small and marginal farmers having
land upto 2 ha. and loan amount upto Rs. 20,000 or 25 per cent of loan, whichever is
higher, of farmers having land more than 2 ha. is waived. Under this scheme, 38 lakh
farmers are expected to get benefit and loan to the extent of Rs. 7,872 crore is
expected to be waived. To assist the farmers not covered under the above scheme,
the State Government has implemented ‘Agricultural loan exemption and loan
repayment exemption scheme 2009’, under which 40.15 lakh farmers are expected
to be benefited with a total estimated amount of Rs. 6,208 crore.

The agricultural credit for seasonal agricultural operations is made available through
the Primary Agricultural Credit Societies (PACS) under the co-operative network as
well as the Commercial Banks and Regional Rural Banks (RRBs). The aggregate loans

9
MAHARASHTRA STATE ANALYSIS

advanced for seasonal agricultural operations in the State during 2007-08, was Rs.
9,299 crore, of which the loans through PACS were Rs. 5,828 crore (63 per cent),
through Commercial Banks were Rs. 3,172 crore (34 percent) and through RRBs were
Rs. 299 crore (3 per cent).

The milk production in the State during 2007-08 was estimated to be 72.1 lakh M.T.,
which registered a rise of 3.3 per cent over the previous year. The average daily
collection of milk by the Government and co-operative dairies (excluding Greater
Mumbai) was 41.3 lakh litres upto December, 2008 which was 38.6 lakh litres during
2007-08. The estimated marine and inland fish production in the State was 3.6 lakh
M.T. and 1.0 lakh M.T. respectively by the end of December, 2008 as against 3.3 lakh
M.T. and 1.1 lakh M.T. respectively by the end of December, 2007.

Total 14,957 industrial projects with an investment of Rs. 5,04,689 crore and
employment potential of about 27.54 lakh have been registered with the GoI to set
up units in the State till the end of December, 2008. Out of these, 6,778 projects with
an investment of Rs. 1,10,149 crore have already started their production and
employment of about 6.93 lakh has been generated. The compounded annual growth
rate (CAGR) for the last five years for investments in registered and commissioned
projects is 16.1 and 2.6 per cent respectively.

Under Foreign Direct Investment (FDI), 4,041 projects with an investment of Rs.
75,096 crore have been approved by the GoI for setting up industries in the State by
the end of March,2008. Of these, 1,659 projects with an investment of Rs. 39,291
crore were commissioned.

The total available installed capacity of electricity in the State at the end of March,
2008 was 21,654 MW as against 17,984 MW at the end of March, 2007. During 2008-
09, the generation of electricity in the State upto the end of November, 2008 was
51,465 million KWH, higher by 6.0 per cent than that in the corresponding period of
2007-08. The State is facing a power deficit of about 4,500 MW. The transmission
losses of MAHATRANSCO were 5.0 per cent and the distribution losses of
MAHADISCOM were 24.1 per cent during 2007-08.

The total road length in the State was 2.36 lakh km. at the end of March, 2008 out of
which the village road length was 1.02 lakh km. So far, 96.8 per cent villages were
connected by all-weather roads, 2.4 per cent villages were connected by fair weather
roads and remaining 0.8 percent villages (334) did not have road connectivity as on
31st March, 2008.

An ambitious project for setting up a world class Multi-modal International Hub


Airport at Nagpur (MIHAN) is being developed by Maharashtra Airport Development
Company Ltd. (MADC), the State owned company. The project covers development of
existing domestic airport at Nagpur as an international Passenger and Cargo Hub
Airport, along with a huge Special Economic Zone (SEZ) and with overall world class

10
MAHARASHTRA STATE ANALYSIS

facilities such as road infrastructure, separate road and rail terminal that will handle
14 million passenger traffic and an estimated 8.7 lakh tonnes of cargo per year. The
unique feature of this project is ‘Maintenance Repair Overhaul (MRO)’ base for
comprehensive maintenance of aircraft, the first independent MRO in India.

According to Population Census 2001, literacy rate in the State was 76.9 per cent. It
was 86.0 per cent and 67.0 per cent for males and females respectively. The results
of NSS 64th round(July, 2007 to June, 2008), shows the literacy rate of the State was
improved to 79.1 per cent and that for males and females were improved to 86.6 per
cent and 71.0 per cent respectively. The sharp increase in female literacy rate,
reducing gender gap in literacy, is a heartening feature of the State.

To encourage participation in education, various incentives are offered by the


Government including fee concessions. The results of NSS 64th round, focused on
participation in education, reveal that number of ST students availing these facilities
are above 86 per cent. Sarva Shiksha Abhiyan (SSA) is successfully implemented in
the State. A major achievement of SSA is successful reduction in dropout rate from
15 to 10 at primary stage and from 24 to 19 at upper primary stage during 2002-03
to 2007-08.

Sample Registration Scheme (SRS) shows improvement in the demographic


indicators of the State. Birth rate (18.1), death rate (6.6) and infant mortality rate
(34) in the year 2007 have declined from 18.5, 6.7 and 35 respectively in the year
2006.

The number of beneficiaries being covered under Supplementary Nutrition


Programme (SNP) in rural and urban areas is increasing and percentage of children
under various grades of malnutrition is decreasing. Percentage of normal children in
tribal areas increased from 42.4 in 2006-07 to 49.9 in 2008-09 along with decrease in
percentage of children in grade I to IV significantly, in the respective period.

The average daily factory employment in the State for the year 2007 was 13.8 lakh
as against 12.8 lakh for 2006.

The estimated employment in the State, based on National Sample Survey, which
was on rise till 2004-05 at 4.3 crore, declined to 4.1 crore in 2007-08 clearly
indicating the footprints of recession.

The employment provided under National Rural Employment Guarantee


Scheme(NREGS) during 2008-09 was 4.2 crore persondays as against 6.0 crore
person days provided under Employment Guarantee Scheme (EGS) and NREGS
during 2007-08.

The poverty estimate provided by the Planning Commission of India, reveal that the
poverty ratio in the State during 2004-05 is 30.7 per cent as against All-India average
of 27.5 percent. Though the results at various points of time show decline in poverty

11
MAHARASHTRA STATE ANALYSIS

ratios, the number of persons living below poverty line is gradually increasing since
1973-74 and increased by 12.2 lakh persons in 2004-05 as compared to 1993-94.

AGRICULTURE AND ALLIED ACTIVITIES

The total foodgrains production for kharif & rabi season in the State during the year 2008-09 is expected to
be 11.7 million tonnes as against 15.4 million tonnes during 2007-08. At All-India level total foodgrains
production was 219.3 million tonnes during 2007-08. The share of agriculture & allied activities in the
GSDP during 2008-09 was 12.1 per cent and its share at the national level was 17.6 per cent. The share of
agriculture & allied activities in GSDP is continuously decreasing from 22.1 per cent in 1980-81 to 12.1 per
cent in 2008-09. However, agriculture remains most vital sector of economy as almost 55 per cent of the
population in the State depends upon it for their livelihood.

Growth of agriculture sector is important for food security, rural employment and improving rural
standards of living. The growth in agriculture largely depends upon the efforts made towards increasing the
agricultural productivity by ensuring high quality inputs and use of modern and more advanced technology.
In this endeavor, both the Central and State governments are playing a pivotal role in mobilizing resources,
creating infrastructure, facilitating easy availability of inputs, supporting research and technology
development, institutional support services and putting in place contingency measures to safeguard the
crops from the adverse effects of natural calamities.

