Project report on Business opportunities in Jharkhand

SUBMITTED BY:
SANDEEP SINGH ROLL NO-291091149

INSTITUTE OF MANAGEMENT AND DEVELOPMENT NEW DELHI

Table of contents
Acknowledgement List of illustrations 1.0 Abstract Introduction Objective Method of Collecting Data Sources of Data i ii 1 2

2.0 Report Jharkhand²At A Glance Economic Overview of the State State economy and socio profile Physical & Social Infrastructure State policies &Incentives to Industry Business opportunities Doing business in Jharkhand SWOT Analysis 3.0 Conclusion and Recommendation 4.0 Limitations of Study 5.0 Reference

6 7-10 11-20 21-33 34-41 42-64 65-71 72-74 75

Acknowledgement
Life of nay human being is full of interaction. No one is completely self sufficient by himself/herself. In our daily life we go ahead by acquiring something from each other. Whatever we do and whatever we achieve during the course of our limited life is just not by or own efforts but there is always some amount of effort contributed by other people associated with it. Whenever someone is doing some serious and important work where a lot of guidance from many people concerned is needed, one co-operation during the project work is left along lasting impression in my mind and while giving the final shape to my project report; I can¶t forget acknowledging them in words. We would like to extend our sincere thanks to Mr.ABHISHEK CHOUDHARY, Vice Chairman, IMD for providing us an opportunity to do a project concerning the availability of investment opportunities in different states of INDIA. We are also wholeheartly thankful to «««. for accepting my project and giving me an opportunity to undertake a project in the state of JHARKHAND.

1.0 ABSTRACT

JHARKHAND

INTRODUCTION
BOKARO DEOGHAR DUMKA GIRIDIH GUMLA JAMTARA KODERMA LOHARDAGA PALAMU West Singhbhum RANCHI SERAIKELA-KHARSAWAN CHATRA DHANBAD GARHWA GODDA HAZARIBAGH KHUNTI LATEHAR PAKAUR East Singhbhum RAMGARH SAHIBGANJ SIMDEGA

The 28th state of the Indian Union was brought into existence by the Bihar reorganization Act on November 15,2000- the birth anniversary of the legendary Bhagwan Birsa Munda. Jharkhand is famous for its rich mineral resources like Uranium, Mica, Bauxite, Granite, Gold, Silver, Graphite, Magnetite, Dolomite, Fireclay, Quartz, Fieldspar, Coal (32% of India), Iron, Copper (25%of India) etc. Forests and woodlands occupy more than 29% of the state which is amongst the highest in India. FACT SHEET* Population 2,69,09,428 Male Population 1,38,61,277 Female Population 1,30,48,151 Per Capita Income Rs. 4161.00 Density of Population 338 persons / Sq. KM No. of Districts 24 No. of Sub divisions 35 No. of Blocks 212 No. of Villages 32620 No. of Villages Electrified 14667 (45 % of total) No. of Villages connected by Road 8484 National Highways 1006 KMs Stat4662 KMs. Objective The purpose of the project under study is to analyze the pros and cons of the investment opportunity available in the state of Jharkhand .the project is undertaken to discover the areas of business from the investor point of view.

Method of collection of data: Secondary sources A) Concern data B) Website data C) Annual data D) Respective data E) Business magazine and journal F) Internet

Presentation of data Data will be presented in the form of table and other diagrams.

Source of data Websites-www.ibef.com www.wikipedia.com www.businessgov.in www.google.com

REPORT

JHARKHAND

Investment climate of a state is determined by a mix of factors

‡ ‡ ‡ ‡

Skilled and cost-effective labour Labour market flexibility Labour relations Availability of raw materials and natural resources

‡ ‡ ‡ ‡

Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation

Resources/Inputs
Incentives to industry
‡ ‡
‡ ‡

Investment climate of a state
‡ ‡ ‡

Regulatory framework
Physical and social infrastructure

Tax incentives and exemptions Investment subsidies and other incentives
Availability of finance at cost-effective terms Incentives for foreign direct investment (FDI)

‡

Profitability of the industry

Condition of physical infrastructure such as power, water, roads, etc. Information infrastructure such as telecom, IT, etc. Social infrastructure such as educational and medical facilities

3

JHARKHAND

Contents 
Advantage Jharkhand  
State economy and socio-economic profile  

  
  

        

Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 

4

ADVANTAGE JHARKHAND Jharkhand

Jharkhand ± State profile
‡

Jharkhand is located in Eastern India and covers an area of 74,677 sq km. It was carved out of Southern Bihar in 2000 to form a separate state. Jharkhand has 24 administrative districts. Ranchi is the state capital and an industrial city. Jamshedpur, Dhanbad, Bokaro, Deoghar and Hazaribagh are some of the other major cities and industrial areas in the state. Forests and woodlands occupy more than 29 per cent of the state, making it one among the states with greater forest cover. Jharkhand has around 40 per cent of the country¶s mineral resources such as coal, iron ore, copper, uranium, mica, bauxite, granite, limestone, gold, silver, graphite, magnetite and dolomite. Commonly spoken languages of the state are Hindi and
Santhali. Urdu and Bengali are also prevalent. English is the
Source: Maps of India

‡ ‡

‡

‡

‡

primary medium of education.
5

ADVANTAGE JHARKHAND Jharkhand

Advantage Jharkhand « (1/2)

Endowed with extensive mineral reserves
Jharkhand has around 40 per cent of the country¶s mineral wealth. The state is one of the largest producers of coal, mica and copper in India. Because of its large mineral reserves, mining and mineral extraction is the major industry in the state.

Policy and fiscal incentives
Jharkhand offers a wide range of fiscal and policy incentives to the industries, under the Industrial Policy, 2001. The state also has policies for IT and SEZ offering sector-specific incentives.

Source: Maps of India

6

ADVANTAGE JHARKHAND Jharkhand

Advantage Jharkhand « (2/2)

High economic growth Jharkhand¶s economy has grown at about 12 per cent between 2000-01 and 2008-09. The state provides opportunities in sectors such as mining and metal, power, infrastructure, manufacturing and food processing to sustain growth. Location advantage The state¶s industries enjoy a unique location-specific advantage as it is close to the vast market of Eastern India; it is closer to the ports of Kolkata, Haldia and Paradip and has easy access to raw materials.
Source: Maps of India

7

ADVANTAGE JHARKHAND Jharkhand

Jharkhand in figures
Parameter Economy GSDP as a percentage of all states¶ GSDP Average GSDP growth rate (%) Per capita GSDP (US$) Physical infrastructure Installed power capacity (MW) Broadband subscribers (No) National highway length (km) Airports (No) Social indicators Literacy rate (%) Birth rate (per 1,000 population) Ease of doing business Outstanding investments (US$ billion) Industrial infrastructure PPP projects (No) SEZ (No)
‡Includes Bihar
PPP: public private partnership, SEZ: special economic zone

Jharkhand

All-states

Source

2.0 11.2 574.1

100.0 7.5 998.1

CMIE, 2007-08, current prices CMIE,1999-2000 to 2007-08 CMIE, 2007-08 Central Electricity Authority, as of March 2009 As of October 2008 Ministry of Road Transport & Highways, 2007-08 Industry sources Census of India, 2001 Central Bureau of Health Intelligence, 2007 CMIE, as of December 2008

1,754.1 63,305* 1,805 1 53.6 26.1 99.3

98,996.4 4,981,976 70,548 133 64.8 23.3 1,709.7 460 347

6 1

www.pppindiadatabase.com Notified as of April 2009, www.sezindia.nic.in

8

ADVANTAGE JHARKHAND Jharkhand

Key industries with policy thrust and factor advantages

Industry attractiveness matrix
High Mining and

metal
Heavy
Policy thrust

Auto
components
Medium

engineering

Agroindustry Chemicals IT and electronics

Low

Medium
Factor advantage

High

*Factor advantages include benefits due to geographical location and availability of factors such as talent pool, natural resources and capital

9

JHARKHAND

Contents 
Advantage Jharkhand  
State economy and socio-economic profile  

  
  

        

Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 

9

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Socio-economic snapshot of Jharkhand
Parameters Capital Geographical area (sq km) Administrative districts (No) Population density (persons per sq km) Total population (million)* Male population (million) Female population (million) Decadal population growth rate (%) Sex ratio (females per 1,000 males)* Literacy rate (%)* Male (%) Female (%) Average life expectancy (years) Male* Female*
Sources: Jharkhand Government (www.jharkhand.nic.in), Central Bureau of Health Intelligence, CMIE *Census 2001

Jharkhand Ranchi 74,677 24 360 26.9 13.8 13.1 23.4 940 53.6 67.3 38.9 62.9 62.3

10

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE

Jharkhand¶s GSDP
‡ ‡

At current prices, the Gross State Domestic Product (GSDP) in 2008-09 was US$ 16.5 billion. Between 2000-01 and 2008-09, the average annual GSDP growth was 12 per cent.

