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Service Sector

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Gujarat: A Thriving Industrial State
Contributing to India’s economy across all major Presence Across Industry Sectors
sectors…
Population 5% Petroleum products 34%
Geographical Area 6%
Chemical & Pharma 23%
Employees 9.50%
Engineering 17.6%
Factorories 9.90%
Food processing 10.3%
Net Value 14%
Value of Output 15.60% Textiles & Apparels 6.3%

Fixed Capital Investment 17% Mineral based industries 2.50%


Exports 19.20% Others 6.30%
Longest Coastline 22%
Stock market capitalisation 30%
Soda Ash Production 98%
Salt Processing 85%
Diamond Processing 80%
…India’s largest producer of cotton
Plastic Industry 65%
Petrochemicals 58% …World’s 3rd largest producer of denim
Chemicals 50% …Asia’s largest grass root petroleum refinery at Jamnagar
Groundnut 42.30% …India’s first LNG Chemical Port Terminal at Hazira
Cotton 35%
Significant share in …World’s largest producer of castor and cumin
Pharmaceuticals 28%
key industry sectors …World’s largest gas based single location sponge iron plant
Sea Cargo 25%
& products
Textiles 18% …World’s largest producer of processed diamonds

Source: Socio Economic Review 2007-08


Gujarat: Economic Snapshot

Gujarat An Enduring Strong Economy

Gross State Domestic Product(GSDP) : USD 45.3 Billion

Per Capita Income : USD 722

Urbanisation : 37.36%

Gujarat has demonstrated a 12.5% high industrial Composition of GSDP as per Economic
Activity
growth rate from 2002 -2007
18.22%
Gujarat is home to 800 large industries & over
44%
3,20,000 micro, small and medium industries P rim a ry S e c to r

S e c o n d a ry S e c to r
37.78%
T e r tia ry S e c to r

Source: Socio Economic Review 2007-08 Growth Rate in 2006-07


Robust Infrastructure
Power 23 Power Plants of Electricity Generation Capacity – 9,561 MW (2007) and
estimated to rise to 14,031 MW (2012)

ƒ Per capita power consumption is 1,354 units whereas India’s average is 665 units
ƒ Rich availability of natural gas (34 MMCD) and Lignite (1,072 MMT)
ƒ 24-hour power supply to 98% of the villages

Only State to carry out interlinking of rivers Water

ƒ An extensive water grid network across the State


ƒ The water grid is a network of 75,000 km for water distribution for irrigation
ƒ 75% population proposed to be covered by the grid by 2010

Total length of the existing GSPL pipeline is 14,53,163.33 meter supplying to


Gas
18 districts
ƒ The pipelines of Gujarat State Petronet Limited (GSPL) supply gas to 13 districts, 5 more districts are proposed
to be connected by the pipeline
ƒ Total length of Integrated Gas Grid supplying gas to all districts is 2,200 km, of which 1,200 km is complete
and 800 km is under construction
Robust Infrastructure
Rail & Road 71% of the road in the State is surfaced

ƒ State-of-the-art road infrastructure such as India’s first National Expressway from Ahmedabad to Baroda.
ƒ Total road length is 74, 111 Km; Target road length is 1,14,866 Km
ƒ Total length of railways in Gujarat is 5,188 km (8.25% of India)

First State to privatize ports


Ports
ƒ 42 ports along 1600 km coastline, including 1 major port at Kandla and 41 minor ports
ƒ Cost efficient transportation of natural gas, crude oil and petroleum products from Middle East and Europe
ƒ Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited, Green field port at
Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej developed by Petronet LNG Ltd.
and Pipapav port developed by Gujarat Pipapav Port Ltd.