The productivity of important crops in the State is relatively low as compared to the productivity in
other parts of the country. Productivity of crops (kg per ha.) for principal crops viz. rice, wheat, jowar,
bajra and cotton during 2005-06 was 1,781, 1,393, 783, 650 and 187 kg per ha. as against 2,102, 2,619,
880, 802 and 362 kg per ha. respectively at All-India level.
12
MAHARASHTRA STATE ANALYSIS

Agricultural Production Prospects 2008-09

About 30 per cent sowing was completed in June 2008, 77 per cent by the end of July, 2008 and
100 per cent i.e. 134.04 lakh ha. by the end of kharif season. The areas under sunflower & soyabean
increased by one per cent and 16 per cent respectively, while areas under maize, cotton and sugercane
decreased by three per cent, two per cent and 30 per cent respectively. According to the preliminary
forecast by the Commissionerate of Agriculture, Pune, total foodgrains production(kharif + rabi) in the
State during 2008-09 is expected to be 117.19 lakh M.T., 24 per cent lower than the production of the
previous year i.e. 153.66 lakh M.T. The details of the forecast of production of foodgrains and oilseeds are
given in Table 1.1

Table 1.1 Estimates of food grains and oilseed productions

Crop 2007-08 2008-09 Percentage

(Final forecast) (Tentative) change

(lakh M.T) (lakh M.T)

Cereals 123.42 98.63 (-)21

Pulses 30.24 18.56 (-)39

Total food grains(kharif+ 153.66 117.19 (-)24


rabi)

Oilseeds 47.61 24.33 (-)49

Cotton 70.15 52.02 (-)26

Sugarcane(in lakh bales of 884.37 508.13 (-)43


170 kg each)

Source: Department of Agriculture

During the year 2008-09, the area under foodgrains reduced by 20 per cent resulting in reduction of
crop production by 31 per cent in total kharif foodgrains production. This fall was mainly in kharif jowar,
bajra and all pulses. Fall in area and production was also observed in cotton (lint) and sugarcane and fall in
production of oilseeds was seen. Below average rains during June & July 2008 has adversely affected
growth of kharif crops. Delayed sowing of bajra, soyabean and heavy infestation of tobacco leaf eating
catter piller on soyabean has affected their growth. Insufficient rains in eastern Vidarbha during September,
13
MAHARASHTRA STATE ANALYSIS

2008 have affected production of rice. During the year 2008-09, the area for rabi crops reduced by four per
cent resulting in reduction of crop production by 13 per cent in this season. This fall was observed mainly
in wheat, gram, all pulses and oilseeds due to less moisture in soil and adverse climatic conditions.

The index number of agricultural production for the State (Base: Triennial average 1979-82=100)
for 2007-08 was 234.0, more by 31 per cent than that in 2006-07. The group wise indices for 2007-08 for
cereals were 137.0, for pulses 303.9, for foodgrains 170.1, for oilseeds 94.9, for fibre 479.1, for
miscellaneous 312.0 and for total non-foodgrains it was 305.1. It may be noted that the Compound Annual
Growth Rate (CAGR) of agriculture production during last eight years (2000-01 to 2008-09) works out to
only 1.8 per cent.

The gross cropped area in the State has increased by about 20 per cent from 188.2 lakh. in 1960-61
to 225.6 lakh ha. in 2006-07. The agricultural productivity has not increased much despite concerted efforts
and large scale spending on soil conservation and watershed development works. The per ha. yield (958
kg.) of the State in respect of foodgrains for 2006-07 was far below the national average (1,756 kg.). It is,
therefore, needed to focus on increasing the production and productivity of the foodgrains and also to
ensure sustainable growth of agriculture sector.

LAND UTILISATION

As per the land utilisation statistics for the year 2006-07, out of the total 307.6 lakh ha.geographical area of
the State, the gross cropped area was 225.6 lakh ha., net area sown was 174.8 lakh ha. (56.8 per cent), area
under forest was 52.1 lakh ha. (16.9 per cent), land not available for cultivation was 31.3 lakh ha. (10.1 per
cent), other uncultivated land was 24.2 lakh ha. (7.9 percent) and fallow land was 25.2 lakh ha. (8.3 per
cent). During the period of last five years i.e. from 2001-02 to 2005-06 land put to non-agricultural usage
increased by 2.4 per cent, while net area sown decreased nearly by one per cent.

14
MAHARASHTRA STATE ANALYSIS

Graph showing Percentage distribution of land utilisation (2005-06) in State

A GLOBAL PERSPECTIVE ON AGRICULTURE


Agriculture plays a multifunctional role with every 1% rise in agricultural productivity cutting poverty by
an estimated 0.6%. Notwithstanding this, world agriculture exports have not kept pace with the growth in
exports of either manufactured products or mining products. Although world agricultural exports picked up
in 2005 growing by 8.1% in value terms, they totaled only US$ 852 bn. Over the years, the growth in
agricultural trade has been less strong than total merchandise trade, thereby resulting in its share decreasing
from 12.6% in 1990 to only 8.6% in 2005. As against this, exports of manufactures have more than trebled
from US$ 2.4 trillion in 1990 to US$ 7.3 trillion in 2005. Similar increase can be seen in the case of mining
exports, which have risen from US$ 488 billion to US$ 1748 billion during the same period.

15
MAHARASHTRA STATE ANALYSIS

Source: WTO Online Statistical database

Agriculture forms the backbone of the India economy contributing more than one-fifth to the GDP and
providing livelihood support to about two-thirds of country’s population. In fact, it is the single largest
private sector occupation. Any change in the agriculture sector has a strong multiplier effect on the entire
economy. The multiplier for food industry is much higher than that for industries such as power and
telecom, reason being that the food industry directly and indirectly triggers growth in a number of other
industries such as transport, refrigeration, pesticides and fertilizers.

The most significant positive aspect of our agricultural exports is that a majority of the items in the
agriculture export basket are net foreign exchange earners, with negligible import content unlike high
import content in many manufactured products. Export of agriculture products increased from US$ 6.0 bn
in 2000-01 to US$ 11.2 bn in 2006-07.

However, the share of agriculture and allied products in total exports has come down from 13.6% to 8.9%
during the same period. During the period 2000-01 to 2006-07, India’s overall exports grew faster than
agro exports. The difference has always been substantial except in 2001-02 where both experienced
negative growths.

16
MAHARASHTRA STATE ANALYSIS

India’s Agri Exports:

Source :CMIE India Trade Database

India’s major agro exports (apart from marine products) include rice, oil meals, cashew, spices, tea, and
wheat. The non-traditional exports include horticulture and floriculture products such as vegetables, fruits
and their processed products. Star performers have in fact been the traditional agro exports like basmati
rice, oil meals and castor oil. To be precise, share of oil meals in India’s agriculture exports jumped to 8.6%
in 2004-05 from 4.6% during 2001-02. Share of basmati rice also shot up from 6.3% to 7.6% during the
same period. This was due to a significant average growth rates experienced over the last three years of
62% and 22%, respectively. This trend clearly reflects increasing importance of traditional agro exports,
necessitating the need to diversify into non-traditional export products.

In terms of production, India, with an arable land of 162 mn ha remains a major player in the global market.
India, with a production of 47 mmt of fruits and 80 mmt of vegetables, is the second largest producer of
fruits and vegetables after China. In fact, the country ranks first in the production of banana and mangoes
and second in eggplants. However, processing of fruits and vegetables is estimated at only 2% of total
production. India’s agro exports have not been commensurate with its production. The fruits and vegetable
sector has not leveraged on the export market as a proactive source of revenue. This clearly calls for a
strategy that focuses on the international market, not as a residual but as a prospective source of revenues.