GSDP of Jharkhand (US$ billion)
20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Source: CMIE 7.3 6.6 8.3 9.7
CAGR 15.1

17.2
16.5 12%

.4

12.2

11

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE

Jharkhand¶s NSDP
‡ ‡

The Net State Domestic Product (NSDP) of Jharkhand was about US$ 14.2 billion, in 2008-09. The average NSDP growth rate between 2000-01 and 2008-09 was about 12 per cent.

NSDP of Jharkhand (US$ billion)
16 14 12 10 8 6 4 2 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 5.7
7.2
13.0

14.9

14.2

CAGR 12%
8.4

9.9

10.5

6.3

Source: CMIE

12

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

The secondary and tertiary sectors drive Jharkhand¶s economy
‡

In 2008-09, the tertiary sector¶s share in GSDP was 43.2 per cent (US$ 6.4 billion). It was followed by the secondary sector¶s contribution of 33.2 per cent (US$ 4.9 billion). The secondary sector has been the fastest growing with an average growth rate of 19.3 per cent. The growth has primarily been driven by manufacturing. The tertiary sector has had an average growth rate of 11.1 per cent, driven by services. The primary sector¶s contribution has fallen after the separation of Jharkhand from Bihar, which resulted in the state retaining a bulk of the combined industrial units, but losing the fertile Gangetic plains that became a part of the parent state (Bihar). However, Jharkhand retains the minerals and mining areas, which are the key contributors to the primary sector.
13

Percentage distribution of GSDP
100% 80% 60% 40% 20% 0% 2000-01 Primary Sector 2008-09 19.9% 34.5% 33.2% 23.5% 45.6% 43.2%

CAGR 11.1%

‡

19.3% 6.7%

‡

Secondary Sector Tertiary Sector

‡

Source: CMIE

‡

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Per capita GSDP
‡

The per capita GSDP of Jharkhand almost doubled from US$ 249 in 2000-01 to US$ 541 in 2008-09.

‡ The

robust growth in the secondary sector has helped Jharkhand increase its average per capita GSDP at a CAGR of 10.2 per cent between 2000-01 and 2008-09.
Per capita GSDP (US$)
700 600 500 400 300 200 100 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Source: CMIE 249 268 300 344 574

CAGR 10.2%
396

509 419

541

14

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Distribution of households by income « (1/2)
‡

The per capita income of Jharkhand was US$ 574.1 in 2007-08.
A comparison of asset ownership by households in Jharkhand vis-à-vis all-India shows that there is a great deal of scope of market expansion as the state moves towards economic development.

Percentage ownership of household goods, vehicles and electricity consumption

‡

Source: The Market Skyline of India 2006 by Indicus Analytics

15

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Distribution of households by income « (2/2)
‡

A comparison of ownership of assets and facilities such as sewing machines, in-house toilets, clocks and ceiling fans by households in rural Jharkhand shows that there is a great deal of scope for market expansion as the state moves towards economic development.

Percentage of rural population owning household goods and basic amenities
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Sewing machines In-house toilets All-India Time clocks Ceiling fans Jharkhand 9.7%
5.2% 43.5%

61.0%

35.7% 27.5%
10.6%

8.4%

Source: BW Marketing Whitebook 2009-10

16

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Industries are based on state¶s natural resources
‡ The

natural resources, policy incentives and location-specific advantages of Jharkhand support investments in sectors such as mining and metal extraction, engineering, iron and steel, and chemicals.
Since Jharkhand has around 40 per cent of the country¶s mineral wealth, its extensive mineral resources make mining, metals and related sectors, a naturally strong sector of the state.

Key industries in Jharkhand
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

‡

Mining and mineral extraction Engineering Iron and steel Chemicals Metallurgy Handloom Food and beverages Plastics and rubber Printing and packaging Tourism
Major minerals of Jharkhand

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

Coal Iron ore Copper Aluminium Graphite Mica Manganese Uranium

17

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Rice, maize and wheat are the major crops of Jharkhand
Around 30 per cent of the total land in Jharkhand is used for agriculture. The major crops produced in Jharkhand are rice, maize, wheat and arhar.
In 2006-07, the total production of the major crops of the state was over 3.4 million tonnes.

‡

Crop Rice Maize Wheat

Annual production* (µ000 tonnes) 2,970.0 300.0 130.0 60.0

‡

‡

Arhar
*As of 2006-07 Source: CMIE

‡

Besides rice, maize, wheat and arhar, pulses and oilseeds are also grown in the state.

‡

In 2008-09, programmes have been executed for productivity and quality enhancement, introduction of tissue culture as a new technology and farm mechanisation for sugarcane.
The state¶s soil and climatic conditions also support the cultivation of ornamental plants, mushrooms, spices and tea.
18

‡

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Jharkhand¶s exports trends

‡

Jharkhand¶s exports increased at a CAGR of about 15.6 per cent between 2000-01 and 2008-09.
‡

Annual exports growth trends (%)
2008-09E 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 -33.2 2000-01 -30.1 -50 -30 -10 10 30 50 70 90 23.6 1.7 44.8
81.8

The state¶s major exports are engineering goods and services, auto-components and chemicals.

2.7 3.1 36.2

Source: Capital Markets

19

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Jharkhand

Investments
Break-up of investment by sector
‡ As

of December 2008, the total outstanding investments in Jharkhand were US$ 99.3 billion.

1.5% 0.02% 0.1% Manufacturing 36% 60% Mining Electricity Services Irrigation Construction 2%

‡

The manufacturing industry accounted for the largest share of investments (59.6 per cent), followed by electricity (36.4 per cent).

Source: CMIE

20

JHARKHAND

Contents 
Advantage Jharkhand  
State economy and socio-economic profile  

  
  

        

Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 

21

INFRASTRUCTURE STATUS Jharkhand

Road network
‡

Jharkhand has 12 National Highways (NH)* running through it and covering 1,805 km. The length of State Highways is over 4,662 km.

‡

Industrial activity in the state is primarily concentrated in an area Southwest of NH-2, which connects Kolkata with Delhi via Jharkhand.

‡

In order to provide good road-transport network in other parts of the state, the Asian Development Bank (ADB) has sanctioned a project of US$ 200 million in December 2009.
*National highways running through Jharkhand: NH-2, NH6, NH-23, NH-31, NH-32, NH-33, NH-75, NH-78, NH80, Nh-98, NH-99 and NH-100

Source: Maps of India

22

INFRASTRUCTURE STATUS Jharkhand

Railway network
‡

The total railway route length in Jharkhand is 1,955 km. The rail density is 26.7 km per 1,000 sq km. The state has extensive goods-handling facilities available at Ranchi, Bokaro, Dhanbad and Jamshedpur stations.
The proposed dedicated freight corridor (Eastern corridor-extension to Kolkata; under the Dedicated Freight Corridor Corporation of India) will pass through the state and is expected to benefit the industry significantly.

‡

‡

Source: Maps of India

22

INFRASTRUCTURE STATUS Jharkhand

Airports
‡

A domestic airport is located in the state capital, Ranchi. Direct links are available from Ranchi to prominent cities such as Delhi, Patna, Kolkata and Mumbai. Jamshedpur, Dumka, Bokaro, Giridih, Deoghar, Hazaribagh, Daltonganj and Noamundi also have airstrips. The State Government plans to allow air taxi/cargo service operators to use these air strips, and concessions on landing facilities are likely to be provided.

‡

‡

Domestic airport

23

INFRASTRUCTURE STATUS Jharkhand

Telecom
‡

Jharkhand had 492 telephone exchanges and 1.26 million telephone connections (including both wireline and mobile phones) as of March 2009.
There are about 420,000 wire-line telephone connections in the state and 840,000 mobile phones.

