Punjab

Oct, 2013
Punjab
quoteBy 2013-14, Punjab will have power plants which will generate an additional 2,920 MW of electricity, making it the first state in the country to be power surplus.quote

Shri Parkash Singh Badal
Chief Minister
Punjab

HidePunjab: An Overview

Punjab, a state known for its vibrant culture and tradition, is rapidly witnessing industrialisation through coordinated development of small, medium and large scale industries.

The State's Gross State Domestic Product (GSDP) has increased from INR 96,839 crore in 2004-05 to INR 2,59,424 crore in 2011-12 at current prices. For the financial year 2011-12, the growth rate was 13.14 per cent as compared to previous year1. Further, the Planning Commission has approved State annual plan outlay of INR 14,000 crore2 for the financial year 2012-13.

Punjab is a land of numerous opportunities for making investments. The state has abundant educated & professionally skilled workers, well established export base, hassle-free administrative setup, robust infrastructure including a well-connected intra-transport system, sophisticated telecommunication setup, and an uninterrupted & economic power supply. Ludhiana, a district in the state of Punjab, has been adjudged as the best place for doing business in India as per the World Bank Study, 2009. With the up-gradation of Amritsar International Airport and another International Airport coming up in Mohali, Punjab is geared to be one of the finest and easily accessible tourist as well as business destinations in South Asia.

To attract more foreign investment, the State Government has announced the Industrial policy of Punjab. The policy aims to facilitate complete economic development of the State by providing incentives and attractive schemes to the investors. "Punjab Government has decided to devote the next five to the industrial development of the state, and the new policy would provide impetus for the industrial growth in the state. It is the right time for the NRIs to make investments in the state which would earn them good returns for their investments," as per Shri N K Sharma, State Chief Parliamentary Secretary, Industry and Commerce.

1 Ministry of Statistics and Programme Implementation (March 2012) from http://mospi.nic.in/Mospi_New/upload/State_wise_SDP_2004-05_14mar12.pdf
2 Directorate of Information & Public Relations, Government of Punjab, (Annual plan 2012-13) from http://diprpunjab.gov.in/writereaddata/AnnualBudget/annual%20plan%20vol%202%20book-2012-13.pdf
ShowPunjab Fact File
  • Area: 50,362 sq. km1
  • Capital: Chandigarh, Districts: 221
  • Population: 27,704,236 (Male- 14,634,819, Female- 13,069,417)2
  • Literacy Rate: 76.7 per cent (Male- 81.5 per cent, Female- 71.35 per cent)2
  • Religion: Sikhism, Hinduism, Islam, Christianity, Buddhism, Jainism
  • Languages: Punjabi, English, Hindi, and Urdu
  • Sex Ratio: 893 (females per thousand males)2
  • Gross State Domestic Product (GSDP): INR 2,59,424 crore at current prices in 2011-123
  • Total Road Length: 60881 km, National Highways: 1749 km4
  • Total Railway Network: 2,134 km5
  • Airports: Four (Domestic- Three, International- One)6
  • Telephone Exchanges: 15117
  • Total Installed Power Capacity: 7114.96 MW8
  • FDI (Cumulative Inflows): USD 1,181 million from April 2000 to September 2012 including Chandigarh, Punjab, Haryana and Himachal Pradesh9
  • Total Health Infrastructure (including Hospitals, Dispensaries & Health Centres): 2097 (District Hospitals- 21, Sub Divisional Hospitals- 35, Urban Dispensaries- 88)10
  • Central & State Universities: Eight11 , Private Universities: Six11, Engineering Colleges: 101 (Government promoted- Five, Self-financed- 96)12
  • Special Economic Zones (Notified): Two13
1 Directorate of Information & Public Relations, Government of Punjab (retrieved on October 29, 2012) from http://diprpunjab.gov.in/index.php?option=com_content&view=article&id=66&Itemid=38
2 Census 2011, Government of India from http://www.censusindia.gov.in/2011-prov-results/data_files/punjab/Provisional%20Populatin%20Result%20Punjab1.pdf
3 Ministry of Statistics and Programme Implementation (March 2012) from http://mospi.nic.in/Mospi_New/upload/State_wise_SDP_2004-05_14mar12.pdf
4 Department of Planning, Government of Punjab, (Annual Plan 2012-2013) from http://pbplanning.gov.in/pdf/WRITEUP_AP_2012_13_30_3_12_.pdf
5 Indian Railways Yearbook 2010-11, Ministry of Railways, Government of India (as of 2010-11) retrieved on October 29, 2012, from http://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/yearbook10-11/Year_book_10-11_eng.pdf
6 Airports Authority of India (retrieved on October 29, 2012) from http://www.aai.aero/allAirports/airports.jsp
7 Annual Report 2011-2012, Department of Telecommunications, Government of India (as on December 2011) from http://www.dot.gov.in/annualreport/AR%20Englsih%2011-12.pdf
8 Central Electricity Authority, Ministry of Power, Government of India, (as on June 30, 2012) from http://www.cea.nic.in/reports/monthly/inst_capacity/jun12.pdf
9 Department of Industrial Policy & Promotion, Government of India (April 2000 - September 2012) retrieved on October 29, 2012 from http://dipp.nic.in/English/Publications/FDI_Statistics/2012/india_FDI_September2012.pdf
10 Department of Health & Family Welfare, Government of Punjab (retrieved on October 29, 2012) from http://www.pbhealth.gov.in/institution_list_state.html
11 University Grants Commission (U.G.C.), Government of India (retrieved on October 29, 2012) from http://www.ugc.ac.in/stateuniversitylist.aspx?id=28&Unitype=2
12 Twelfth Five Year Plan 2012-17, Department of Planning, Government of Punjab (retrieved on October 29, 2012) from http://pbplanning.gov.in/pdf/WRITEUP_AP_2012_13_30_3_12_.pdf
13 Special Economic Zones In India, Government of India (retrieved as on October 29, 2012) from http://www.sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf
Show Promising Sectors
Punjab has immense potential to emerge as one of the most economically developed State in India. The State offers wide range of subsidies, fiscal & policy incentives and excellent infrastructure to boost investments across various sectors. Some of the focus sectors for investment in the State are:
  • Information Technology: Punjab is globally competitive and a leading State in the field of information technology. The State Government announced IT industry policy in 2009 to provide favourable environment to foster the growth of the industry. Punjab provides gamut of incentives in order to make the state a preferred destination for emerging IT business opportunities. Some of the key incentives offered by the State are exemption from electricity duty for five years, statutory power cuts, capital subsidies, etc.