17
MAHARASHTRA STATE ANALYSIS

POMOGRANATE –POTENTIAL EXPORT ITEM


Although India is the 2nd largest producer of fruits in the world and first in Pomegranate production with
the total Pomegranate production in the world is 10 lakh tonnes out of which India produces 5 lakh tonnes
but exports only 5000 tonnes, whereas Spain produces 1 lakh tonne and export 75,000 tonnes annually.
Pomegranate is a high value crop and its entire tree is of great economic importance. Apart from its demand
for fresh fruits and juice, the processed products like wine and candy are also gaining importance in world
trade. Pomegranate is an important fruit crop of Maharashtra. It is cultivated in an area of 43,151 ha with a
total production of 4, 31,510 tonnes producing about 85% of the total Indian production, thereby leading in
Pomegranate production in the country. Within Maharashtra, production of Pomegranate is mainly
concentrated in the Western Maharashtra region and the Marathwada region. The variety Ganesh, Bhagwa
(Red Ruby) cultivated in Maharashtra is suitable for export purposes. At present fair amounts of exports of
Pomegranate takes place from the state in Reefer containers by sea.

Pomegranate requires Good Agricultural Practices, Euregap Certification, Awareness among exporters for
Export procedures, HACCP/ISO Certification etc and disease and pest management as per the
recommended schedules by NRC Pomegranate, Sholapur will expedite the economical condition of the
poor farmers and increase the pomegranate export from our country.

Pomegranate – A Global Scenario


The cultivation of pomegranate was introduced quite early in the Mediterranean and eastern countries like
India. But in Spain, it was introduced after the Islamic influence there and it reached England in the
thirteenth century. Much later, Spaniards took this important plant to the new world-Mexico and Florida.
Its cultivation gradually spread to other countries too and now it is grown almost everywhere in the tropical
and subtropical climate.

At the global level, Iran is the world's largest producer and exporter of pomegranates with an estimated
annual production of 670,000 tons, In addition to Iran, other countries including India, Turkey, Spain,
Tunisia, Morocco, Afghanistan, China, Greece, Japan, France, Armenia, Cyprus, Egypt, Italy and Palestine
also cultivate this product. Pomegranate is native to Iran, although its wild forms are found in India,
Afghanistan and Syria. Presently good quality pomegranate comes from Turkey, Iran, Afghanistan, Syria,
Morocco and Spain. In India, Sholapur is famous for juicy pomegranate fruit known as Anar. In Turkey
pomegranates are served during important feasts.

The global figure for trade in pomegranate can at best only be estimated, considering that the data for
disaggregated level through UNCTAD’s COMTRADE and PC TAS database (only sources of reliable data
on international trade) is available at HS 6 digit level. Pomegranate comes at the 8 digit HS level under the
6 digit HS code 081090 (Other fresh fruits nec). Global exports under this 6 digit level amounted to US$
751.4 mn in 2005-06 as against US$ 558.6 mn in 2003-04. Assuming that 25% of exports under this
category comprises pomegranate, one can work out a rough estimate of global exports of pomegranate at
US$ 188 mn in 2005-06. The main exporters under this category include Thailand, Spain, the Netherlands,
Hong Kong and France.
18
MAHARASHTRA STATE ANALYSIS

2002-2003(US$ 3bn) 2003-2004(US$ 12 bn)

POMOGRANATE EXPORTS DURING 2002-03 AND 2003-04

As against this, India’s exports of fresh pomegranates amounted to US$ 12.8 mn in 2005-06, up from US$
3.0 mn in 2002-03, thereby registering an impressive compound annualgrowth rate of 62.8%. The major
export destination for India’s pomegranates are UAE, the Netherlands, UK, Belgium and Saudi Arabia. As
is evident from the above exhibit, during the period between 2002 and 2006, the export destinations for
pomegranates has more or less remained same except for the shares of Netherlands and Belgium, which
have become important destinations for the country’s pomegranate exports. Further, the country’s
dependence on UAE as the largest destination has reduced. Thus, India’s share in global exports of
pomegranates is about 6.4%, although the country is the largest producer of pomegranates. This clearly
calls for making the product more export oriented, particularly in light of the fact that per unit realization in
international markets is far higher than the domestic market.

19
MAHARASHTRA STATE ANALYSIS

TOURISM

Tourism, from the ancient times has fascinated mankind and is now perceived as an integral part in the
modern day social life. The tourism phenomenon has attracted almost the entire world. Speedy
development in means of transport and communication has made distant places on this earth practically
accessible to wider segments of the population around the globe. It provides an opportunity to millions to
enjoy the prospect from moving from one continent to another in a matter of hours.

All modern countries have progressed towards life styles, which favour the growth and development of
tourism. Along with industrialization and rapid advancement in technology, Tourism industry has also
grown rapidly throughout the world. Since mid 60’s international tourism has become the number one item
of international trade.

Globally, tourism accounts for 11 % of the global Gross Domestic Product (GDP) and 5.3 % of India’s
GDP1. One of the major reasons for the growth in the tourism sector is the overall economic development
in the country.

Growth in GDP and Tourism in India (GDP at 1993-94 prices)

DOMESTIC AND FOREIGN TOURISTS VISITS 2001-2003

From the above data it can be said that growth in GDP and Forex earnings through tourism go hand in hand
and that the increase in Forex earnings through tourism results in increase in GDP. It also implies that
economic development of a region is directly proportional to the growth of tourism in that region. In
developed as well as in developing economies all over the world specially the European and South-East
Asian countries, rapid economic development could take place because of foreign tourists inflow which

20
MAHARASHTRA STATE ANALYSIS

increased continuously. Promotion of tourism thus offers a key to economic growth. The GOI and many
state governments have therefore initiated vigorous efforts at promoting tourism. The government of
Maharashtra has also tried to promote tourism in the state through the MTDC. Maharashtra, literally means,
the Great Nation. As the name itself suggest Maharashtra has a great diversity of riches to offer to the
tourists in western India. The state encompasses an area of 3,07,762 Sq. km and occupies 9.36 % of total
area of land of India2. It is the third largest state in India after Rajasthan and Madhya Pradesh and has 35
districts.

Maharashtra’s socio-economic profile in general and its economy in particular have undergone enormous
changes. It presently accounts for about 13 % of the National GDP. Its per capita income is more than the
national per capita income. It has a per capita income that is about 39 per cent higher than the country’s.
The State of Maharashtra has the largest economy in the country. Its Gross Domestic Product (GSDP) at
current prices stood at Rs.3,71,877 crore in the year 2004-054. Apart from material prosperity, the state has
a rich cultural heritage and geographical diversity to attract tourists. Maharashtra has 720 kms. stretch of
long coastline with Arabian sea. About 80 % of India’s cave temples are located in Maharashtra. 70% of
these temples i.e., more than a thousand monuments were created as early as 250 B.C. and 300 A.D.

Therefore, any tourist has a spectacular set of options not just Super beaches - Cool hill stations –Hot spas–
Holy shrines –Wild life parks- but also Philosophy, Culture, Craft, Music, Dance and Drama, Heritage
sites, Architecture, Healing techniques etc. Thus the overall atmosphere is conducive for the tourism
development..The Maharashtra Tourism Development Corporation Limited (MTDC) was incorporated in
1975 under the provisions of The Companies Act 1956 with a view to promoting and developing tourism in
state of Maharashtra5. However, it is worth understanding that the issue of promoting tourism is linked to
the issue of tourist satisfaction.

