INDIAN STATESEconomy and Business

Jharkhand

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INDIAN STATESEconomy and Business

Jharkhand

www.ibef.org

JHARKHAND PAGE 3

CONTENTS

Executive Summary 5Jharkhand at a glance 7Advantage Jharkhand 8

Economic Development 9State economic profile 9LivingsStandards 9Agriculture – the link with the industry 9Industry 10

Infrastructure 11Infrastructure 11Power 11Education 11Social infrastructure 12Transport & communication 12Research support in mining based areas 13Industrial infrastructure 13Financial sector 13

Policy Initiatives 15Fiscal benefits 15Special benefits for IT 15Agro-based industry 16Industrial policy 16Export promotion 16Promoting Thrust Areas 17

Key Industries, Industrial Potential & Trends 18Key industries 18Success Stories 20Investment Scenario 21

Cost Structure & Approvals 22Power 22Land 22

A.1 Annexure:Websites of Important agencies and bodies in Jharkhand 23A.2 Annexure: Contact address of government offices 24B Annexure: Important Industry Associations in Jharkhand 25C Annexure: Estimates on cost of Setting up business in Jharkhand 26

A report by CRISIL for IBEF

JHARKHAND PAGE 5

Executive Summary

Despite being a potentially rich state, the state facesthe initial developmental challenges like access tosome of the basic infrastructural facilities like road,potable water, steady power supply and requirededucational facilities. However, the state government,committed to facilitate rapid and planned industrialgrowth has undertaken key policy and regulatoryinitiatives to provide required infrastructure and afriendly environment for industrial growth in the state.

The state offers immense opportunities in the field of power generation, geological exploration andexploitation of gold, silver, base metals and preciousstones. Further, the vast natural resources of the statehave acted as a driving force of rural and agro basedindustries like jute, hemp, sisal and other fabrics, teacultivation, processing and packaging, paper, cattlefeed, floriculture and horticulture making them thepotential areas of future investment.

One of the newly born states –Jharkhand, was carvedout of the erstwhile state of Bihar.The state accountsfor about 40 per cent of the country’s mineraldeposits and is the sole producer of coking coal,uranium and pyrite. Further, Jharkhand ranks first in the production of coal, mica, kyanite and copper in India.

Being a mineral-rich state, it houses a number ofimportant industries.Two major steel plants of thecountry (in Jamshedpur and Bokaro), coalmines,a heavy engineering unit and a fertilizer unit (in Sindhri) are situated in the state. Besides themineral advantage, Jharkhand is adorned withevergreen forests, wild life, lakes, waterfalls, scenicbeauty, health and holiday resort and soothing climatewhich have the potential of attracting a large numberof tourists to state.

Industrial Centres in Jharkhand

JHARKHAND PAGE 7

Jharkhand at a glance

S. No. Items Year Unit Statistics

(A) Geographical Data1 Geographical Area 2002 Sq. Km. 79,7142 Forest Area 2002 Sq. Km. 23,325

(B) Metrological Data1 Annual Rainfall 2000 mm. 1,5302 Temperature

(i) Minimum 1999 ° C 10.3(ii) Maximum 1999 ° C 37.2

(C) Administrative Units1 Divisions 2003 No. 42 Districts 2003 No. 183 Villages 2002 No. 32,620

i) Number of Villages Electrified 2002 No. 14,667

(D) Economic Data1 Monthly per capita 1999-00 US$ 9.95

consumption expenditure2 Per Capita Income 2002-03 US$ 248.31

(E) Demographic Data1 Literacy Rate 2001 Per cent 54.1

(i) Male 2001 Per cent 67.9(ii) Female 2001 Per cent 39.4

(F) Roads(i) Rural Roads 2002 Km. 7,678(ii) National Highways 2002 Km. 5,805

(G) Mineral Reserves(i) Coal 2002 Thousand Tonnes 59,919(ii) Iron Ore 2002 Thousand Tonnes 8,659(iii) Copper Ores 2002 Thousand Tonnes 1,189