Major telecom companies in Jharkhand Bharat Sanchar Nigam Limited (BSNL) Vodafone Essar Reliance Communications Idea Cellular Tata Teleservices Bharti Airtel

‡

‡

Jharkhand has a tele-density of 4.1 connections per 100 population as compared to the national average of around 37.
Over 92 per cent of the villages of the state have telephone connections through exchanges or public call operators. Jharkhand has 3,124 post offices.

Source: Company websites

‡

Telecom infrastructure in Jharkhand Telephone exchanges Telephone connections (million) Wire-line connections (million) Mobile phones (million) Tele-density (per 100 population) 492 1.26 0.42 0.84 4.1

Source: Department of Telecommunication, Government of India

24

INFRASTRUCTURE STATUS Jharkhand

Power
‡ As

of March 2009, Jharkhand had a total installed power generation capacity of 1,754.1 MW, which comprised 1,394.1 MW under state utilities and

Installed state and private capacity (MW)
2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

360.0 MW under the private sector.
‡

1,754 1,754 1,754 1,754 1,630 1,630 1,630 1,630

The capacity owned by state utilities comprised about 90 per cent of coal-based power plants

and the balance was, primarily, hydro-power.
‡

The entire private sector controlled capacity is of coal-based power plants.
In 2009, the Central Government handed over the construction of the 4,000 MW, ultramega power project (UMPP) at Tilaiyya to the Anil Dhirubhai Ambani Group after completing the competitive bidding process.

‡

Source: Central Electricity Authority

25

INFRASTRUCTURE STATUS Jharkhand

Urban infrastructure
‡ Under

the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), four projects costing US$165 million have been sanctioned for the urban centres such as Ranchi and Dhanbad. The key areas of development are solid-waste management system and water supply.
City
‡

‡

Water supply In 2006, the demand for water was 227 million litres per day (mlpd); it is expected to increase to 440 mlpd by 2021. Around US$ 64 million of investment has been envisaged up to 2013. In 2006, the demand for water was 254 mlpd; it is expected to increase to 408 mlpd by 2026. Around US$ 83 million of investment has been envisaged up to 2013.
‡

Solid-waste management system Solid -waste generation is expected to increase from 255 tonnes per day (tpd) in 2006 to 602 tpd in 2026. Around US$ 24 million of investment has been envisaged up to 2013. Solid-waste generation is expected to increase from 440 tpd in 2006 to 776 tpd in 2026. Around US$ 12 million of investment has been envisaged up to 2013.

Ranchi
‡

‡

‡

‡

Dhanbad
‡

‡

Source: JNNURM, Ministry of Urban Development

26

INFRASTRUCTURE STATUS Jharkhand

Key public-private partnership projects
Project name Adityapur water supply project, Phase-I Birsa bus stand-cum-commercial complex City Centre, Adityapur Sector Urban development Urban development Urban development PPP type Management contract BOOT BOT - Annuity BOT - Annuity Lease BOT-Toll Project cost (US$ million) 32.6 16.5 32.6 54.3 11.9 Stage EOI EOI EOI EOI Construction Construction

Jaipal Singh stadium, sports and commercial Urban development complex National Games housing complex, Ranchi Second Adityapur toll-bridge on the river, Kharkali
Source: pppindiadatabases.com

Urban development Roads

BOT: Build-operate-transfer, BOOT: Build-own-operate-transfer, EOI: Expression of interest

27

INFRASTRUCTURE STATUS Jharkhand

Education sector
‡ Jharkhand

had a literacy rate of 53.6 per cent in 2001. The literacy rate among male was 67.3 per cent, while literacy rate among female was 38.9 per cent.

‡ The

state has 44,058 government or government-aided schools, six universities, two law colleges, five engineering institutes and10 medical colleges. March 2009, Central University of Jharkhand has started offering courses in mass communication, business administration, mathematics and English. The University Grants Commission (UGC) granted recognition to the Kolhan University (Chaibasa) in 2009-10.
Birla Institute of Technology (Ranchi), National Institute of Technology (Jamshedpur) and the Indian School of Mines (Dhanbad) are among the well-known engineering colleges of the country. The Xavier Labour Relations Institutes in Jamshedpur is one of the premier business schools in India.

‡ Since

‡ The

‡

The state has five research institutes of repute. They are involved in research in fields of iron and steel, mining and metallurgy.

28

INFRASTRUCTURE STATUS Jharkhand

Health infrastructure
‡

Jharkhand has 330 primary health centres (PHCs), 3,958 sub-centres, 24 district-level hospitals, 10 sub-division hospitals and three medical college hospitals.

Health indicators of Jharkhand Birth rate* Death rate* Infant mortality rate** 26.1 7.1 46.0 62.9 62.3

‡

The broad objectives of the state¶s health department include enhancing maternal- and child-healthcare, stabilising population growth and improving nutritional status.
The state stresses upon the empowerment of women and inclusion of non-profit organisations in order to achieve its objectives. The State Government has drafted a policy for establishment of super-speciality hospitals, medical and nursing colleges, and paramedical institutes.

Life expectancy at birth (male) Life expectancy at birth (female)
*Per thousand persons ** Per thousand live births

‡

Source: SRS 2008, Ministry of Health and Family Welfare,

29

INFRASTRUCTURE STATUS Jharkhand

Cultural infrastructure
‡ The

culture of Jharkhand encompasses its languages, dance, drama, music and painting and is characterised by the distinct tribal or folk form. The state has around 30 indigenous tribes, including nine primitive ones. The State Government has established Chhau dance (a form of folk dance) centre at Saraikela and Bharatiya Nritya Kala Mandir at Ranchi and Dumka.

‡

‡

temple, Haradih temple, which are being conserved by the Archaeological Survey of India. There are two museums in the state, one each at Ranchi and Dumka. Building a new state museum has been proposed.
‡ There

The state has historic and pre-historic sites such as Maluti temple, Palamu fort, Tanginath

are six sports training centres: three for hockey, two for athletics and one for football, located at Ranchi, Gumla and Latehar. Ranchi also has an 18-hole golf course, while another one has been proposed for construction.

30

INFRASTRUCTURE STATUS Jharkhand

Industrial infrastructure « (1/2)
‡

Jamshedpur is the original industrial town in the state where the Tata Group set up their first steel plant, more than100 years ago. It is a privately run township and now has several types of industrial units including automotive, metals, chemicals, electrical and electronic goods.
Several other industrial areas have been developed in the state based on the location of mineral reserves and related down-stream industries. An SEZ has been notified at Adityapur (adjoining Jamshedpur) for the automotive industry.

Industrial areas Palamu-Garhwa industrial area Loharadagga industrial area Koderma-Hazaribagh industrial area Ranchi industrial area Dhanbad-Bokaro industrial area

‡

Singbhum industrial area Ghatshila industrial area Deoghar industrial area

‡

Growth areas Mega-growth areas Mini-growth areas Micro-growth centres Barhi, Hazaribagh Food park (Ranchi) Apparel park (Chaibasa) At the block-level to boost village-based industries

‡

Appreciating the requirement of advanced tool-room for manufacturing industries, an Indo-Danish tool room and training centre has been set up in Jamshedpur.
Besides, the State Government plans to set up and promote three-tier growth centres at the mega, mini and micro levels.
31

‡

INFRASTRUCTURE STATUS Jharkhand

Industrial infrastructure « (2/2)
‡ Jharkhand

has three industrial area development authorities with headquarters at Adityapur, Bokaro and Ranchi. Another such development authority is being formed at Santhal Pargana.

‡

These authorities are responsible for acquisition of land and development of infrastructure facilities such as road, drainage, park, water supply and public utilities, within their jurisdiction.
Adityapur Industrial Area Development Authority (AIADA) 33,970 1,365 142 893 Ranchi Industrial Area Development Authority (RIADA) 1,524 682 284 540

Parameters Controlled area Allotted plots (No) Allotted sheds (No) Units established (No)

Major industries

Engineering (machining fabrication), mines- and Heavy and light engineering , ferro-casting, mineral-based units, chemicals, electrical and chemicals, plastic and rubber, forging and electronics, metallurgy (foundry and forge), mineral-based units. casting and rolling, plastics and rubber.

Sources: www.aiada.in, www.riada.in

32

INFRASTRUCTURE STATUS Jharkhand

Infrastructure investment
‡ As

of December 2008, investments in Jharkhand¶s infrastructure sector were over US$ 10 billion.