ARTS AND CRAFTS


The growth of crafts in society is a sign of the cultivation of sensitivity and the stirring and mellowing of
humanism. It stands for man's endeavour to bring grace and elegance into an otherwise harsh and drab
human existence. Actually, man's elevation from gross animal existence is marked by his yearning for
something beyond the satisfaction of mere needs and creature comforts. It is the yearning that found natural
expression in crafts.

This tradition of carved wooden frames and carved wooden balconies supported by brackets of animals,
birds, and human forms is a part of architectural design of homes, palaces and temples as well as other
community places built all over India

Since our contemporary architecture is totally changed and has no place for any carvings or others crafts,
the craft of wood carving gradually disappeared and with that vanished all our craftsmen.

George C. M. Birdwood published his book, 'The Arts of India' in 1880, in which he had given plenty of
information about, the then prevailing crafts in Maharashtra. Several crafts mentioned by him are not being
executed today. But some major which have survived or have been revived and handed down to the present
generation of craftsmen were also going through a difficult period due to lack of patronage, because under
the British rule, the lifestyle of patrons of arts and crafts was also undergoing a great change.

A good deal of inlay work was being conducted in Bombay in the latter part of the 19th Century. This inlay
was made up of tin wire, sandal-wood, ebony, sappan (Brazil) wood, ivory, white, and stained green and

21
MAHARASHTRA STATE ANALYSIS

stag horn. "Bombay inlaid work" was familiar for ornamental furniture such as book-stands, work-boxes,
blotting- cases, ubiquitous glove, boxes and card cases, which go by the name of "Bombay boxes".

Crafts of Maharashtra Metal work in copper, brass and other alloy was being conducted in several places in
Maharashtra for centuries. Old records reveal that there was a large manufacture of idols in all the metals at
Nasik & Pune. Good brass utensils were also made at Kelshi and at Begmandli in the Ratnagiri
Collectorate. Bombay Copper Bazaar was also equally known as recorded by Birdwood. He had observed
that: "The most active industry in the town of Bombay is the manufacture of brass and copper pots and
other utensils in universal use among natives of India. The Cooper Bazaar opposite Mombadevi Tank is the
busiest and the noisiest, and one, of the most delightful streets in all the native town. Mr. Terry states
(Maclean's Guide to Bombay) that, there are 1,069 coppersmiths, and 1,536 blacksmiths in Bombay.”

Mashru is a mixed variety of striped cotton and silk weave. It was generally used by the ladies as an
undergarment. The basic warp is of silk and the weft is of various colored cottons. The term mashru is
derived from share, meaning "legal". The weaving of pure silk fabrics at prayers was prohibited among the
Muslims and hence this pattern was introduced. Paithan and Aurangabad were the famous centres of
mashru production. Himroo is a similar variety of mixed silk and cotton but with a texture that is almost as
fine as muslin. It is used as veils, head-dresses, bridal robes and saris. It is costlier than mashru. Paithani is
the most costly high quality silken gold embroidered textile which has an interesting history. Paithani is
called as Mahavsatra.

FORTS
Standing as silent sentinels to history are the 350-odd forts of Maharashtra. Beaten by the sea waves, lashed
at by the torrential Deccan rains, or scorched in the blazing sun, stand imposing ramparts and crumbling
walls. The last lingering memories of Maharashtra's martial times. Nowhere in the country would you
encounter such a profusion of forts. And such variety Sited on an island, as at Murud-Janjira or guarding
the seas as at Bassein, or among the Sahyadri hills, as at Raigad, whose zig-zag walls and rounded bastions
sit like a sceptre and crown amidst hills turned mauve. Most of the forts in Maharashtra whether up in the
hills or near the seas are associated with Shivaji --the great Maratha warrior and an equally great fort
builder. Moreover, these forts were treated as mini-cities, such as Panhala, which is now a hill station. The
concept of the fort-city was, however, not peculiar to Shivaji alone. The Portuguese who came to India as
traders and missionaries, built within a century of their coming, Bassein, a garden city to rival many a
European capital. Today, these forts numbed by sun and sleet, have not only been witness to changing
times, but have also shaped them and within their walls throb the heart-beat of history. Maratha Forts
Beyond the walls.

22
MAHARASHTRA STATE ANALYSIS

CAVES
Dating back to the 2nd BC and artistically built over a few centuries, the Caves of Maharashtra have an
extraordinary appeal and aura. Nestled in the formidable Sahayadri Mountain Range, these caves have been
home to monks of different religions.

Be it the paintings in the Ajanta caves or the sculpture of the Ellora caves, or the divine presence in the
Elephanta caves, the visitors have always and will always continue to be spellbound. These caves offer a
visit that is truly unforgettable. A visit that will induce a sense of discovery, a discovery of the self, and of
the divine.

TOTAL NO: OF VISITORS TO CENTRALLY PROTECTED MONUMENTS

23
MAHARASHTRA STATE ANALYSIS

24
MAHARASHTRA STATE ANALYSIS

THE HOLY CITY NANDED


"The Lord has sent me into world for the purpose of spreading Dharma (Righteousness) every where and to destroy
the evil doers root and branch. Know ye holy men! I have come solely for the purpose of establishing Dharma,
protecting the Saints and completely uprooting the wicked men." History of Nanded Nanded is one of the historical
places in Marathwada region of Maharashtra State. It is situated on the north bank of Godavari River. It is famous for
Sikh Gurudwaras. Nanded is a town of great antiquity. It is said that during the Puranic days, Pandavas traveled
through Nanded district. Nandas ruled over Nanded through generations. In 1708, Guru Govind Singh the tenth
spiritual leader of the Sikhs came over to Nanded, his permanent abode. It was he who preached amongst the Sikhs
that there need not be any spiritual leader for them and they should take Granth Sahib as their leader. A monument
has been constructed at the place where he breathed his last. A Gurudwara has also been constructed there. It is
known as Shri Huzur Abchalnagar Sachkhand Gurudwara.

MINING IN MAHARASHTRA
The potential mineral bearing area of the State is about 58 thousand sq. km. Among the major minerals
found in the State. The production of coal during 2009-10 was 28.8 million tonnes, 3.8 per cent more than
that during the previous year. During the same period, the production of manganese ore increased by 2.3
per cent to 3.6 lakh tonnes.The value of minerals extracted in the State during 2009-10 was about Rs.
2,143 crore, in which share of coal was about 94 per cent (Rs. 2,018 crore). Maharashtra State Mining
Corporation Ltd.(MSMC) is a limited company fully owned by the Government of Maharashtra
incorporated under Companies Act, 1956 on 14th November, 1973 with the main objects. Now a step
towards expansion of the on-going projects, opening new mines and diversification to mineral based
industries.