Advantage Jharkhand

n Given the mineral resource base of the state and the available industrialinfrastructure, Jharkhand has the potential to develop as the most financiallyviable state in the country.

n Easy access to expert assistance in the field of mining and geology.

n Resource rich state with abundance of waterfalls, rivers, and huge coal beds.The state thus offers immense scope for mini, micro hydro power stations andnon-conventional energy.

n Immense power potential.The installed capacity of power in the state is 2,590 MW; thermal and hydel power projects in the state have potentialcapacity of 4736 MW.

n Large reservoir of educational and technical institutes, offering large pool of trained manpower for industries.

n Immense potential to set up agro-based units.Within a span of three years,the state has moved from a state procuring vegetables from outside to a 100,000 tonne vegetable-surplus state.

relatively higher in urban sector.The total expenditurefalls short of the all-India aggregate of US$13.36.

Agriculture – the link with the industry

Jharkhand has a large and varied agricultural economythat can support a host of agro-based industries,particularly food processing.Within a span of threeyears, the state has moved from a state procuringvegetables from outside, to a 100,000 tonnevegetable-surplus state.The state’s soil and climaticconditions also support ornamental plants, mushroomand spices and tea.The state also has a largesericulture base and accounts for 40 per cent of theproduction of Tussar, a non-mulberry silk.

JHARKHAND PAGE 9

State Economic Profile:The Minerals Factor

Jharkhand’s key advantage is its natural resource baseand the state accounts for 40 per cent of thecountry’s mineral resources.The region accounts for35.5 per cent of the country’s known coal reserves,90 per cent of its coking coal deposits, 40 per cent of its copper, 22 per cent of its iron ore, 90 per centof its mica and huge deposits of bauxite, quartz andceramics. Mining and quarrying industry contributes a significant portion of the state’s gross domesticproduct.

The other large component is mineral basedmanufacturing industry, notably iron and steel.These two together constitute half the state’s annual production.

Living standards:improving dramatically

Jharkhand is a new state and comparisons over timehave to be made on the basis of simulation for thepast. Despite a slow start, the state has done somequick catching up in the nineties.

The monthly per capita expenditure of the state is

ECONOMIC DEVELOPMENT:RECOGNISING THE LINKAGES

GDP Composition (1993-94 / 2002-03)

0 10 20 30 40 50 60

Agriculture 20.3

Industry 48.5

Manufacturing 24.1

Mining & Quarrying 15.8

Services 31.3

Source: CSO

Per Capita Income

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

100

150

200

250 227250 252 250

307294

280

230 238 248

300

350

US$

US$

Per Capita Monthly Expenditure (1999-00)

Rural Urban Total5

7

9

11

13

15

17

8.65

15.47

9.95

Source: NSS 1999-00

The area, production and productivity of fruits and vegetablesin the state (2001-02)

State Area Production Productivity('000 Hectares) ('000 Metric Tonne) In MT/Hec

Fruits

Jharkhand 31.5 321.1 10.2

All India 4010.2 43000.9 10.7

Vegetables

Jharkhand 158.5 1736.3 11.0

All India 6155.7 88622 14.4

Source: Indiastat.com

Industry – excelling amongst the comparators

Given the advantage of vast mineral reserve, whichJharkhand enjoys, industry is the dominant sector ofthe state. In 2002-03, industry contributed to about3.3 per cent of India’s gross value added in the sector.The state compared favourably with the two newstates of Chattisgarh and Uttaranchal.

Composition of the industrial sector shows thatmanufacturing of basic metals contributed to about72 per cent of the sector’s gross value added in 2002-03.Top five industries in the state contributedto 90 per cent of the value added by the sector.