Infrastructure type Power*

Investments (US$ million) 9,451.3 148.2 519.6 10,119.1

‡

Around 93 per cent of the investments in infrastructure were in the area of power generation and distribution.

Roads Railway Total
*Generation and distribution Source: CMIE

‡

The other sectors attracting investments were railways and roads.

33

JHARKHAND

Contents 
Advantage Jharkhand  
State economy and socio-economic profile  

  
  

        

Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 

34

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (1/6)
Industrial Policy, 2001 Objectives: To develop infrastructure, reduce the number of regulations and enable speedy-clearances of new projects. Key goals: ‡ To rationalise fiscal concessions and provide adequate infrastructural support at a reasonable cost for an effective industrial sector.
‡ ‡ ‡ ‡ ‡ ‡ ‡

To simplify rules, regulations and procedures for smooth functioning of the industrial sector. To introduce latest, scientific data-collection systems to make the planning process more realistic. To make the single-window clearance system more effective. To ensure timely and adequate flow of credit to industries, especially, in the SSI sector. To diagnose incipient sickness and initiate timely measures for revival of sick units. To develop µcraft villages¶ and organise µcraft bazaars¶ to facilitate adequate access to market for artisans and craftsmen. To encourage horticulture, fruit-, vegetable- and spice-processing industries by providing special incentives and basic infrastructure to these industries. To develop industrial parks ± for specialised activities in sectors such as IT, tussar and mulberry silk, electronics, plastic, chemicals, biotechnology, herbs, exports and food-processing ± with adequate power, water, communication, transport and other common facilities. To emphasise on small power generation units and develop non-conventional sources of energy through private participation.

‡

‡

35

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (2/6)
Industrial Policy, 2001 (continued) Incentives:
‡ Land/sheds

in growth centres, industrial areas, etc., would be allotted to entrepreneurs, for setting up their industrial units, on 30 year annual lease with renewal facility. Assistance to the entrepreneurs in acquiring land for locating industrial units outside industrial areas and growth centres. Capital investment incentives of 15 to 25 per cent to be given to small- and medium-scale industries respectively, subject to a limit of US$ 50,000.

‡ ‡

‡ ‡ ‡

Captive power generation incentive to be provided in the range of 15 to 25 per cent, subject to a limit of US$ 8,000. Interest subsidy to be given in the range 25 to 60 per cent, subject to a limit of US$ 220,000 or 2 per cent of sales in Jharkhand. Exemption from payment of 50 per cent of stamp duty and registration fee for eligible industrial units, irrespective of their location. Partial reimbursement of cost of project report for feasibility study-project, cost incurred on installation of pollution control equipment and cost of obtaining quality certification. Special packages for new projects with an investment of more than US$ 10.9 million, on case-to-case basis, through direct negotiation with prospective investors.

‡

‡

36

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (3/6)
IT Policy, 2004 Objectives: To improve communications and IT infrastructure; focus on developing educational and human resources for effective governance. Goals and initiatives:
‡

JharNet, a state-wide high-speed, reliable and scalable communication link, to be set up by the State Government.

‡ ‡ ‡ ‡

Internet connectivity across the state. Seamless connectivity among various government organisations. Setting up of IT parks. Spreading education to achieve 10 per cent computer literacy in 10 years and 30 per cent in 20 years.

37

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (4/6)
IT Policy, 2004 Key incentives:
‡ ‡
‡

Preferential allotment of land for IT Industry by development authorities. Continuous and uninterrupted power supply for IT industries by providing a dedicated feeder for IT parks.
Allowing self-certification to IT companies under the Payment of Wages Act, Minimum Wages Act, Contract Labour Act, Workmen¶s Compensation Act, Employees State Insurance Act, Shops and Commercial Establishments Act, Payment of Gratuity Act, Employees Provident Fund and Miscellaneous Provisions Act, Maternity Benefits Act and Water and Air Pollution Act.

‡ The
‡ The

single-window system set up for private investment proposals shall be applicable on IT proposals.

rate of sales tax on computer software and hardware shall not exceed the uniform floor rate announced by the State Government.

‡ IT

products produced in the state will be provided quantity and price preference. in IT parks and software technology parks (STP) will be charged the same power tariff as an SSI unit.

‡ Units ‡ ‡

Special package of incentives for IT industries, involving an investment of US$10.9 million or more. Complete exemption from the provisions of Pollution Control Act, both for air and water pollution.

38

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (5/6)
Special Economic Zone (SEZ) Policy, 2003 Aim: To provide a comprehensive framework for the operation and sustainability of SEZs in the state. Key features:
‡ ‡ ‡
‡

Department of Industries is the nodal department of the State Government for development of SEZ. Investors in SEZ are given single-window clearance. Business processes and working environment are simplified.
Each SEZ designates a development commissioner who act as labour commissioner and regulates, facilitates, promotes SEZs.

‡

A committee comprising secretaries of relevant departments to oversee promotion, development and functioning of SEZ.

Key incentives:
‡ ‡

Part exemption on stamp duty and registration fee payments for transfer of land. Exemption from state taxes including sales tax, value added tax (VAT), luxury tax and entertainment tax and state duties on transactions within SEZ. Exemption from electricity duty and tax. SEZs will not require Environment Impact Assessment (EIA) approval. The State Government will process the requirement of extra state police, fire services and home guard structure for SEZ(s) for the maintenance of law and order.

‡ ‡ ‡

39

STATE POLICIES AND INCENTIVES Jharkhand

Sector-specific policies « (6/6)
Purchase Policy, 2007 Aim: To ensure that all purchases meant for store requirements by state government departments and institutions are made from within the state. Key initiatives:
‡ To

ensure that all administrative departments and agencies under the control of the State Government ± heads of departments and offices subordinate to them, boards, corporations, development authorities and municipalities, notified area committees, cooperative bodies and institutions aided by the State Government and companies in which the Government¶s share is 50 per cent or more ± procure their requirement of store items from within the state. To make purchases from the exclusive vendor list identified by the State Government. For specific items not included in the exclusive list and manufactured by a local enterprise, separate rate contracts to be executed. Purchases to be made on open tender. All purchases to be made exclusively from dealers/suppliers registered under the Jharkhand Value Added Tax (VAT) Act, 2005

‡ ‡

‡

40

JHARKHAND

Contents 
Advantage Jharkhand   State economy and socio-economic profile   Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 
Logos used in this section are registered trade marks of the respective companies 

             

41

BUSINESS OPPORTUNITIES Jharkhand

Mining and metals industry
‡ Jharkhand

is a mineral-rich state; about 40 per cent of India¶s mineral reserves are available in the state.

Key players
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

‡

Jharkhand¶s mineral reserves include iron ore, coal, mica, copper, bauxite, uranium and limestone. The principal export destinations for Jharkhand¶s minerals are Bangladesh, Nepal, South Africa and Saudi Arabia. Mica belts of the state are located in the Koderma reserve forest area, Chatkri, Dhab, Jhumri Tilaiya and Giridih town.
Copper deposits are mostly concentrated in the Rakha, Kendadih, Surda, Pathargora and Mosaboni areas of the East Singhbhum district.