Minerals in Maharashtra

25
MAHARASHTRA STATE ANALYSIS

Sr. No District Minerals


Manganese, Coal, Dolomite, White clay/yellow ochre/Red ochre, Sand
01 Nagpur
(stowing), Quartz Quartzite.
Coal, Iron ore, Limestone, Dolomite, White clay/Yellow ochre, Sand
02 Chandrapur
(stowing), Shale, Fluorite.
03 Gadchiroli Iron ore.
Manganese, Iron ore, Chromites,
04 Bhandara
Kainite/Sillimanite/Pyrophyllite/Corundum, Quartz Quartzite, Sand.
05 Gondia Quartz and vanadiferous iron ore.
06 Yavatmal Coal, Limestone, Dolomite, Sand ( stowing).
07 Amravati Fire clay.
Iron ore, Bauxite, Silica sand, Dolomite, China clay, fire clay, Feldspar,
08 Sindhudurg
Graphite.
09 Ratnagiri Bauxite, Silica sand.
10 Kolhapur Iron ore, Bauxite
11 Raigad Bauxite
12 Satara Bauxite
13 Thane Bauxite

MINERAL RESERVES IN MAHARASHTRA


Total Reserves ( in
Sr.No Mineral District
Million Tonnes)
01 Coal Chandrapur 2904.674
02 Limestone Chandrapur 750.325
03 Manganese Ore Bhandara 11.464
04 Iron Ore Bhandara 4.65
05 Kyanite Sillimanite Bhandara 2.618
06 Pyrophyllite Bhandara 0.995
07 Bauxite Satara 30.145
08 Silica and Sea Sand Sindhudurg 50.757
09 Copper Ore Chandarapur 6.40
10 Chromite Bhandara 0.480
11 Dolomite Nagpur 28.740
Yavatmal 29.810

26
MAHARASHTRA STATE ANALYSIS

12 Vanadium ore Gondia 4.65


13 Tungstone ore Nagpur 19.98
14 Zinc Ore Nagpur 8.27
15 Quartz Bhandara 2.123
16 Granite Chandrapur 24.00
Bhandara 178.00
MINERAL BASED INDUSTRIES IN THE STATE

27
MAHARASHTRA STATE ANALYSIS

ENGINEERING GOODS
The engineering industry has been titled the ‘engines of growth’. The tremendous impact and influence it
has on industrialization and consequently the economy can be clearly seen from the economic scenario the
world over. It has catapulted many nations like Japan, Germany, USA, UK, etc into frontline industrial
nations within a very short time. India too has found this industry very responsive and eager to take up any
stimulus to growth. Importance of engineering industry in India can be gauged from the fact that it employs
over 3 million people and accounts for nearly one-third each of productive capital, value added and output
in the organized sector that contributes substantially to both the production and exports of engineering
goods.

The engineering sector has emerged as the largest contributor to India’s merchandise exports, even ahead
of gems and jewellery. Export of engineering goods crossed US $13 billion during April to October in
2006-07, an increase of 29% compared to corresponding period last year. At this rate, engineering exports
would touch $ 24 billion in 2006-07 and this would be the highest among all items in overall merchandise
exports from India, Shri Rakesh Shah, Chairman, Engineering Export Promotion Council (EEPC), has said.

During the last five decades, Council has played a pivotal role in transforming the profile of Indian
engineering exports. Engineering exports which were a meagre US$ 10 million in 1956-57 have now
reached US$ 20.34 billion in 2005-06. The share of engineering goods in the total merchandise exports
from India has also gone up from mere 0.5% to 20% during this period which is also the largest among all
product groups, while the membership strength of the Council has increased from 40 in 1955 to 12415 in
2006.

The Government had announced three stimulus packages on December 7, 2008, January 2, 2009 and
February 16, 2009 (in the Interim Budget for 2009-10) to provide support to the industries impacted by
economic slowdown. These industries included the labour intensive industries. The measures to stimulate
domestic demand inter-alia include reduction in ad-valorem CENVAT duty, incentives to the housing
sector with a view to give a boost to affordable housing, and sector specific initiatives. Further, a set of
measures were announced for enhancing the flow of funds to the MSE sector.
The various measures to support exports included interest subvention of 2% for pre & post shipment export
credit for identified labour intensive industries, additional allocation for export intensive schemes,
additional funds towards providing guarantee by the Export Credit Guarantee Corporations and
enhancements of duty draw back benefits on certain identified exportable items. In addition, RBI has taken
a number of steps to reduce the cost of credit and improve liquidity for the industry such as reduction of the
Repo rates, reverse Repo rates, Cash reserve ratio etc.
With the requirements of the corporate sector located in and around Mumbai being met by Exim Bank's
Mumbai offices, the Pune office will be offering the Bank's comprehensive range of financial products and
services to exporters in other areas of Maharashtra like Pune, Kolhapur, Nagpur, Nashik, Ahmednagar,
Aurangabad, Satara, Sangli, Alibag, Ratnagiri. These regions account for a sizeable part of exports from
Maharashtra. Pune alone accounts for around 35% of engineering exports from Maharashtra. Moreover,
Pune, Nashik and the Konkan area account for around 57% of food and agro exports from Maharashtra.
Again, Pune, Nashik, Aurangabad, Kolhapur and the Konkan area accounts for around 53% of chemical
product exports from Maharashtra. Besides, Pune is one of India's major software development centres
registering exports of around Rs. 550 crores in the year 1998-99. With focus on the software, chemical,

28
MAHARASHTRA STATE ANALYSIS

engineering, and food/ agro industrial sectors, the Bank's Pune office is expected to play a significant role
in catalysing incremental exports of these product groups.
For the FY 1998-99, Exim Bank posted a net profit of Rs. 239.99 crores (19% increase over the previous
year), while the net worth increased to Rs. 1335.21 crores - up from Rs. 1205.67 crores. The Bank has
proposed a dividend payout of Rs. 33 crores to the Government of India after providing for tax of Rs. 75
crores.
Exim Bank's Pune office fulfills a long standing requirement evinced by exporters in this region to have the
country's apex financial institution supporting exports as a next door neighbour. The Bank is confident that
its new office in Pune will contribute to increasing exports from Pune and surrounding regions of
Maharashtra and Goa.
Lathe machines are mostly used in Pump Industries, Textile Industries, Paper Industries, Automobile
Industries, Govt. and Private Technical Institutions and in General Workshops. Most of the Lathe machines
are exported to the Gulf countries. Almost all the lathe machines are exported from India are exported
thought Mumbai port Heavy Duty, Medium Duty, Extra Heavy Duty and Special Purpose Lathe Machines
are receiving unbelievable response internationally.

The vast range of lathe machines that includes:


• Heavy Duty Lathe Machines:- 5'.3" to 25'.00"
• Medium Duty Lathe Machines:- 4'.6", 5'.3", 6'.00"
• Extra Heavy Duty Lathe Machines:- 7'.00" to 32'.00"
• Special Purpose Lathe Machines:- Customized Lathe Machines and Pipe Boring Machines.
Engineering Export Promotion Council (EEPC) was set up in 1955 under the sponsorship of Ministry of
Commerce, Govt. of India, for export promotion of engineering goods, projects and services from India.
Initially started with a few hundreds of engineering units as an small outfit, with a passage of time it has
grown to be the largest Export Promotion Council having membership of nearly 12,000 from amongst large
Corporate Houses, Star Trading Houses, Small & Medium Scale Units (SME), Trading Houses, etc. Out of
the total membership of the Council, 60% constitutes the SMEs.
The steady growth in the export of engineering goods from India has been the continuous innovation
and setting up quality standards in manufacturing and in delivering services – this is evident as a large
number of exporters are ISO 9000 or equivalent accredited. EEPC – right from its inception has been
insisting the exporting community on the quality parameter – and the Council itself has the distinction of
achieving the ISO 9002 accreditation from world renowned KPMG. This has further been upgraded to ISO
9001:2000 for designing and organizing exclusive Indian Engineering Exhibitions abroad.
Engineering exports from India has been steadily growing and the performance has probably exceeded
all expectations ever since the birth of the Council. Apart from being one of the largest stakeholders in the
total exports out of India, – the engineering exporters are the foremost net foreign exchange earner in the
country. As the engineering sector is extremely diversified, the Council has set up different Product Panels
with a view to ensure that all possible & potential Indian products reach out to the global markets.
EEPC aggressively peruses a number of activities & services for its exporting community, its members &
the potential overseas buyers with a two-point objective of facilitating exports of Indian engineering
products & services to the global market and to provide the overseas buyers true value.
The marketing activities of the Council are manifold and in addition to direct marketing, structured
promotional events are organized on a regular basis so as to create awareness on the capability of Indian
engineering exporters. The various promotional activities carried out on a regular basis are product specific
29
MAHARASHTRA STATE ANALYSIS