Industry Share

Manufacture of basic metals 71.9

Manufacture of motor vehicles,trailers and semi-trailers 6.0

Manufacture of other non-metallic mineral products 4.7

Manufacture of machinery and equipment n.e.c. 3.7

Manufacture of coke, refined petroleum products and nuclear fuel 3.7

Source: Annual Survey of Industries

Share in All India GVA (2002-03)

Jharkhand Chattisgarh Uttaranchal0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5 3.3

1.9

0.6

Source: Ministry of Statistics and Programme Implementation

JHARKHAND PAGE 11

INFRASTRUCTURE: NEW INITIATIVES TO THE FORE

Chandil Thermal 1200 MW

North Karanpura Thermal 2000 MW

Shankh II Hydel 186 MW

Tilaiya Dhadhar Hydel 50 MW

Kanhar Hydel 450 MW

Maithon Thermal 1000 MW

Total 5736 MW

Source: State Industrial Policy

Education: Quality technical andmanagement institutes proliferate

Privatising the power sector

Privatisation of generation and distribution are due

in the near future

n The cities contemplated for privatisation

of power distribution are Ranchi, Jamshedpur

and Dhanbad.

n The state has signed an agreement with the US

based Eastern Energy Ltd, which would invest

US$ 103.3 million in the power sector. Further,

investments worth US$ 1033.2 million and US$

3099.5 million would be made in the sector by

a Canada and US based companies respectively.

n The state also plans to set up an SEZ (Special

Economic Zone) for the power sector.

InfrastructureFor new states like Jharkhand, new initiatives matteras much as the existing state of infrastructure.Whilein terms of existing infrastructure, the state hasmarked advantage in power generation and technicaleducation; the state government has taken a numberof steps to beef up industrial infrastructure andtransport networks.

Power:Abundant supply potential

Jharkhand is a resource rich state with abundance ofwaterfalls, rivers, and large coal beds.The state offersimmense scope for mini, micro hydro power stationsand non-conventional energy.While the operatingcapacity of power in the state is 2,590 MW; thermaland hydel power projects in the state put togetherhave potential capacity of 5736 MW.The state alreadyhas an exclusive dedicated feeder for industrial areasto ensure quality and uninterrupted supply of power.There is also two-tier tariff system for peak and offpeak power.

Key power facilities

Plant Type of Plant Capacity

Patratu Thermal 420 MW

Tenughat Phase I Thermal 630 MW

Tenughat Phase II Thermal 500 MW

Per cent of Households

with telephone having electricityconnection

with source ofdrinking waterwithin premises

0.0

5.0

10.0

15.0

20.0

25.0

30.0

3.3

24.30

20.0

Source: Census 2001

Jharkhand’s education legacy

The state has a long legacy of housing some of

India’s best technical mangment institutes that today

have an international presence as well. Examples are:

n Birla Institute of Technology –Ranchi

n Indian School of Mines- Dhanbad

n Xavier Labour Relations Institute –Jamshedpur.

n Regional Institute of Technology –Jamshedpur

n National Institute of Foundry and Forge

Technology- Ranchi.

infrastructure but also to make the already existinginfrastructure functional.

The state encourages privat sectore participation inputting up social infrastructure. It is committed toprovide land and other facilities at concessional ratesfor this purpose.

Transport and Communication

Due to its tradition of mining and mineral basedindustry, the state has adequate transport andcommunication networks.There is serious effort onthe government’s part to improve this. Specificattention is being paid to strengthening the roadsnetwork. For instance, work is on for widening 4400kilometres of the 6600 km state highway network.There is also an effort on to connect the state to thenortheast region with an expressway.At the state’smajor airport at Ranchi, an air cargo complex is beingset up to support export oriented industriesespecially those operating in the high value andperishable commodity area. Floriculture andhorticulture based industries will be significantlybenefited by the complex.

The State has a number of high quality technicalinstitutes, offering a large pool of trained manpowerfor industry.

Apart from these premier institutes, the stategovernment runs 12 polytechnic institutes that impartdiploma level technical education.

The overall literacy rate in Jharkhand increased to54.1 per cent in 2001 up from 41.4 per cent in 1991.In 2002-03, the pupil-teacher ratio of the state washigher than the national aggregate in almost all thecategories.