‡

Hindustan Copper Limited Tata Steel Steel Authority of India Limited Hindalco Industries Limited Jindal Steel & Power Limited Coal India Limited Usha Martin Limited Ramkrishna Forging Limited District location Dhanbad, Koderma West Singbhum, Chatna, Garhwa West Singhbhum

Key minerals Mica Graphite Manganese

‡

Lead and silver Saraikela Kharsawan, Gumla
‡

Copper Aluminium

Saraikela Kharsawan, East Singbhum, Dumka Lohardaga, Gumla, Palamau, Koderma

42

BUSINESS OPPORTUNITIES Jharkhand

Mining and metals industry ± company profiles « (1/2)
Hindustan Copper Limited
‡

Hindustan Copper Limited was incorporated in 1967 to take over plants and mines in Rajasthan and Jharkhand from the National Mineral Development Corporation Limited. The company is engaged in activities ranging from mining, beneficiation, smelting, refining and production of cathodes, wire bars and continuous cast rods. It operates the Indian Copper Complex with capacity of 19,000 tonnes per annum (TPA) at Ghatsila in Jharkhand. Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. It has captive raw material resources and a state-of-the-art plant in Jamshedpur with a capacity of 5.84 million tonnes per annum (MTPA). In 2008-09, the company produced 5.37 million tonnes of saleable steel. SAIL is one of the leading steel-making company in India and owned by the Government of India. The company operates a steel plant at Bokaro in Jharkhand where the production capacity is being increased from 4.5 MTPA to 7.4 MTPA. SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) as well as an in-house centre for engineering and technology, a management training institute and a safety organisation at Ranchi. HIL, a part of the Aditya Birla Group, is one of the largest producers of primary aluminium and copper in Asia. Hindalco's alumina refinery with 450,000 TPA capacity is located at Muri. It has the distinction of being the first alumina refinery in India . The company also has a 30 mega watt captive power plant.
43

‡

‡

Tata Steel

‡ ‡

‡

Steel Authority of India Limited (SAIL)

‡

‡

‡

Hindalco Industries Limited (HIL)

‡

‡

BUSINESS OPPORTUNITIES Jharkhand

Mining and metals industry ± company profiles « (2/2)
Jindal Steel & Power Limited (JSPL)
‡

JSPL is a leading player in steel, power, mining, oil and gas and infrastructure ,with an annual turnover of over US$ 2.1 billion. The company is setting up a 6.0 million tonnes per annum (MTPA) steel plant and 1,609 mega watt captive power plant at Patratu and it plans to set up a 5.0 MTPA steel plant and a 1,000 mega watt captive power plant at Asanboni, Jharkhand. CIL, a Government of India undertaking, contributes 85 per cent of the total coal production in India and has three subsidiaries in Jharkhand. Central Coalfields Limited is headquartered in Ranchi and operates 63 mines. Bharat Coking Coal Limited is headquartered in Dhanbad and operates 78 coal mines in Jharkhand. It meets 50 per cent of the total coking-coal requirement of the integrated steel sector in the country. The Central Mine Planning and Design Institute is located in Ranchi and has been providing consulting services to the coal industry in India and abroad for 30 years. Usha Martin Limited is the flagship company of the Usha Martin Group. The group has three principal manufacturing divisions: wire and wire ropes, steel and cables. It has a 350,000 tonnes per annum wire-rod rolling mill and a captive power plant at Jamshedpur. Ramkrishna Forgings Limited was founded in1981. The company produces screw couplings, draw gear assembly, snubber assembly, hanger, block hanger side frame key and various other forgings items for automobiles, railway coaches and wagon. Some of its clients are Tata Motors, Ashok Leyland, Eicher, Audi, Hindustan Motors, Telcon, BEML, Indian Railways, TAFE, GE, Timken and BHEL.

‡

Coal India Limited (CIL)

‡

‡ ‡

‡

Usha Martin Limited

‡ ‡ ‡

Ramkrishna Forging Limited

‡

‡

44

BUSINESS OPPORTUNITIES Jharkhand

Engineering industry
‡

The major growth drivers of engineering industry in Jharkhand are availability of raw material (iron and steel, aluminium, copper and other metals and non-metals), power, water and industrial labour.

Key players
‡
‡

Heavy Engineering Corporation
McNally Bharat Engineering Company Limited

‡

TRF Limited Timken India Limited SNL Bearings Mecon Limited Tinplate Company of India Limited (TCIL)

‡

A number of heavy-engineering companies located in the state produce equipment and provide turn-key and consulting services to the existing metal and mining industry .

‡ ‡ ‡ ‡

45

BUSINESS OPPORTUNITIES Jharkhand

Engineering industry ± company profiles « (1/2)
Heavy Engineering Corporation (HEC)
‡ ‡

HEC was established as a public sector undertaking by the Government of India in 1958. The company has a heavy machine building plant, a foundry forge plant and a heavy machine tools plant all at Hatia, Ranchi.

McNally Bharat Engineering Company Limited (MBE)

‡

MBE is one of the leading engineering companies in India. It is engaged in providing turnkey solutions in the areas of power, steel, alumina and material handling. Over 250 plants have been constructed on turnkey basis by MBE. One of its heavy fabrication units and the machine shop facility is based at Kumardhubi in Jharkhand. TRF Limited, the erstwhile Tata Robins Fraser Limited, was incorporated in 1962 and is part of the Tata Group. The company mainly produces material handling equipment and has a plant at Jamshedpur in the East Singhbhum district. Timken India Limited is a subsidiary of The Timken Company, USA. The company¶s principal activity is production of tapered roller bearings at its Jamshedpur plant. Timken provides friction management solutions for a wide range of industry applications.

‡ ‡

TRF Limited

‡

‡

Timken India Limited

‡ ‡

‡

46

BUSINESS OPPORTUNITIES Jharkhand

Engineering industry ± company profiles « (2/2)
SNL Bearings Limited (SNL) ‡ SNL is a major needle-bearings manufacturer. It was promoted as a joint venture between the Shriram Group and the INA Bearings Group of Germany. In June 2000, the company¶s name was changed to SNL Bearings Limited after it was acquired by NRB Bearings. ‡ SNL is equipped with state-of-the-art technology because of its technical collaboration (from 1983 until 1997) with INA Germany. ‡ The company has a plant for manufacturing needle bearings at Ranchi; the unit employs about 200 people. ‡ SNL has successfully developed and introduced cage-guided drawn-cup needle bearings, connecting rod needle cages for piston-pin and crank-pin applications along with other types and ranges of needle bearings. Mecon Limited
‡

Mecon Limited is a public sector undertaking under the Ministry of Steel, Government of India, with interest in metals, power, oil and gas, and infrastructure sectors. Mecon is an engineering, consultancy and contracting organisation and offers a range of services required for setting up of projects from concept to commissioning, including turnkey execution. The company employs 1,250 engineers, scientists and technologists. TCIL is the largest indigenous producer of tin-coated and tin-free steel sheets in India. The company has a manufacturing plant in Jamshedpur and has 12 office and 17 stocking points across India. The company has established markets abroad such as in Southeast Asia, the Middle East and some developed countries in Europe.

‡

‡

Tinplate Company of India Limited (TCIL)

‡ ‡

‡

47

BUSINESS OPPORTUNITIES Jharkhand

Chemicals industry and company profiles
‡ The

chemical industries in Jharkhand produce wide range of chemicals such as caustic soda, dye and pigments and industrial and medical gas. The industry has developed to serve other manufacturing units in the region and the markets of Eastern India.
‡

Aditya Birla Chemicals (India) Limited

Aditya Birla Chemicals (India) Limited (formerly, known as Bihar Caustic and Chemicals Limited) is one of the leading chlor-alkali companies in India. The plant was commissioned in 1984 and is located in the Palamau district of Jharkhand. Its product range includes caustic soda lye, liquid chlorine, hydrochloric acid, sodium hypochlorite, compressed hydrogen gas, aluminium chloride and stable bleaching powder. The company also has a state-of-the-art 30 mega watt captive power plant for uninterrupted power supply. Formed in 1927, Tata Pigments Limited is one of the largest producers of synthetic iron oxide pigments in India. The company has a manufacturing plant in Jamshedpur. In 2008-09, it produced 3,411 tonnes of oxides of iron in its Jharkhand plant. The company has nine sales offices across the country. BOC India started operations in 1935 as Indian Oxygen and Acetylene Company and is presently a subsidiary of the Linde Group. The company produces industrial gas, medical gas and specialty gas that it supplies across the country. The company also carries-out special projects. One of the three separation units of the company is located in Jamshedpur. It is one of Asia's largest units with a capacity of 1,250 tonnes per day.
48

‡ ‡

‡

Tata Pigments

‡

‡

‡

BOC India

‡

‡

‡

BUSINESS OPPORTUNITIES Jharkhand

Cement industry and company profiles
‡ ‡

Jharkhand has around 5.1 million tonnes per annum (MTPA) of installed cement capacity. The total cement production in Jharkhand was 4.61 MTPA in 2009. Between 2001 and 2009, the industry in Jharkhan has grown by about 20 per cent, in terms of consumption. The major cement companies in Jharkhand are ACC and Lafarge.