delegation to select countries, exclusive Indian Engineering Exhibition, country participation in Specialized
Trade Fairs, Catalogue Show, Buyer-Seller Meets, Product Specific Seminars and Conferences - both in
India and abroad.
• Publicity & Promoting the ‘Made in India’ brand
• Organizing INDEE / INDIATECH Exhibition
• Participates at leading Exhibitions and Trade Fairs
• Seminars and Conferences
• Trade Delegations and Buyer-Seller Meet
• Trade Informatic Division (TID)
• Foreign Offices of the Council
• The India Engineering Center
• Export Related Services to Members
• Services to the Overseas Buyers
Export Performance
During last five decades, EEPC has been playing a pivotal role in increasing country’s engineering exports
and as of date, engineering exports have crossed US$ 20 billion in the year 2005-06 in comparison to US$
10 million that was achieved in the year 1956-57. Engineering exports have been registering steady growth
each year and has registered a growth of 27.50% during 2005-06 over the previous year. It is notable factor
that SMEs contribution to total engineering exports is about 40%. This sector is the foremost net foreign
exchange earner of the country.
Export Performance
During last five decades, EEPC has been playing a pivotal role in increasing country’s engineering exports
and as of date, engineering exports have crossed US$ 20 billion in the year 2005-06 in comparison to US$
10 million that was achieved in the year 1956-57. Engineering exports have been registering steady growth
each year and has registered a growth of 27.50% during 2005-06 over the previous year. It is notable factor
that SMEs contribution to total engineering exports is about 40%. This sector is the foremost net foreign
exchange earner of the country.

• Transformation
• Diversification
• Trend
• Average Growth Target
Among the Third World countries, India is a major exporter of heavy and light engineering goods,
producing a wide range of items. The bulk of capital goods required for power projects, fertilizer, cement,
steel and petrochemical plants and mining equipment are made in India. The country also makes
construction machinery, equipment for irrigation projects, diesel engines, tractors, transport vehicles, cotton
textile and sugar mill machinery. The engineering industry has shown its capacity to manufacture large-size
plants and equipment for various sectors like power, fertilizer and cement. Lately, air pollution control
equipment is also being made in the country. The heavy electrical industry meets the entire domestic
demand.

30
MAHARASHTRA STATE ANALYSIS

Indian Engineering Community considers quality as the very essence of successful marketing of any
product. Majority of Indian engineering firms are pursuing a systematic approach to quality control and
standardization so as to carve out market position in the competitive world market place. Engineering
industry in India has been constantly upgrading its technology base and diversifying its manufacturing
range in tune with global market requirements. More than 2500 firms from the engineering sector have
already acquired ISO 9000 accredition in areas such as casting and forging, automobile parts, machine
tools, electrical machinery, primary iron and steel products, industrial machinery, IC engines, pumps,
textile machinery, etc. to name a few. Simultaneously, Indian exporters are not lagging behind in adopting
eco-friendly manufacturing techniques, which have become the word in developed world.

ENGINEERING AND MACHINE TOOLS: STATUS OF INDUSTRY


Over the years, engineering industry in the country has registered a phenomenal growth to generate a strong
base in a wide range of heavy and light engineering industries covering a broad spectrum of capital goods
and consumer durable products. Bulk of capital goods required for power projects, fertilizer plants, cement
plants, steel plants, mining equipment and petrochemical plants are being met from indigenous production.
Construction machinery and equipment for irrigation projects, diesel engines, pumps and tractors for
agriculture, vehicles, etc., transport are also being met from within the country. Engineering industries have
also demonstrated their capacity to manufacture large size plants and equipments for various sectors such
as power generation,fertilizers and cement.

The sale of construction equipment & machinery, cement machinery, chemical machinery and agriculture
machinery were Rs. 1544 million, Rs.1353 million, Rs.18.52 billion and Rs.3480 million respectively in
year 1999-2000.

EXPORTS
Indian engineering industry has shown commendable performance on the export front over the year.
Engineering exports went up from US$ 22 million in 1960-61 to US$ 6781 million in 2000-01. There has
also been a marked shift in commodity composition as well as direction of exports. Developed markets of
the West now account for 40% to total engineering exports, as against 9% in 1960-61.USA has emerged as
the largest single buyer for Indian engineering products accounting for 18% of total exports. Other major
markets include UK, Germany, Hong Kong, UAE, Singapore, and Malaysia. As regards composition,
capital goods sector presently occupies a pride position. Its share to overall engineering exports has
increased from 13% in 1960-61 to more than 33% in 1996-97. The same is also true for subcontracting
items, such as forged and cast components, which offer unlimited prospects, on long-term basis, in
industrialized countries all over theworld.

JOINT VENTURES/TURNKEY PROJECTS


Indian engineering industry has also been actively participating in the industrialization programmes of the
developing countries. Several joint ventures have been set up in various countries, particularly, African
plant and equipment, intermediate technology products. Indian engineering industry has also been
successful in supplying turnkey projects for manufacturing several items of mass consumption like cement,
paper, textile, etc.

QUALITY CONTROL/STANDARDISATION
31
MAHARASHTRA STATE ANALYSIS

Indian Engineering Community considers quality as the very essence of successful marketing any product.
Majority of Indian engineering firms are pursuing a systematic approach to quality control and
standardization so as to curve out market positioning in the competitive world market place. Engineering
industry in India has been constantly updating its technology base and diversifying its manufacturing range
in tune with global market requirements. More than 2500 firms from the engineering sector have already
acquired ISO 9000 accredition in areas such as casting and forging, automobile parts, machine tools,
electrical machinery, primary iron and steel products, industrial machinery, IC engines, pumps, textile
machinery, etc. to name a few. Simultaneously, Indian exporters are not lagging behind in adopting eco-
friendly manufacturing techniques, which have become the buzzword in developed world.

Major manufacturers of machine tools have now developed CNC machine tools such as machining centers,
milling centers, turning centers etc. The machine tool industry has also commenced production of high
productive machines such as industrial robots, flexible manufacturing system, etc. Indigenous industry is
not only exporting general-purpose machines to advanced countries but have also commenced export of
CNC machine tools. Overall production of machine tools has increased from just under Rs. 10 million in
1950-51 to Rs.15.20 billion in 1999-2000. Major export markets for machine tools are USA, Germany,
Bangladesh, UK, UAE and Italy. The exports of construction equipment & machinery, cement machinery
and agriculture machinery were Rs. 7.0 million, Rs. 23 million and Rs.566.0 million respectively in year
1999-2000.

ENGINEERING INDUSTRY IN MAHARASHTRA

Maharashtra occupies an important place in both production as well as exports of engineering goods from
the country. Engineering industry in the state is highly diversified and produces a large range of parts to
industrial machinery to industrial castings and forging. The state has a fairly large number of firms in the
organized sector possessing world class manufacturing capabilities and cost structures, besides a vast
number of small and medium engineering firms.