The Jharkhand region had the smallest loss ofmandays due to industrial unrest in the country in the last ten years.

Social Infrastructure

The state aims to not only set up new/ additional

Jharkhand

n Literacy rate of 54.1 per cent

n Favourable Sex Ratio of 941 females per thousand

males as against 933 for All India.

n Jharkhand has a total dependency ratio of 100.4

per cent during 1999-00. Rural dependency ratio

at 101.1 per cent was higher than the urban ratio

of 97.7 per cent.

n The state has 506 health centres in 2001-02.

n Till 2001-02 the state had 21386 schools and

5 universities.

As on January 2003 there were 4,36,371 wireline

Telephone Connections and 26,270 number

of Village Public Telephones Provided by BSNL

in Jharkhand.

Pupil Teacher Ratio (2002-03)

Higher Edu Inst

Higher Sec/Intermediate

Colleges

High/PostBasic School

Mid SeniorBasic School

Primary/JuniorBasic School

00

10

20

30

40

50

60

70

2622

3235

42

30

57

34

59

42

Jharkhand

India Source: Indiastat.com

Per

cem

t

Infant Mortality Rate

2000 2001 200200

20

40

60

8068

70

66

62

63

51

Source: indiastat.com

Installed capacity (MW)

Electricity generation (MU)

JHARKHAND PAGE 13

Research support in mining basedindustries

Jharkhand has easy access to expert assistance in the field of mining and geology.The state is host to a number of central government institutions likeCentral Mining Research Institute, Indian School of Mines, Central Fuel Research Institute, NationalMetallurgical Laboratory, Indian Institute of CoalManagement, Metallurgical and EngineeringConsultants of India, R&D Centre of SAIL and theGeological Survey of India.These can provide readyresearch and consultancy support to investorswishing to invest.

Mineral resources position of Jharkhand with regard to all India

Sl No. Mineral Jharkhand % Share to all India

1 Pyrite 52 91.0

2 Graphite 4 57.5

3 Coal 62085 32.1

4 Iron Ore 3038 31.8

5 Copper Ore 93 25.9

6 Quartz & Silica sand 148 19.0

7 Kyanite 113 8.3

8 Fireclay 48 6.8

9 Chinaclay 42 4.8

10 Bauxite 111 3.7

11 Lime Stone 572 1.1

12 Dolomite 47 0.8

13 Bentonite 1 0.3

14 Soapstone (Seatile) 0 0.3

Source: Jharkhand Annual Plan.

Industrial Infrastructure:The Growth Centre Idea

The state government is and promoting 3-TierGrowth Centres at mega, mini and micro levels.

Some of the Growth Centresn Food Park at Tatu Road, Ranchi

n Software Technology Park at Ranchi/Jamshedpurn Special Economic Zone along Ranchi / Jamshedpur

Highwayn Export Promotion Industrial Park at Kandra near

Dhanbadn Biotech & Herbal Park at Khunti near Ranchin Electronic Park at Ranchin Air-Cargo Complex at Ranchi

Facilities at the Growth CentreThe following facilities will be provided at suchgrowth centres:

n Highest slab of capital investment and interestsubsidy.

n Highest slab of other relevant subsidies.n Quality infrastructure support, which includes good

road connection to the nearest highway.n Priority in power allocation to such growth

centres.

Financial sector: Presence of leadingdomestic and international bankinginstitutions

The per cent of households availing of bankingfacilities in Jharkhand though lower than the nationalaverage is considerably high at 30.1 per cent,suggesting a movement towards healthy penetrationof financial infrastructure in the state.

The state houses a considerable number of branchesof nationalised, regional, rural and other commercial

Industrial InfrastructureThe state has 4 Industrial Area Development

Authorities at Adityapur, Bokaro, Ranchi and Dumka.