Airports
Gujarat is well connected to major cities in the USA, EU, Asia and other Indian
metropolitan cities

ƒ 13 airports under the operational jurisdiction of Airports Authority of India (AAI), at Vadodara, Surat, Jamnagar,
Rajkot, Bhavnagar, Porbandar, Bhuj, Diu, Mandvi, Mundra, Kandla and Palanpur, including one international
airport at Ahmedabad
Service Sector at a Glance
ƒ The service sector consists of the "soft" parts of the economy such as
insurance, government, tourism, banking, retail, education, and social
services. In soft-sector employment, people use time to deploy knowledge
assets, collaboration assets, and process-engagement to create
productivity (effectiveness), performance improvement potential (potential)
and sustainability.

ƒ Typically service sector employment include:

ƒ Hotels & Restaurants ƒ Business services

ƒ Communication (Post/Telecom) ƒ IT/ITes

ƒ Banking & Insurance ƒ Tourism

ƒ Education & HRD ƒ Transport & Storage

ƒ Consulting ƒ Healthcare/hospitals
ƒ Real estate

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India’s Service Sector at a Glance

ƒ India’s service sector is larger and growing India’s growing services sector
70 16000
1985-89
faster than that of economies with higher per 1990-94
60 14000
1995-99
capita GDP as shown in the graph 2000-04
12000
50 2004 per capita GDP

Percent of GDP

Current USD
10000
ƒ Rapidly increasing two-way trade in 40
8000
information technology and information 30
6000

technology enabled services (IT–ITES) and 20


4000

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other high-end services sub-sectors has 2000

0 0
been a critical factor in India’s improved Vietnam India Indonesia China Thailand Malaysia Republic of
Korea

economic performance.

ƒ The service sector recorded a robust 9.1 % average growth, while total GDP grew at 7.0 % in the first
four years of the tenth Five Year Plan (2002–07).

‘[Information Technology (IT) and IT Enabled Services] can do for India what automotives did for Japan
and oil for Saudi Arabia.’ (Noshir Kaka, Principal, McKinsey & Company)

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Indian Service Sector at a Glance

ƒ India’s large pool of engineering talent and its rapidly expanding telecommunications
sector, IT–ITES have in recent years been the key catalyst of growth.

ƒ Growth and improved efficiencies in other key areas, such as financial services,
transportation and transport infrastructure, are vital to facilitating expansion of service
sectors of the economy.

ƒ Services sector has been buoyant through out the fiscal year 2006-07. This can be gauged
from revised estimates of gross domestic product (GDP) for 2006-07 released by central
statistical organisation (CSO), which has projected the real GDP emanating from services
sector to grow at 11 % from over 9.8% of the previous year.

ƒ The ‘trade, hotels, transport and communication’ group is set to grow at 13% during the
same period, registering significant improvement over 10.4% achieved a year ago. .

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Gujarat Service Sector at a Glance
ƒ Service sector in Gujarat is growing at a highest growth Composition of GSDP as per Economic Activity
rate of 15.99% among the other sectors. (2006-2007)

ƒ Services contributed 44 per cent of GSDP in 2007–08


compared with 41.45 per cent based on the earlier 2006- 18.22%

2007.
44%

ƒ The growth of the services sector has been augmented


by increasing industrial activity. 37.78% P r im a r y S e c t o r

S e c o n d a ry S e c to r
ƒ Growth and improved efficiencies in key areas, such as
financial services, transportation and transport T e r t ia r y S e c t o r

infrastructure, are vital to facilitating expansion of other Source: Socio Economic Review 2007-2008
sectors of the economy. Growth across sectors (2006-2007)

GSDP – Sectoral Contribution (%)


S.no. Sector At Current Prices At Constant Prices
Tertiary 15.99%
2005- 06 2006- 07 2005-06 2006-07
1 Primary 20.43 19.11 20.23 18.22
1.1 Agriculture 15.54 14.79 17.21 15.29 Secondary 17.95%
2 Secondary 39.25 38.6 38.32 37.78
Manufacturin
2.1 g 29.62 30.18 29.36 29.89 Primary 11.36%
3 Tertiary 40.32 42.29 41.45 44
Total GSDP 100 100 100 100 Source: Socio Economic Review 2007-2008