The industry, which was initially concentrated in the Mumbai-Pune belt, has spread all over, the
State, the major production centers being Nagpur, Aurangabad, Nasik, and Kolhapur. The major
engineering items of production and exports in Maharashtra are textile mill machinery, machinery for
sugar, cement, and chemical plants, food processing machinery, construction machinery, tractors for
agriculture purposes, electric power machinery, transmission line towers and accessories, fabricated steel
like freight containers, automobiles, steel forging, steel castings, bright steel bars, stainless steel product,
auto parts, cutting tools and files, internal combustion (IC) engines and compressors, machine tools,
mechanical pumps and ship and ship buildings.

Total exports of engineering industry in Maharashtra have been estimated at US$ 900 million during 1996-
97. This accounts for over 21 per cent of total export of engineering products in the same year. However,
the products which have high potential of exports from Maharashtra include industrial castings forging,
complete vehicles including two/three wheelers automobile parts, machine tools, industrial machinery, steel
tubes, diesel engines, pumps, valves, compressors, seamless tubes and switch gears. These products have
been identified considering current and future production technology scenario and exports. The major
competing countries for most of the engineering products exported from the state are Japan, South Korea,
Taiwan and China besides West European and North American countries. In overall terms, the export
outlook for engineering products is bright. The shift in favour of value added items is getting pronounced
from the fact that export growth of these items is high against negative growth in respect of prime iron and

32
MAHARASHTRA STATE ANALYSIS

steel. Maharashtra and Gujarat will continue to dominate this industry with more than half the nation’s
output and value addition. The Maharashtra Government has taken the right steps by introducing stringent
pollution control laws.

PHARMACEUTICAL INDUSTRY

Biopharmaceuticals in Maharashtra
Cluster History & Development

The Western region has been a major base for the Indian pharmaceutical industry for more than a hundred
years and houses leading national companies like Wockhardt, Nicholas and Intas as well a number of large
international companies including GlaxoSmithKline, Novartis, Pfizer, Johnson & Johnson, Abbott, Aventis
Novo Nordisk, etc. Almost all the traditional pharmaceutical companies are now engaged in research and
production of biopharmaceuticals mirroring global trends. One of the oldest Indian firms and largest
biopharmaceutical company in the country, the Serum institute of India, is based in Pune. The Institute is
the largest manufacturer of vaccines and sera in the world and claims to reach one fourth of the world’s
children2 Today companies located in Maharashtra account for 35% of India’s biotech revenues with Pune
and Mumbai as the combined center of the industry in the state.

33
MAHARASHTRA STATE ANALYSIS

Source-BioSpectrum India, August 2008

The development of the biopharmaceutical cluster in Maharashtra can be broken up into three stages- 1)
Pre-independence, 2) 1947 to 1990, 3) 1991 to current corresponding to major political events such as
India’s independence (1947), Balance of Payment Crisis (1990).

34
MAHARASHTRA STATE REPORT

Source-Team Analysis

The pre-independence production of biopharmaceuticals was mainly oriented to serving the


needs of British soldiers stationed in India. In the years that followed independence, the
Central Government followed a policy of import-substitution to reduce India’s dependence
on costly foreign drugs. During this period a number of public sector firms (Hindustan
Antibiotics Limited, 1954) and Central Scientific Research Organizations were established in
Maharashtra, laying the ground for the development of the pharmaceutical and biotech
clusters in the state. The government’s policy also benefited firms like the Serum institute
(1966) that was started by horse-trader Cyrus Poonawalla with 10 scientists from the
Haffkine Institute. Post liberalization, the playing field for foreign and domestic firms
became more level. This period has been characterized by an increase in exports, research
partnerships, mergers and acquisitions.

Maharashtra Biopharmaceutical Cluster Diamond


FACTOR ONDITIONS

Maharashtra has a large pool (173,894 engineering graduates per annum) of low cost English
speaking skilled labor. The presence of one of the 6 Indian Institutes of Technology in
Mumbai is the clearest example of a regular supply of local highly talented technical
excellence. The challenge of ‘brain drain’ is however one that must be overcome if the cluster
is to move up the value chain from process replication to ‘original’ research and
development.

Whilst the focus of the cluster is Pune, the importance of Mumbai for both its international
airport and its role as a center of the Indian financial community is important to the evolution
of the biopharmaceutical cluster. The nature of biopharmaceutical as a high risk endeavor
means that the proximity to the venture capital in Mumbai is a crucial factor for the long term
investment required. In addition to the existence of the airport, the lack of restrictions on

35
MAHARASHTRA STATE REPORT

biological imports allows the biopharmaceutical companies to source supplies that cannot be
easily obtained locally.

These positive factors offset the deficient general infrastructure notably hazardous roads and
unreliable electricity supply. The existence of over 3 biotech parks, encouraged by both the
state and central governments, is critically important as these provide the independent
electricity generators that ensure the consistency of supply that is critical to
biopharmaceutical production. The superior amenities of the parks allied to local low cost
equipment fabrication translate to a cost advantage for the producers. Without these amenities
producers would not be able to maintain the sterile environments required for manufacture, as
the general urban environment in India continues to suffer from low levels of sanitation and
sewerage collection & treatment and poorly managed water resources.

CONTEXT FOR FIRM RIVALRY AND STRATEGY

The most important piece of legislation that has impacted the competitive behavior of
biopharmaceutical firms in the cluster and across the country is India’s decision to sign onto
TRIPS in 1995 and complete the transition process in 2005 with the 3rd Amendment to the
Indian Patent Act of 1970 -fully recognizing product patents 3. This has limited the ability of
firms to produce generic versions of drugs patented elsewhere. The impact of the new patent
regime can be seen in the shift of the business strategy of Indian firms. Two major trends:

1) Shift from pure manufacturing and marketing of generics to R&D through tie ups with
Central Institutes and foreign firms (e.g.: Lupin Laboratories, Mumbai ties up with Central
Drug Research Institute Lucknow and Indian Institute of Chemical Technology, Hyderabad)
.
2) Investments and agreements to capitalize on outsourcing opportunities. McKinsey projects
that the market for Clinical Trials alone in India is expected to be $1.5 Billion by 2010 and
growing at a rate of 30-35% per annum with Pfizer, Johnson& Johnson, GlaxoSmithKline
and AstraZeneca already conducting trials in India (5% of global trials in 2012)

Given the size of the opportunity presented by a rising middle class eager to access patented
drugs, Indian drug companies have accepted the new patent regime as an opportunity to shift
their business model away from mass therapies to more specialized, patented drugs that can
be sold at a higher price.

In this new environment, the central government is highly supportive of the


biopharmaceutical industry with the Department of Biotech providing grants for R&D and
overseeing a flexible regulatory environment.

DEMAND CONDITIONS

The legacy of import substitution and public sector demand for inexpensive mass
vaccinations has sustained the cluster for most of the previous century. Large governmental
demand for low cost vaccines has meant the cluster has developed the capability of process
replication and high volume (though low value) production. The growing middle class means
there is some initial demand for the higher value items that the cluster currently only
produces for export. The increasing disease burden means there is significant focus on the
biopharmaceutical solutions for cost effective results. Allied to a wave of drugs coming off
patent and the active IGO sector, the cluster has some attractive demand dynamics.

36
MAHARASHTRA STATE REPORT

India’s biopharmaceutical industry has achieved impressive levels of growth; the average
growth rate of biopharmaceuticals in India 2002-05 has been 34% and accounts for 76% of
total revenues in the biotech sector. With sales valued at US$2.86 billion in 2007-2008, it is
expected that based on current growth trends the industry will hit US$ 5.7 billion by 2012-13
(McKinsey, 2008) As domestic demand for improved healthcare, and international
opportunities for biologics increase, India will continue to expand its presence on the world
biopharmaceutical stage.