    Further, the state has established Electronics Township (ELTOP) at Mohali for promotion and growth of IT and electronics industry.

  • Tourism: The State has a rich culture and heritage coupled with good tourism infrastructure, which makes it one of the favourable destinations for domestic and international tourists. In order to facilitate investments in the State, several initiatives like single window clearances facility for speedy approvals, availability of land for construction of hotels and provision of loan at easy limits have been undertaken. The State is also striving to promote eco?tourism and has introduced Ecotourism policy, 2009.

    Further, Asian Development Bank (ADB) has approved the infrastructure development programme for tourism in Punjab for INR 398 crore over 10 years in two phases1. The project includes improvement of tourism infrastructure in the two international gateways of Amritsar and Mohali.

  • Agro & Food processing: Food processing sector is the focus area of investment in Punjab. The State is endowed with rich agricultural base and is popularly known as wheat basket of India. It offers rich fertility, array of incentives & packages for setting up agro-based industrial units. The state is one of the leading producers of food grains and contributes significantly to the nation's food grain basket.

    The State Government operates an agricultural mega project policy to facilitate investment in the food and agro processing sector. Further, Punjab Agro Industries Corporation Limited (PAIC) has also been given the mandate to promote food and agro processing industries in financial collaboration with private investors.

  • Textile & Garment: Punjab has emerged as a key hub for textile-based industries including yarn, readymade garments and hosiery. The State offers huge investment opportunities in the sector due to availability of skilled & inexpensive manpower, abundance of raw material and existence of several textile & woolen clusters.

    Textile policy of the state offer a range of incentives such as creation of infrastructure through cluster development, maximum utilisation of Central Government's Technology Up-gradation Fund Scheme (TUFS), reduction of electricity duties and assistance in acquiring land for textile related projects.

    Further, Northern India Institute of Fashion Technology has been set up in Mohali for providing qualitative manpower to textile industry.