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GSDP: Gross State Domestic Product
Gujarat Service Sector at a Glance
Employment Distribution Employment distribution across services sector

ƒ Employment is distributed across service sector 700000


600000
with community, social & personal service 600000

Employment (000)
500000
accounting for 0.6 million followed by transport,
400000
storage and communication 300000
200000 152000
123000
ƒ The total employment in public sector and 56000 52000 51000
100000
private sector has increased from 1.75 million at 0

Community,Social

Electric,Gas &
Insurance, Real
Transport,Storage

Construction

Restaurants,
Estate,Business
& Communication

Wholesale &
the end of June-2006 to 1.80 million at the end

Retail Trade
Financing,
& Personal

Water
Services
of June-2007 growing at 2.33%

ƒ The employment in private sector has increased


to 0.944 million at the end of June-2006 to 1.00
million at the end of June-2007.
ƒ During the year 2006-07, 2.84 lakh persons have registered in the employment exchanges and 0.142
million have placed in employment as against 0.227 million persons registered and 0.131 million persons
placed in employment during 2005-06.

ƒ During the year 2007-08 (April-September-2007) 0.185 million persons have been registered in the
employment exchanges and 0.83 lakh have been placed in employment.

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Education Service
ƒ Gujarat had an effective literacy rate of 61.2% as per Education Infrastructure
1991 census. Gujarat aims to have 100% literacy by 960
2010. Degree Engg. & Hotel Mgmt.

Degree Pharmacy
ƒ Knowledge-based industries have been prominent among
15241
the fastest growing services in Gujarat 19480 Degree Architecture & Allied

MCA
ƒ The provisional number of educational institutions
imparting primary education is 39,064 in 2006-07 MBA/ PGDBM
4005
3405
Diploma Engg. & Hotel
ƒ The total intake capacity for technical education was 260
1530 Mgmt.
14551 seats in degree engineering, 220 in degree
architecture course and 3045 in degree pharmacy course. India’s premier institutes in Gujarat
While in 2007-08, 1140 seats, 40 seats and 660 seats
have been added in degree pharmacy bring total intake
capacity to 15691 seats.

ƒ 31 Universities and 44 degree engineering and 57


diploma colleges provides a pool of quality knowledge
manpower

ƒ Every year 0.7 million graduates are passing through


Gujarat

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Education Service

ƒ With increasing growth of knowledge-based industries and increase in the need for
technical manpower, the state is focusing on the development of a good academic
foundation.

Education Infrastructure Opportunities

ƒ Setting up of short term courses in existing ITI, Polytechnics and Engineering Colleges

ƒ Setting up of anchor Institutes in different focus industry sectors.

ƒ Setting up of Bio-Technology research oriented institutions covering a wide variety of


contract research (pre-clinical and clinical) bioremediation and quality certification /
validation facilities and institutes speciallizing in post graduate courses, specialized courses
and value added courses

ƒ Opportunities in health-care sector to initiate clinical research institutes, Healthcare


Outsourcing (BPO)

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Healthcare Sector
Gujarat Healthcare Infrastructure
ƒ Heathcare is important for having a healthy productive (2005 – 2006)

workforce and general welfare so as to achieve population 4%


17%
stabilization.