The state will constitute a “land bank” at district

level to make available required land to

entrepreneurs without any delay. Supporting facilities

like information, transportation linkages, housing

facilities, telecommunication, health, education, sports

will be made available at the industrial area.

banks.The state holds a significant share of 17.2 percent of the branches of the State Bank of India (andits associates) in the eastern region. Regional ruralbanks also have a significant presence in the state,holding around 10 per cent of the region’s deposits in the bank.

Offices, deposits and credit of scheduled commercial banks (2001) amount in US$ million

Nationalised Banks Regional Rural Banks Other Scheduled All Scheduled Commercial Banks Commercial Banks

Region/State No. of Deposits Credit No. of Deposits Credit No. of Deposits Credit No. of Deposits Creditoffices offices offices offices

Jharkhand 613 1400 302 391 200 57 5 69 4 1346 2349 640

Eastern Region 5222 11179 3356 3577 1948 611 102 1096 594 10865 18910 7091

Per cent of Households availing banking facilities (2001)

Jharkhand All India0

5

10

15

20

25

30

35

40

30.1

35.5

Source: Census 2001

JHARKHAND PAGE 15

POLICY – TOWARDS AN ENABLINGENVIRONMENT1

IT PolicyThe core objective of the new IT policy of the state is to allow different constituents within the state toleverage the opportunity of talent development andemployment, and enhance efficiencies in governanceand social service.

ObjectivesImproved communications & infrastructureEducation & development of human resourcesEffective governance

InitiativesA. Initiatives for improved communications & infrastructure

n JharNet - state wide high speed, reliable & scalablecommunication links will be set up by the stategovernment.

n Internet connectivity across the staten Seamless connectivity among various government

organisationsn Setting up IT Parks

Jharkhand has a clearly enunciated industrial policywith emphasis on the three aspects:n Efficient exploitation of its mineral and power

resources to offer a base for mining andmanufacturing industry.

n Increased private participation in infrastructure.n Creation of special industrial zones to reduce red

tape and offer the best support facilities forindustry.

Fiscal Benefits

The state offers a number of fiscal benefits toaccelerate industrialisation and attract investment tothe state.

A list of subsidiesn Captive power generation subsidy.n Interest subsidy.n Stamp duty and registration.n Employment generation based incentives.n Special incentives for thrust areas/EOU and

SC/ST/Women/Ex-servicemen and handicappedpersons.

n Feasibility study - Project report cost.Reimbursement subsidy.

n Pollution control equipment subsidy incentive forquality certification

Special benefits for IT

The Jharkhand government seems clearly focused onpromoting the IT sector both as a stand-aloneindustry and in a support function for other sectors.

Special Incentives for IT Industry

n Exemption from environment clearance.

n Exemption from zoning regulations for purposes

of location.

n Self - certification on compliance of several Acts.

n 0.25 per cent rebate in allotted land cost per job

created.

n Rebate on registration charges and stamp duty for

sale/lease of space for establishing IT

infrastructure.

n At least 30 per cent employment for Jharkhand

residents.

Special Rebate for IT Infrastructure

n 90 per cent rebate for facilities established and

sale/leased during 2001 – 2003.

n 70 per cent rebate during 2003 – 2004

n 50 per cent rebate during 2004 – 2005

1 As per Jharkhand Industrial Policy, 2001

n The state government shall encourage privatesector participation in generation and distributionof power.The private sector is intended to providewheeling and banking of power through thetransmission and distribution system of the StateElectricity Board.

n The government would encourage private sectorin setting up of captive power generation plants of any capacity to meet the existing as well asfuture demand for power of industrial units.No permission from SEB shall be required to setup the plant; further generation and purchase of captive power shall be exempt from electricityduty for a period of ten years from the date of commercial production.

n Since power is the lifeline for industrialdevelopment, the state plans to accord priority to industrial connection.

n The state intends to establish an independentElectricity Regulatory Commission to settleelectricity disputes between industrial consumersand the Board.