‡

ACC Limited

‡

ACC Limited is one of the largest cement manufacturer in India with a country-wide network of factories and marketing offices. The company has two plants in Jharkhand ± one at Chaibasa with capacity of 870,000 tonnes per annum (TPA) and another at Sindri with a capacity of 910,000 TPA. Lafarge India is a subsidiary of the French building materials major, Lafarge, which entered the Indian cement market in 1999 with the acquisition of cement business of Tata Steel. Lafarge has three cement plants in India, of which one is located at Jharkhand with grinding capacity of 3.4 MTPA. The plant serves the cement market in Eastern India.

‡

Lafarge

‡

‡

‡

49

BUSINESS OPPORTUNITIES Jharkhand

Automotive industry and company profiles
‡

The automotive industry in Jharkhand includes original equipment manufacturers as well as auto component production units. The auto components produced range from simple items such as nuts and bolts to complex ones such as shafts, radiators, and axles.

‡

Tata Motors Limited

‡

Tata Motors Limited is one among India's largest automobile companies and has a global presence. It is one of the leaders in the commercial vehicles and the passenger vehicles markets in India. The company¶s manufacturing base is spread across India; it has a plant at Jamshedpur in Jharkhand. In 2007, the company acquired two prestigious international brands (Jaguar and Range Rover) from Ford Motors and, in 2009, launched the cheapest passenger car in the world, the µNano¶. Apex Auto was incorporated in 1994 and manufactures excavator components. Its manufacturing plant is located at Adityapur near Jamshedpur. The company manufactures automobile ancillaries, ancillary gear boxes, axle components, gearboxes and excavator components. Its plant is located at Adityapur in Jharkhand. JMT exports products to Europe and America, besides supplying to large industries such as Tata Motors, Telcon, TAFE, L&T, and Caterpillar in India.

‡ ‡

‡

Apex Auto Limited

‡ ‡

JMT Auto Limited

‡

‡

50

BUSINESS OPPORTUNITIES Jharkhand

Agro-based industry and company profiles
‡ ‡

Jharkhand has a varied agricultural product-base that support a host of agro-based industries. The state¶s soil and climatic conditions also support the cultivation of ornamental plants, mushrooms, spices and tea. The state also has a large sericulture base and accounts for 40 per cent of the country¶s production of tussar, a non-mulberry silk.

‡

IVP Limited

‡

IVP Limited is a diversified company, engaged in the production of a variety of items such as vanaspati and vegetables oils, industrial chemicals (epoxy plasticizers and esters), foundry chemicals (alkyd resins, phenolic-resins, dressings and fluxes), advanced ceramics and spark plugs. One of IVP¶s manufacturing plants is located at Jamshedpur in Jharkhand. Established in 2001, We Group is a food processing unit in the small-scale sector. It produces and distributes fresh mushrooms, mushroom seed and pickles. We Group has a plant in Dhanbad and an upcoming plant in Dugda, which is expected to be commissioned in 2010. The company produces 300 kg of mushrooms per day and has plans to expand capacity to metric tonne per day.

We Group Mushroom

‡

‡

‡

51

BUSINESS OPPORTUNITIES Jharkhand

Major industrial projects being implemented « (1/2)
Project Integrated steel (Jamshedpur) project -Phase II Kahalgaon-north Karanpura-Barh composite transmission line Integrated steel (IISCO) project Integrated steel (Bokaro) project Coal based power project Bokaro steel plant - expansion Sector Iron and steel Power distribution Iron and steel Finished steel Power Finished steel Promoter Tata Steel Limited Power Grid Corporation of India Limited Steel Authority of India Limited Electrosteel Integrated Limited Adhunik Power & Natural Resources Limited Steel Authority of India Limited Investment (US$ million) 3,043.5 2,000.0 1,762.4 1,578.7 1,087.0 1,521.7 Location Jamshedpur Kahalgaon, Barh, North Karanpura Burnpur, Chiria Siyaljori Ramchandrapur Bokaro Steel City

52

BUSINESS OPPORTUNITIES Jharkhand

Major industrial projects being implemented « (2/2)
Project Integrated aluminium project -Phase II Coal bed methane (West Ranigunj and Jharia) project* Rural electrification (Jharkhand) project - RGGVY Ranchi-Lohardaga-Tori railway line Sports complex (Hotwar) Gorhar-Barwa Adda NH-2 road project
Source: projectstoday.com *Partly in Jharkhand

Sector Aluminium Hydrocarbons Power distribution Railways Tourism and recreation Roadways

Promoter Hindalco Industries Limited Oil & Natural Gas Corporation Limited Damodar Valley Corporation South Eastern Railway Government of Jharkhand National Highways Authority of India

Investment (US$ million) 582.0 326.1 148.3 92.4 91.3 87.0

Location Muri Jharia Jharkhand Tori Hotwar Gorhar, Barwa

RGGVY: Rajiv Gandhi Gramin Vidyutikaran Yojana

53

BUSINESS OPPORTUNITIES Jharkhand

Key industrial projects being planned
Project Tilaiya ultra-mega power project Integrated steel (Gumla) project Coal-based power (Jharkhand) project Aluminium smelter (Sonahatu) project Coal-based power (Govindpur-kara) project Coal-based power project North Karanpura power project Coal mining (Magadh and Amrapali) projects Pipeline (Paradip-new Sambalpur-RaipurRanchi) project* Road up-gradation (Barwa adda-Panagarh NH-2) project* Railway wheels and axles project
Source: projectstoday.com *Partly in Jharkhand

Sector Power Finished steel Power Aluminium Power Power Coal/lignite based power Coal Pipelines Roadways Railway wagon and equipment

Promoter Jharkhand Integrated Power Limited Mittal Steel Company N.V. Jindal Power Limited Hindalco Industries Limited Ispat Industries Limited JSW Energy Limited NTPC Limited Central Coalfields Limited Indian Oil Corporation Limited National Highways Authority of India Heavy Engineering Corporation Limited

Investment (US$ million) 3478.3 3260.9 2582.6 1739.1 1739.1 1725.6 1564.5 652.2 389.9 239.3 217.4

Location Tilaiya Gumla Jharkhand Sonahatu Govindpur-Kara, Khunti Baranda North Karanpura North Karanpura Ranchi Barwa Adda Ranchi

54

BUSINESS OPPORTUNITIES Jharkhand

State has various investment opportunities
The various opportunities for investing in the State lay in its advantageous position:       

Responsive administrative set up; Abundance of minerals; Existing industrial base; Skilled and hardworking workforce; Numerous supporting small scale industries; R&D facilities; Reputed technical institutions; Large consumer market; etc.

Given all this, the Government has been making all efforts for maximizing the inflow of capital investment into the State. It has framed several policies and incentives for providing a conducive environment to the investors. The policies intend to give a boost to those industries, which are capable of adding value to the mineral base, forest and agricultural produce as well as to other resources available in the State. Thus, the Government aims to fully explore the hidden potential of the State so as to generate employment, improve the quality of life of the people and thus accelerate overall economic development.

54

DOING BUSINESS IN JHARKHAND

BUSINESS OPPORTUNITIES Jharkhand Investment Opportunities The resource rich State of Jharkhand has an immense potential for investment due to its large mineral deposits, skilled labour force, and responsive administrative set up. It has a well-established industrial base comprising of reputed business houses. The State along with the adjoining areas of West Bengal, Orissa, Bihar and Chhattisgarh, provides a large consumer market. Its renowned technical institutions are a constant source of qualified and efficient man-power base. All this shows that there exist innumerable investment opportunities in several sectors of the State economy. Auto and White goods This sector has several opportunities for investment due to the availability of raw materials at close proximity and a large consumer market for the product both in and around the State. These advantages include:     

Presence of large steel plants as a source of easy freight; World class industries (in and around the State) create an excellent vendor base to support the sector; Several industries like Usha Martin, Timken, Cummins, Tinplate, Indal, etc. produce a wide range of engineering products; Various industrial units involved in activities like mining and coking coal; A good combined market for the sector is provided by Jharkhand along with Bihar, Orissa, West Bengal and Chhattisgarh;

55

BUSINESS OPPORTUNITIES Jharkhand 

Demand for white goods like refrigerators, washing machines, air conditioners, etc is high in the State and is rapidly increasing, etc.