ƒ Gujarat is on forefront of establishing and maintaining good

health infrastructure at various levels. Currently 1424 health


Primary Care
institutions are functioning at various levels 1073 primary health
Secondary Care
79% Tertiary Care
centers, 273 community health centers & sub district level
Hospitals in Gujarat
hospitals, 25 district level hospitals and 30 others. (2005-2006)

ƒ Gujarat offers holistic medicinal services and cost effective

treatment through various District hospitals, Sub district Private


Specialty District
hospitals and Private Specialty Hospitals Hospital, Hospital ,
20 25
ƒ Most sought after Super – Specialties in the State include Sub -
Cardiology, Neuro – Surgery, Orthopedics, Infertility treatment, District
Hospital,
joint replacement and eye surgeries 25
Source: Office of Commissioner Of Health : Government of Gujarat

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Healthcare Sector
No. of Registered Doctors (2006)
ƒ During the year 2006-07, 36.918 million patients
41000
were treated in the outdoor while 3.253 million 39461 39734
40000
39000
38013
patients were treated in the indoor through 38000
36831
37000
Government medical institutions
36000 35086
ƒ Gujarat has 13 medical colleges, 39,734 registered 35000
34000
Doctors and 16,816 registered nurses 33000
32000
ƒ The state government’s initiatives in healthcare have 2002 2003 2004 2005 2006

been nationally and internationally recognised:

Chiranjeevi Scheme was awarded the Asian Innovation Award 2006 at the Global Entrepolis Singapore by the
Singapore Economic Development Board. Dataquest e-Governance initiative National Award presented to
Commissionerate of Health and Family Welfare for e-Governance in Integrated Disease Surveillance Project.

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Healthcare Sector
ƒ Gujarat is becoming a preferred medical tourist Medical Tourists visiting India, 2000-2006
destination. About 1,200 to 1,500 Non Resident Indian’s,
250000 230000
Non Resident Gujaratis (NRG’s) and a small percentage
of foreigners come every year for different medical 200000

treatments. Gujarat contributes close to 25-31% of the 150000 140000

total medical tourism business in India. 100000

ƒ Gujarat is evolving in terms of number of hospitals, 50000 40000


10000
healthcare centres, beds and are expected to continue a 0
2000 2001 2002 2003 2004 2005 2006
positive trend in future. Doctor to patient ratio is 1 : 10
and nurse to patient ratio is 1: 5

ƒ Market for tertiary care expected to grow at a faster rate, Benefits of Public Private Partnership
due to rise in income levels, increasing adoption of ƒ Cost Effectiveness, Higher Productivity
health insurance and rise in complex in-patient ailments( ƒ Accelerated Delievery, Clear Customer
Focus
heart diseases, kidney ailments, cancer.
ƒ Enhanced Social Service, Recovery of user
ƒ The State Government is taking several initiatives to charges

make Gujarat a Global healthcare destination

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Information Technology
Emerging IT/ITeS destinations
ƒ Information technology enabled services (ITeS) and IT
hardware industry are the focus growth areas of Gujarat’s
IT industry Gandhi Nagar

ƒ Gujarat currently has about 22,358 professionals in the Ahmedabad

Rajkot Vadodara
sector
Bhavnagar
ƒ Software exports from the State saw a growth rate of Surat

107.3% to reach USD 134 million in FY 2006-07 as


compared to that of FY 2005-06 Software exports (in USD million)

ƒ The IT/ITeS sector turnover should grow from USD 60 134

million in 2005 to USD 2.4 billion in 2010-11


64.64
ƒ The Information and Communication Technology (ICT) 48.86
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sector in Gujarat is projected to see investments of up to


USD 3.7 billion by 2010 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07

Source: DST, Government of Gujarat

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Information Technology
Software Exports (Projected ) IT Manpower (Projected )

1,200 990 991


35,000 30,251
28,235
1,000 30,000 26,353
24,597
750 25,000 22,958
800
568
India’s GDP and the IT20,000
No

600 430 sector

No
15,000
400
10,000
200
5,000
0
0
2007-08 2008-09 2009-10 2010-11 2011-12
2007-08 2008-09 2009-10 2010-11 2011-12

ƒ The projected Software Exports will be approximately 241 million USD in 2011 - 2012

ƒ The State produces around 6,11,909 graduates every year, nearly 14.5% of which can be directly form the
IT workforce base and the rest have the eligibility to be employed in the ITeS sector.