Diagnostics, vaccines and recombinant therapeutic proteins are the three main segments in
the Indian biopharmaceutical industry. Recombinant therapeutics and vaccines jointly make
up almost $500 million of the domestic market. The vaccines market in India is growing at a
rate of 38% and comprises 17 domestic and international players that market 50 brands of 15
different vaccines (Pharmabiz Magazine, 2009).

On the other hand, a major area of opportunity lies in the highly competitive Indian market
for recombinant Insulin for treating diabetes. The present insulin market in India
approximates 300 million (including high end vaccines introduced by the private sector), with
the human insulin market is growing at the rate of 40.5%. The launch of Insulin by Indian
companies has resulted in drastic downward revision in prices. Earlier, such therapies were
restricted to a small category of patients who could afford the drug. Products showing good
potential are Erythropoietin, Streptokinase and Interferon. The market for Hepatitis B vaccine
alone accounts for revenues to the tune of US$ 22 million, which is a critical local
requirement as 8.7% of the global incidence of Hepatitis B occurs in India (Pharmabiz
Magazine, 2009).

Nevertheless, the poor public health system, unsophisticated demand and high untreated
population mean the cluster has limited local demand sophistication that could drive
innovation. The high reliance on governmental purchases means the industry cannot allocate
investment based purely on financial considerations. Additionally the largely unorganized
retail environment means that demand is difficult to understand precisely, and thereby results
in inadequate marketing to audience that have strong influence on direct demand for drugs.

RELATED AND SUPPORTING INDUSTRIES

To better understand Maharashtra’s strength in biopharmaceutical we first examine the value


chain. The biopharmaceutical value chain is similar in structure to the pharmaceutical value
chain and is composed of four main parts: research & drug discovery, preclinical studies,
Phase I, II & III trials and manufacturing/distribution, as shown.

BIOPHARMACEUTICAL VALUE CHAIN

37
MAHARASHTRA STATE REPORT

Of these various phases, Indian companies and multinationals based in India have been
focused on Manufacturing and Marketing (see shaded area above). R&D investments by
Indian and multinationals have increased since India signed TRIPS. India is now considered a
serious contender in the market for outsourcing Clinical Research (Phases 1, 2 &3). In 2009,
the USFDA opened offices in Mumbai (Maharashtra) and Delhi to facilitate speedy approvals
of patent applications from India.

MAHARASHTRA BIOPHARMACEUTICAL CLUSTER MAP


The cluster map reflects strengths in manufacturing and marketing in line with our value
chain analysis. There are over 4100 registered pharmaceutical firms and 70 biotech firms in
Maharashtra. Initially dependent on the availability of horse blood for plasma to produce anti-
toxins like tetanus, firms were located close to animal farms in Mumbai and Pune. Later, the
Indian government allowed duty free imports of biological material for export purposes and it
was less important to be located near animal farms. Other key cluster inputs:

Skilled manpower:

Typically, workers in biotech need a Masters or a PhD to gain employment. The University
of Mumbai, the Indian Institute of Technology and Pune University are educational
institutions that have dedicated Biotechnology departments. Pune, once known as the ‘Oxford
of the East’ has over 100 institutes and 9 universities lending substantially to Maharashtra’s
pool of technical graduates. For the biopharmaceutical industry in particular, there are threats
to the supply of talent from two sources: 1) Students who pursue a PhD in countries like the
U.S. and U.K. often choose to stay abroad aided by immigration policies that favor highly
skilled people and 2) Competition for graduates from companies in other Indian states. While
figures for the second category of brain drain are not available, it is safe to say that Brain

38
MAHARASHTRA STATE REPORT

Drain from India to developed countries does impact the work of Biopharmaceutical
companies by creating a scarcity of specialists.

Research centers:

There are over 10 National research organizations that make Maharashtra and Pune in
particular, a hub for the exchange of scientific ideas and provide University students access to
the latest Indian biotech research . Government investments in these institutes provide
opportunities for collaborative research with the biotech industry though formal partnerships
are very few.

The bulk of original research continues to take place outside of the cluster. For most diseases
with economic potential, researchers work for companies and universities located in
developed western countries and the number of collaborations has increased manifold in the
last few years (e.g. Serum Institute and Syracuse University tie-up to develop oral insulin).

The presence of a large IT industry (over 1200 units in the state accounting for over 30% of
India’s software exports), a strong financial services cluster,(Over 90 per cent of merchant
banking transactions are structured in Mumbai, which also accounts for 14 per cent of nationl
bank deposits) large healthcare delivery cluster (private and public hospital network) and an
established agri-business and animal husbandry clusters ( MAHYCO5is the largest supplier of
hybrid seeds in India and Venky’s is the largest integrated poultry farming group in Asia)

39
MAHARASHTRA STATE REPORT

further support the growth of biopharma in Maharashtra. Venkys has recently diversified
from producing only animal biopharmaceuticals to human biopharmaceuticals. Equipment for
biotech labs is largely designed by firms and fabricated by contract manufacturers within the
state. Specialized equipment is typically imported by air or ship.

In terms of Institutions for Collaboration, Maharashtra lacks sector-specific private


organizations such as those located in other Biotech states like Karnataka (Association of
Biotech Led Enterprises) and Andhra Pradesh (All India Biotech Association). The
Maharashtra Government however, has been extremely pro active in setting up the
Maharashtra Biotech Board and Maharashtra Biotech Commission to implement the state’s
Biotech Policy (2001) and utilizes the funds allocated under a special Biotech Fund to finance
new ventures. The Fund (initially $10 million) was developed through contributions from all
state departments such as Agriculture, Commerce and Health.

Companies within the cluster adhere to standards set by the Central Drug Standard Control
Organization, Maharashtra’s own Food and Drug Authority, the US FDA (for exports to the
developed world) and WHO (for exports of vaccines to developing countries).

Finally, Maharashtra’s Biopharma cluster benefits from the presence of an active


International government sector in the form of UNICEF, WHO, PAHO 6 - key buyers of
vaccines for developing countries. Most international organizations have state offices that
coordinate with international procurement offices based in Geneva. India’s Ministry of
Health is also a major buyer of vaccines for its ‘Extended Program of Immunization’, though
its Vaccine Procurement Cell is located in New Delhi.

To conclude, Maharashtra’s Biopharmaceutical cluster is very strong in the Factor Conditions and
Related and Supported Activities corners of the Cluster Diamond. These are also the areas where
the Maharashtra government has the most leverage with the other two corners largely dependent on
Central Government policies and macroeconomic conditions.

CONCLUSION

40
MAHARASHTRA STATE REPORT

From the above analysis of various industrial sectors in Maharashtra which have potential of exports
to other countries we can conclude that:

In Agricultural sector there are various fruits rather than vegetables which can be exported.
Particularly there is huge scope for exporting fruits like Pomegranate which has been taken as case in
the analysis. Also there is scope for various other fruits like Banana, Mangoes, Strawberries etc.

When we consider the Tourism sector there is particularly scope in various tourist spots like
Mahabaleshwar, Mumbai, beaches like alibag, religious spots like Shirdi, Historical spots like Ajanta
caves etc.

Coming to Mining sector there is huge scope of exporting minerals from Bhandara district which is
Eastern part of Maharashtra or Central India.

In case of Engineering goods sector there is scope for exporting various spare parts. Particularly most
of the exports pass through Mumbai port.

Pharmaceutical sector has been dealt which focuses on various Pharma Industries in Maharashtra
along with scope of exporting various biopharmaceutical products.

41