Mineral based industry The State being a rich reserve of mineral resources, it has an immense potential for the growth of mining and mineral based industries. The important minerals available in the State are coal, iron ore, limestone, copper ore, bauxite, pyrite, china clay, kyanite, fine clay, dolomite, graphite, bentonite, soap stone, quartz sand and silica sand. Given this, there are numerable opportunities for the investors, in the following areas:        

Iron ore (export potential); Steel production; Sponge iron plant; Cement plant; Graphite electrodes and graphite powder; Granite (export Potential); Chemicals and fertilizers; Bleaching powder, calcium carbide and lime related chemicals; Ground mica, mica bricks and electrical appliances; etc.

The State Government has been making all efforts to attract investment into this industry. These include, simplification of the procedures with respect to grant of mining leases; provision of certain relief to make mining activities easier; suitable steps for adoption of state of art technology in mining; etc.

56

BUSINESS OPPORTUNITIES Jharkhand Power The availability of coal in abundance makes Jharkhand an ideal state for setting up thermal power plants. The Government of Jharkhand has taken several initiatives for the development of this industry. It has signed Memorandum of Understanding with the Government of India as a token of its commitment to the reforms in the power sector. Rural electrification has been accorded top priority. The work on renovation and modernization of existing power generating stations has already commenced. The State is attracting private investment in the industry for its further growth. There is immense potential for setting up Thermal, Hydel, Geo-thermal, Atomic and Methane and Gas based power plants in Jharkhand. A number of mini and micro hydel power plants can also be set up at various identified places, each of which will provide 1 MW to 10 MW power to the adjacent areas. The government will accord industrial status to these plants. Private sector will also be encouraged to exploit and develop non-conventional sources of energy for power generation such as geo-thermal energy, biomass based power, solar power, wind power etc... Industrial status will also be accorded to these units by the State Government.

57

BUSINESS OPPORTUNITIES Jharkhand The Jharkhand government is committed to open its power sector for private investment and extend all facilities and incentives to investors. An investor friendly industrial policy has been adopted that will ensure all cooperation to an investor. Some of the salient features are:
y y y y y

Help in organizing project prelims Help in dealing with government departments and agencies Expeditious disposal of proposal related matters Help in identifying local agencies for association in the project One person of the Board will coordinate all matters related with IPP proposals to act as single window

Above all, an Entrepreneur is considered a most valuable visitor to the board. Total exemption from sales tax on a wide range of equipments operated by nonconventional energy such as ±
y y y y

Solar energy equipments Wind mills and specially designed devices on wind mills Equipments for utilizing geo-thermal energy Electricity operated vehicles including battery powered or fuel cell powered vehicles

58

BUSINESS OPPORTUNITIES Jharkhand
y y y

Two tier tariff system available Maximum connected load to be converted into Maximum Demand Load DPS @ ½ % per week in place of 2% per month

Tourism The Jharkhand Government has accorded 'industry status' to the tourism sector and has initiated various steps to attract investment into it. For the purpose, it has been offering several incentives for the provision of certain tourist facilities by the private investors. This includes:- hotels & motels; yatrika & yatriniwas; tourist resorts; camps & facilities for adventure tourism; aerial ropeway; amusement parks; etc. There are various places of tourist attraction in the State, which include:- Ichagarh Bird Sanctuary; Udhava Bird Sanctuary-Sahibganj (Pathara Lake); Chachro Crocodile Breeding Centre±Koderma (Tilaya Dam); Chandrapura Bird Sanctuary; Jawaharlal Nehru Zoological Garden (Bokaro); Tenughat Bird Sanctuary; Dalma Wild Life Sanctuary (Jamshedpur); Tata Steel Zoological Park (Jamshedpur); Palkote Wild Life Sanctuary (Gumla); Bhagwan Birsa Zoological Gardens (Ranchi); Birsa Deer Sanctuary (Kalmati Ranchi); Betla National Park (Palamau); Ranchi Aquarium (Ranchi) and Hazaribagh National Park; Tatoloi hot water stream (Dumka) and Saranda Forest. Besides, there are some famous temples like Jharkhand Dham; Langta Baba Temple/Majar; Bindhvashini Temple; etc.

59

BUSINESS OPPORTUNITIES Jharkhand

Information Technology (IT) The Government considers IT as an agent capable of transforming the State into a knowledge based society. It has resolved to make Jharkhand an IT powerhouse and a front runner in the IT revolution. In order to fulfil these objectives, it has formulated an IT policy. The underlying vision of the policy is 'to ensure overall socio-economic development, sustained growth, transparency in government decisions, and enhanced service delivery to the people through an effective use of IT". The Government has also provided special incentives for the IT industry subject to the prescribed conditions. These include:- (i) exemption from environmental clearance; (ii) exemption from zoning regulations for purposes of location; (iii) self-certification for purposes of compliance with certain Acts; (iv) general permission to run a three-shift operation; (v) rebate in the cost of land allotted to an IT Industry subject to the prescribed conditions; etc.

60

BUSINESS OPPORTUNITIES Jharkhand Aviation industry After the creation of Jharkhand State, programmes are being implemented to provide better structural & technical facilities for existing airports & air transport systems within the State. The Jharkhand Flying Institute is the only DGCA approved organization in Jharkhand for providing training facilities to pilots and Aircraft maintenance engineers. y State Aviation intends to develop & modernize in-depth evaluation to ensure that Aviation standards comply with Civil Aviation Safety Requirements and other DGCA regulations. Strategies : y Construction of new airstrips in 12 districts of the state for better and fast connectivity within the state thus facilating landing of Boeing and other bigger aircrafts.
y y y y y y y

Strengthening and extension of existing seven airstrips in the state. Induction of one police-version helicopter for better surveillance and rescue operations. Induction of one VIP version Helicopter for VVIP Movement within the state. Purchase of one twin engine aircraft for VVIP flying + multipurpose role within and outside the state. Creation of Jharkhand flying Institutes in 4 places for training of youth of Jharkhand as pilots on PPP basis. To provide air transport facilities for tourism and medical evacuation on commercial basis 61

BUSINESS OPPORTUNITIES y Jharkhand Other Sectors Investment potential also exists in the following industries:(i) In case of agro-based industries, opportunities exists in cattle feed; jute, hemp, sisal and other fabrics; tea cultivation, processing and packaging; paper; floriculture and horticulture. (ii) In case of handlooms and handicrafts, export potential exists for the traditional products produced by the people of the State. The Government has been providing several incentives to boost this sector, in the form of infrastructural support, institutional support, training to weavers, supply of raw materials and equipments, marketing support, etc. (iii) In case of khadi and village industries, the Government has accorded priority to the sector so as to promote a self-reliant rural economy. For this purpose, it has been making provision for training, financing and marketing support, etc. (iv) In case of forest based industry, the Government plans to encourage R&D in order to increase the use of forest produce. The various forest produce available in the State are mahua seed, sal seed, shellac, bamboo, kendu leaf, harre, bahera, etc.

62

Contents 
Advantage Jharkhand  
State economy and socio-economic profile  

  
  

        

Infrastructure status   State policies and incentives   Business opportunities   Doing business in Jharkhand 

63

DOING BUSINESS IN JHARKHAND Jharkhand

Key approvals required
Approvals and clearances required Department Department of Industries, Government of Jharkhand, and district collector Industrial Area Development Authority and local bodies Jharkhand State Electricity Board (JSEB) State water supply board and industrial area authority Chief inspector of factories Revenue department, Government of Jharkhand Labour department, Government of Jharkhand Labour department, Government of Jharkhand Labour department, Government of Jharkhand Labour department, Government of Jharkhand

Allotment of land/acquisition of land/change of land use Approval of building plan Release of power connection and consent for setting up captive power plant Release of water supply Registration as a factory Sales tax registration Registration under Trade Union Act Registration under Shops and Establishments Act Registration under Industrial Disputes Act Registration under Minimum Wages Act/State Employee Insurance Act

64

DOING BUSINESS IN JHARKHAND Jharkhand

Cost of doing business in Jharkhand
Cost parameter Land (per sq ft)* Labour cost (per man year) Hotel costs (per room per night) Residential space (per sq ft) Power (HT energy charges) Water (per 34,000 litres)
*Ranchi and Jamshedpur HT: high-tension

Cost estimate US$ 11 to US$ 23 US$ 825 to US$ 1,275 US$ 45 to US$ 110 US$ 26 to US$ 37 US 8.2 cents per kWh US$ 3 per 34,000 litres

Source Department of Industries Labour Resources Department, Government of Bihar Leading hotels in the state Property dealers JSEB Department of Industries

65

DOING BUSINESS IN JHARKHAND Jharkhand

Single-window clearance mechanism « (1/2)
‡

The Government of Jharkhand has implemented a single-window clearance system (SWS) for faster and one-point clearance of industrial projects, single-point dissemination of industrial projectrelated information and streamlining of inspection of industries by different agencies/authorities.
At the state level, a committee has been formed under the chairmanship of the chief secretary, with secretaries from all departments concerned and representatives from banks and financial institutions as members, to facilitate speedy clearances for mega projects (investment above US$ 11million).