ƒ The state has 37 AICTE approved engineering colleges which produce nearly 13,000 students every year.

ƒ The main focus is on an extensive critical infrastructure and a sound e-commerce foundation plentiful
opportunities in IT enabled services.

ƒ The government has also taken initiatives on Gujarati language software standardization which will help
improve interoperability of software/database among the government departments.

ƒ The state shall provide highest of security for the operation of IT/ITES units.

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Source: Frost & Sullivan
Tourism Sector
Tourist Flow in Gujarat
ƒ Gujarat has immense potential to become a major tourist

Number of Tourists (millions)


destination. Its historical monuments represent the great 14 12.34
religions of Asia – Hindu, Buddhist, Jain, Islamic, Parsee and 12 10.7
10 7.98 7.61
Sikh. 8 6.16
6
ƒ There are more than 400 archaeological sites in the state 4
2
including some of the most substantial excavations of Indus 0

2002-03

2003-04

2004-05

2005 - 06

2006 - 07
Valley civilization period at Lothal (near Ahmedabad),
Surkotada and Dholavira (in Kutch).

ƒ The archaeological zone of Champaner - Pavagadh have


been acclaimed by UNESCO as the “World Heritage Site” IT Manpower (Projected )

because of its great mosques, temples, stepwells and forts.


2%
The Wild Ass sanctuary,Dholavira Harappan City and Rani-
21%
Ki-Vav are in the process of getting status of the World
Heritage site.

ƒ The state has important pilgrimage places like Dwarka,


Somnath, Dakor, Ambaji, Udwada, Navsari and Surat for
77%
Parsees, Palitana, Girnar, etc With in Gujarat OIS * Foreigners

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Tourism Sector
Average Tourist Spend (one person per day)
ƒ More than 2000 Fairs and Festivals are organised every year.
Important state for Event-based tourism especially based on
Navratri, Kite Festival and Tarnetar Fair (The Ternatar Fair Domestic Tourists Foreign Tourists

popularly known as the Trinetreshwar Mahadev Mela revolves $700-


$1250
1050
around the scared temple 'Trinetreshwar‘) Rs. 630
Rs. 500

ƒ The State witnessed total 12.34 million tourists during 2006 – 07


out of which 12.1 million were the domestic tourists and 0.20
million foreign tourists. The average contribution of tourism Gujarat India Gujarat India

industry to the State’s GDP is close to 2.5 %, while the


comparable figure for India is 5.3%. The average foreign tourist
spend per person per day is close to USD 700 to 1050 in Gujarat

ƒ Opportunities for knowledge and leisure, restaurants & cafetarias infrastructure is Junagadh, Bhavnagar,
Modhera, Sidhhpur, Idar, Pavagadh, Adalaj, Vadodara, Dandi, Ranpur, Rajkot, Jamnagar, Dholavira,
Lothal, Morbi, Somnath, Ahmedabad, Vadnagar

ƒ The tourism sector in Gujarat has attracted dozens of hoteliers, because of its proximity to leading tourist
states. Hotels have lined up 2593 USD million worth of investments, which are expected to create 26,370
jobs. Medical tourism is a recent concept in India and Gujarat has been able to match world standards in
almost all areas of treatment.

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Telecom Sector
ƒ There were nearly, 2.36 million telephone connections Telecommunication Snapshot

(including W.L.L.) working in the State. Phones per 100 population (including
WLL + mobile 6.77
ƒ India’s leading GSM players like Vodafone, Idea Phones per sq.km (including WLL +
mobile) 17.48
Cellular, Bharti Cellular, and Bharat Sanchar Nigam Ltd.
No. of Internet Subscribers 146176
(BSNL), have been given licenses to provide GSM
No of Cellphone Subscribers (2006) 7413500
Cellular Telephone Services while Reliance
communication and Tata Telecom have been given
Cellular Subscribers Trend in Gujarat
licenses to provide CDMA cellular telephone services in
telecom circle of Gujarat. 6000 5041
5000
ƒ The state’s share in the countrywide outstanding 4000 3089