  • Banking: Punjab provides wide network of banking facilities and offer excellent financial outreach programs. In fact, the high credit deposit ratio represents the effective functioning of banking sector. The State's sanctioned credit deposit ratio stands at 81.6 per cent in March 2012, which is comparatively higher than the national credit deposit ratio of 78.1 per cent during the same period2.
  • Biotechnology: To facilitate biotech industries, the State has provided special package of incentives under its Biotech policy, 2006. Provision for setting up new biotechnology institutes for research and development, creation of Punjab Biotech Promotion Board (PBPB) to attract investments are the key initiatives taken up by the State. Further, Punjab has established a Biotech park in Chandigarh to provide favourable environment to investors.
  • Light Engineering: The light engineering goods industry in Punjab includes bicycle & bicycle parts, hand tools, sewing machines and machine tools. The state accounts for around 15 per cent of bicycle production and 80 per cent of bicycle parts production in India3.

    Some of the other sectors for investment in the state are Rubber & Paper, Machinery & Parts, Chemicals, Auto & Auto Parts, Leather, Sports Goods, Steel Rolling & Re-rolling, Pharmaceuticals, etc.

1 Government of Punjab, (retrieved as on October 29, 2012) from http://www.punjabtourism.gov.in/Newspaper%20Back%20Ground%20Chand%20c.pdf
2 Reserve Bank of India (Report on Trend and Progress of Banking in India 2011-12) from http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/IV8T_TPA021112L.pdf
3 Public Private Partnership, Government of India (retrieved as on October 29, 2012) from http://164.100.52.24/business-opportunities-punjab.php
Show Infrastructure Status

Punjab is a prominent state in Northern India which ranks among the most prosperous and industrialised states in India. The Government is making every effort to enhance the infrastructure as a number of industries have come up in the recent years.

Land Availability

Land is the primary infrastructure required for industrial development. The state of Punjab is culturally diverse and is naturally endowed with fertile soil and a good river system. The state occupies about 1.54 per cent1 of India's total land.

With increasing globalisation, the Punjab real estate market is turning towards a pioneering phase of prosperity. A huge number of Non Resident Indians (NRIs) are coming to Punjab to take the benefit of low investments and high returns.

Punjab Land Records Society is a society established (under Registration of Societies Act, 1860) by the Government of Punjab to formulate strategies, polices, plans and to assist the State Government and Government of India to provide efficient and prompt services in the public matters relating to land and revenue, through the use of IT and its related fields.

Physical Infrastructure

There is huge investment potential in areas such as power, transportation, urban and rural infrastructure in Punjab. The State is considered as one of the best states in India in terms of rail, road and transport network as per National Council of Applied Economic Research (NCAER), 2007. Some of the major initiatives being undertaken in the State are as follows:

  • The National Bank for Agriculture and Rural Development (NABARD) has sanctioned INR 185 crore to the State Government for the second phase of construction of the kandi canal. Funds are being advanced to the state for the construction work to be carried on the canal between Hoshiarpur and Balachaur2
  • Punjab is all set to introduce a New Non-Conventional Energy Policy-2012 to meet the increasing demand of clean energy and to reduce the burden on conventional energy resources
  • The State Government has decided to explore the possibility of developing solar power clusters to energise agricultural pumps in rural areas, which can help the state to bring down the power subsidy cost
  • National Bank for Agriculture and Rural Development (NABARD) has also sanctioned INR 144.49 crore to the Punjab Government under Rural Infrastructure Development Fund (RIDF-XVII) for two projects. The first project is for construction of seven rural roads in six districts (Rs 66.17 crore) while, the second project is for eradication of water-logging problem in Muktsar district (Rs 78.32 crore)3

Social Infrastructure

The State is self-sufficient in food production and led the country's Green Revolution in the 1960s and earned the title of being India's 'bread basket'. Further, the State has a robust healthcare system. A Medicity has been proposed at the Mullanpur urban state and there is also a proposal for a postdoctoral medical college in Mullanpur. Some of the initiatives undertaken are:

  • NABARD has announced the launch of an area-based scheme on dairy development, in a bid to boost dairy sector in Punjab
  • The Government of Punjab has inked a Memorandum of Understanding (MoU) with The Energy and Resources Institute (Teri) to jointly address issues of climate change, sustainable development, conservation and optimal use of water and other critical resources
  • Chandigarh-based pharmaceutical group Ind-Swift, which has forayed into the education sector and undertaken joint collaborative academic ventures with various foreign universities, plans to set up a deemed university in Punjab in three years
1Business Knowledge Resource, Government of India, (retrieved as on October 29, 2012) from http://business.gov.in/investment_incentives/punjab.php
2Punjab State Council for Science & Technology (retrieved on October 29, 2012) from http://punenvis.nic.in/arcindex4.aspx?ssslid=3766&subsubsublinkid=2041&langid=1&mid=4
3National Bank for Agriculture & Rural Development (retrieved as on October 29, 2012) from http://www.nabard.org/ridf/exel/State-wise%20List%20of%20Projects%20sanctioned%20under%20RIDF%20XVII.xls
Show Key PPP Projects

The state is committed to develop physical and social infrastructure and uses PPP as the preferred mode to implement various projects.

Please click on the following link for the PPP projects in the pipeline in the state.

Industrial Clusters

The state has witnessed a considerable increase in the number of industrial clusters. Among major Industrial clusters, the names of Ludhiana, Jalandhar, Patiala, Phagwara, Batala, Goraya, Mandi Gobindgarh and Mohali are worth mentioning. Dera Bassi, Chanalon, and Rajpura are emerging as new and important clusters which are attracting huge industrial investments.

Further, the State has many industrial clusters focusing on particular sectors. Ludhiana leads in industrialisation, accounting for 52 per cent1 of the industrial output. Mandi Gobindgarh, also called the 'Steel Town of Punjab', is a cluster for rolling and re-rolling mills. Mohali on the other hand is home to the IT/ITeS sectors as well as electronics manufacturing.

1Punjab State Office, Confederation of Indian Industry (retrieved as on October 29, 2012) from http://ciinr.org/dp/destinationpunjab/AboutLudhiana.aspx
Show State Benefits to NRIs

The Government of Punjab provides various benefits such as tax exemptions, incentives, etc. to attract more NRI investments in the State. The Government being aware of the immense contribution of the Punjabi NRIs to the socio-economic development of the State has set up a separate Ministry for NRI Affairs in March 2007 to facilitate NRIs/PIOs investments.

The State Government has come up with New Industrial Policy 2009 to create conducive investment climate through infrastructure creation and to make the small scale industry competitive. Further, a special cell in the Directorate of Industries, "Udyog Sahayak", has been established to provide "single window" facility and to ensure time-bound clearance to all investment proposals received from NRIs.

Some of the benefits of the Punjab SEZ Act, 2009 for NRIs are as follows:

  • Exemption from Stamp Duty, Registration Fee and Social Security Cess on purchase of land & on first transfer or lease of immovable property within SEZ
  • Allocation and transfer of land within SEZ by way of sale or lease
  • Permission for generation of electricity in or outside SEZ for consumption of units
  • No electricity duty on generation, transmission, distribution and consumption of electricity within SEZ
  • Single-tier Project Approval Committee for evaluation of the projects
Show Agencies Facilitating Investments

Some of the special agencies that help in facilitating industrialisation in the state are following:

Agency

Description

Punjab State Industrial Development Corporation (PSIDC)

  • Promotes large and medium scale projects in the state
  • Acts as an infrastructure developer and financial facilitator

Punjab Small Industries & Export Corporation (PSIEC)

  • Responsible for setting up industrial focal points
  • Focuses on the development of SSI units

Punjab Financial Corporation (PFC)

  • Provides medium and long term loans for new industrial units, expansion of existing units and revival of sick units in the state

Punjab Agro Industries Corporation (PAIC)

  • Acts as the promoter for agro-based industries in Punjab
  • Assists investors in obtaining all necessary approvals for new projects and facilitates contract farming
Show Key Policy Updates

The Government of Punjab has undertaken several policy measures and initiatives in order to attract investment across various sectors in the State. These investment-friendly policies provide a peaceful and congenial environment for investors to set up industrial units in the State. Some of the key policies in the State are following:

Industrial Policy 2009

IT/Knowledge Industry Policy 2009

Agro Industrial Policy 2009

New and Renewable Source of Energy Policy 2006 (NRSE)

Land Allotment Policy 2008

Notification Textile Policy 2006

Tourism Policy 2003

Disclaimer: While utmost care has been exercised while developing the content, OIFC does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information.