State-level singlewindow clearance committee

Chief Secretary of Jharkhand

‡

District-level singlewindow clearance agency

Director of Industries

66

DOING BUSINESS IN JHARKHAND Jharkhand

Single-window clearance mechanism « (2/2)
‡A

similar committee has been constituted at the district level under the chairmanship of the director of industries to review the progress of all investment proposals received.
from various departments (industries, land and revenue, commercial tax, labour and employment, forest and environment, JSEB, Jharkhand State Pollution Control Board, and Damodar Valley Corporation) have been deputed to the SWS office to facilitate its smooth functioning.

‡ Officers

67

DOING BUSINESS IN JHARKHAND Jharkhand

Key nodal agencies in Jharkhand « (1/2)
Department of Industries
‡

The objective of this department is to accelerate economic development by facilitating investments in industries and infrastructure, developing required human resources for industrial employment, and supporting small and rural industries, artisans and craftsmen. The department formulates plans, policies, acts and rules, and undertakes developmental activities. It is responsible for the expansion of generation, transmission and use of electricity. The department has different corporations, authorities and undertakings such as Jharkhand State Electricity Board (JSEB), Tenughat Vidyut Nigam Limited, Jharkhand Renewable Energy Development Authority and the electricity licensing board, under its supervision. The Adityapur Industrial Area is situated in the district of Seraikela Kharsawan, near Jamshedpur. AIADA controls an area of about 53 sq miles. It has so far developed 1,365 plots and 142 industrial sheds. There are 893 operating units in the AIADA-controlled area, which provide employment to about 27,900 persons. Between 2003-04 and 2007-08, the investment on infrastructure in AIADA was about US$ 8.4 million. AIADA provides land, water, electricity and technical expertise to assist in the setting up of units in the industrial area.

Department of Energy

‡

‡ ‡

Adityapur Industrial Area Development Authority (AIADA)

‡

‡ ‡ ‡

‡

68

DOING BUSINESS IN JHARKHAND Jharkhand

Key nodal agencies in Jharkhand « (2/2)
Bokaro Industrial Area Development Authority (BIADA) Ranchi Industrial Area Development Authority (RIADA)
‡ ‡

BIADA is located in Bokaro Steel City, which has several small-scale industrial (SSI) units. BIADA provides most of the industrial supplies for SAIL¶s Bokaro steel plant, which is the catalyst for the industrial units in BIADA. RIADA controls industrial areas spread over the nine districts of Ranchi, Hazaribagh, Koderma, Palamu, Garhwa, Lohardagga, Khunti, Ramgarh and Gumla. Total 16 industrial estates, covering 1,524 acres have been developed by RIADA. It has over 177 acre area for further allocation. RIADA has allocated 682 plots of which 540 are in operation and 92 are under construction. RIADA provides land, water, electricity and technical expertise to assist in setting up industries. After the formation of Jharkhand in 2000, JSEB was formed as a separate entity from the Bihar State Electricity Board (BSEB). Apart from generating electricity, JSEB is involved in transmission and distribution throughout the state.

‡

‡

‡ ‡

Jharkhand State Electricity Board (JSEB)

‡

‡

69

DOING BUSINESS IN JHARKHAND Jharkhand

Contact list
Agency Contact information Nepal House, Doranda Ranchi - 834001, Jharkhand Phone: 91-651-2491 844 Fax: 91-651-2491 884 E-mail: contact@jharkhandindustry.in Website: http://jharkhandindustry.gov.in Vikas Bhawan Adityapur, Jamshedpur ± 831013, Jharkhand Phone: 91-657-2371 646/460 E-mail: secy_inds@ap.gov.in Website: www.aiada.in RIADA Bhawan Main Road Ranchi - 834 001, Jharkhand Phone: 91-651-2208407 Fax: 91-651-2208407 Website: www.riada.in

Department of Industries, Government of Jharkhand

Adityapur Industrial Area Development Authority (AIADA)

Ranchi industrial area development authority (RIADA)

70

DOING BUSINESS IN JHARKHAND Jharkhand

Annexure
Exchange rates
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 INR equivalent of one US$ 46.6 48.3 48.0 45.6 43.7 45.2 45.0 42.0 40.2 46.0

Average for the year

71

71

SWOT ANALYSIS STRENGTH 1. Various small scale supporting industries present in the state 2. Easy availability of raw materials for various industries 3. Research and development facility in big cities such as bokaro,ranchi,jameshedpur. 4. Huge developing market for the sectors such as automobiles, real estates, electronic goods, and power generation companies. 5.40% of total mineral ore comes through this state giving a great base for various industries. 6. The location based advantage: Jharkhand is an ideal location for EOUs interested in emerging markets of South East Asia, because of freight advantage. 7. There is logistics advantage in catering to markets within & adjoining states of West Bengal, Orissa, and Bihar & Chhattisgarh, whose combined population is 25% of the country¶s population. 8. Labour availability is good in the state, because of the industries such as TATA, SAIL and RUNGTAS are present for many decades, and the labors are mostly industrial in nature. 9. Supportive labor union, culture of one union, in one company. 10. Simplified procedures for granting mining leases. 11. Joint venture projects with Jharkhand state mineral development corporation encouraged. Expeditious clearance of mining lease applications and project report.

WEAKNESS
1. Condition of law and order is bad due to naxalites. 2. Great instability in political sphere, in past 7 years 6 council of ministers has changed. 3. under development in comparison to other states. 4. Land allotment in the areas of advises is quiet difficult,arcellor Mittal case is such an example. 5. Availability of electricity in some of the areas can be a problem.

OPPORTUNITY
1. Huge developing market for the sectors such as automobiles, real estates, electronic goods, and power generation companies. 2. Joint venture project with jharkand state mineral development corporation encouraged. Giving ample opportunity to the private players. 3. Jharkhand is an ideal location for EQUs interested in emerging markets of south east asia, because of freight advantage. 4. Being a state rich in minerals an raw materials it give advantage in cost cutting through logistics. 5. Huge market as Jharkhand location is such that it holds borders with west Bengal, Orissa, Bihar &Chhattisgarh whose population is around 25% of the country. 6. Discovering of methane gas in bokaro district has interested the petroleum companies. 7. Real estates development in various cities, sahara city is such an example. 8. Cement plant in view of infrastructure developments. 9. Potential to use slag from steel plants. 10.chemical &fertilizer-steel plant generated coal tar & phospahte based fertilizers. 11.uraniam has been found in some parts of state paying way for nuclear palnts.

Threat
1.law and order situation in the state is the biggest threat to the industries. 2.politicial instability cause¶s weakingh of trust amongset the investor 3.influence of naxals over the villagers causes problems in land alootments.

Conclusions and recommendation:
Jharkhand is formally carved out from Bihar yet it remains one of the lading mineral producing states in Indian.a beautiful land with picturitic valleys, dense lush green forests has a large deposit of mineral. The new state is endowed with rich mineral resources and occupies unique position in mineral production and mineral based industries. As regards the investment climate is concerned there is plenty of opportunity available for the setting up of plant and industries, of sectors such as petroleaum,power generation, nuclear energy, mining etc.the discovery of methane gas, found in district bokaro one of the prominent sectors due to the scope of real estate industries such as sahara city. If the mining and other industrial activities are followed in a well a integrated planned, environmentally benign way in a time manner then I will lay to economically beneficial in sustainable way .planned development is essentially not only for fulfilling the inspiration of the people for the sustainable source of livelihood but also for the protecting the resource base and enhancing the environmental quality in region.

Limitation of the study: 
Some of the data are outdated which do not provide us with the Clare indication of the current scenario    The study is limited of the scope of data publicity available. In depth study of the project was not possible due to short of time There was difficulty in gathering information due to communication problem.

Refrences: Websites:
www.jharkhand.job.in www.ibef.com www.jharkhand industries. In www.google.com

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.