000
3000 2073
subscriber base rallied around 7.34%. 2000 1045
1000 467
0
ƒ An investment of 682 USD million is announced in the
2001-02 2002-03 2003-04 2005-05 2005-06
state followed by 60 USD million of proposed investment

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Real Estate Sector
ƒ The industrialization of the state has helped the real estate sector to groom in different cities. The cost
of real estate properties in the cities like Ahmadabad, Gandhinagar, Vadodara, Surat etc are very
encouraging and these have emerged as important sectors for investment.

ƒ The real estate sector has witnessed enormous growth. There are many factors for this like retail,
finance, IT, BPO and telecom, there is a boom in real estate too.

ƒ Gujarat, which has a strong middle class population and one of the highest per capita GDP, is now
becoming a preferred destination for the organized retail sector. This is evident with the spurt of malls
in the state with companies like Prozone that are looking at setting up their first two malls in Rajkot
and Surat before entering other cities in India. Raymond, too, started its first kids apparel store, Zapp,
in Ahmedabad before entering markets like Mumbai and Pune.

ƒ The State offers great road connectivity and reliable power supply to its consumers. It has one of the
highest per capita power consumption (1175 units, as compared to India’s average of 592 units) and
competitive commercial real estate rates in comparison to other states in India.

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Real Estate Sector
ƒ Apparels and jewellery retailing offers tremendous Rental Value Trend*
opportunities for the sector.
160

ƒ Gujarat, which, is the hub for textile and jewellery 120

manufacturing in India is well positioned to exploit 80

this opportunity. 40

0
ƒ With organized retail constituting only 3% of the total 1994 2000 2007

Indian retail, the state offers a huge potential for


* Quoted rentals in existing malls
growth.

ƒ The state aims to increase the availability of


specialized courses like retail management, which
can go a long way to serve the need of quality
human resources

ƒ Brand proliferation witnessed in recent years (last 4-


5 years).

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Civil Aviation

ƒ There is a tremendous growth in passenger traffic in the State.

ƒ Total passenger traffic in the State expanded by 27.2% to 31.5% recorded in the 2006-07.

ƒ The rise in passenger traffic was due to 38.25% hike in domestic passenger traffic to 0.267 million.

ƒ Cargo routed through the state airports revived by 22.96% from a decline of 5.52% recorded during 2006-
07.

ƒ Traffic of domestic passengers gained by a robust 41.47 percent after a 25.8%t.

ƒ A total of 6341 USD million of investment is in pipeline in Gujarat in 2007

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Invest in Gujarat : A World- class Business Destination
To Delhi

Banaskantha

Bio-Tech Cluster
Patan
Mehsana
Soda Ash & Salt Kutch Himmatnagar Gujarat International
Based Industries, Gandhinagar Finance Tec City
Cement & Steel Pipes Ahmedabad
Kheda Panchmahal Knowledge Corridor
Surendranagar
Dahod
202 Industrial Estates Anand Industrial Corridor
across Gujarat (DMIC)
Jamnagar
Vadodara Savli Biotech Park
Rajkot
Petroleum & Brass
parts Porbandar Narmada Petroleum, Chemicals
Bharuch and Petrochemicals
Engineering and Bhavnagar
Investment Region
Amreli
Ceramics Junagadh (PCPIR)
Surat

Soda Ash and Salt Chemicals, Petrochem.


Based Navsari Pharma, Textiles &
Engineering

18 Captive Ports along Special Investment Valsad


Region (SIR) 55 Special
1600 km coastline
Economic Zone
across Gujarat
(SEZs) across
To Bombay Gujarat
Key Contacts

Industries Commissionerate, Government of Gujarat http:// www.ic.gujarat.gov.in

iNDEXTb -Industrial Extension Bureau http://www.indextb.com

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