Export Promotion

n International airportn Rural telephoncn Multi-purpose Community & service delivery centre

B. Initiatives for education & human resource development

n Setting up virtual campuses of reputed overseasuniversities

n Upgrade top engineering colleges to provide highstandard IT education

n Create specialised IT institutes, link institutions,e-learning & distance education

n Training for the government employeesn Computer literacy programmesn Common knowledge resource

C. Initiatives for effective governance

n Organising annual I.T. events with the help of industry associations

n Introduce e-mail and internet access in allgovernment districts offices

n Computerisation of government departments

D. Investment promotion & incentives

State government proposes to provide logistics &infrastructure related incentives and investment &fiscal incentives to foster rapid growth of the industry.

Agro-based Industry—a thrust area

Apart from mineral resources, the state governmentis making a serious attempt to exploit its agriculturalresources and its linkages with industry. For this,special food and agri-processing zones have been setup.The food processing units’ park at Ranchi and theBiotech & Herbal Park at Khunti near Ranchi areexamples.

Infrastructure Policy— Power Sector

With an objective of delivering power of right quality,right quantity and uninterrupted supply to theindustries, the state government intends to developthe power sector, which has been accorded highestpriority in the state’s economic planning.

Export Promotion Measures

n To set up an Air Cargo Complex at Ranchi to

provide boost to export of flowers, fruits,

vegetables and other commodities.

n The government has taken steps to establish a

Container Depot at Jamshedpur.

n Export Promotion Industrial Park (EPIP) to be set

up at Dhanbad with the assistance of the

Government of India to provide high quality

infrastructure facilities for export oriented units.

n Special Economic Zone (SEZ) is being proposed

to be set up to give fillip to exports and earn

valuable foreign exchange for the country.

n Declaration of Export Oriented Units as Essential

Services / Public UtilitiesSservice.

n State government to take supportive view in

operation of relevant labour laws to facilitate

export production.

JHARKHAND PAGE 17

The state has undertaken a number of measures topromote exports of commodities like flowers, metals,tussar, handicrafts, automobiles, computer software,etc.A state level Export Promotion Council has beenconstituted with representation from industry andcommerce to direct, promote and ensure monitoringof the export related activities in the State.

Promoting thrustiIndustries

Being one of the newly created states, Jharkhand is actively working to identify and develop the vastnatural resource potential that the state is blessedwith.The state holds vast mineral deposits, energysources, enjoys moderate climate, good rainfall,extensive communication network, quality educationaland research facilities.Along with industrial growth,development of thrust industries is being done withan objective of utilising the resources and generatingemployment.

Some of the Identified Thrust Areas

n Mining & Mining Based Industries

n Agro Based Industries

n Industries based on Medicinal and Aromatic Plants

n Sericulture/Tasar

n Forest Based Industry

n Food Processing Industry

n Tourism

n Power Generating & Allied Industries

Micro and Mini Power Plants

Apart from large power units, the state government

is also actively encouraging private investors

KEY INDUSTRIES,INDUSTRIAL POTENTIAL & TRENDS

Agro based industriesThe vast pool of natural and forest resources havebeen the driving force of the rural and agro basedindustries like jute, hemp, sisal and other fabrics, teacultivation, processing and packaging, paper, cattlefeed, floriculture and horticulture.The sector not onlyprovides employment opportunities to vast sectionsof the society, but also has immense export potentialthat can be tapped to earn valuable foreign exchange.The sector is on the state’s priority list.

22 out of the 26 medicinal plants and herbs are available in Jharkhand

FloricultureFloriculture including ornamental plant production isan emerging industry with rewarding prospects.Thestate offers many natural advantages for floriculturesuch as conducive climate good rail and roadconnection and an air-cargo complex.There exists ablooming export market in Europe and Japan thatcould be tapped effectively.

Power generating and allied industries Jharkhand has both coal and water resources that canhelp in generating power.The state has a large powergenerating opportunity and it is open to the prospectof private participation.

Key industries:A Minerals Powerhousewith Large Agro-Industry Potential

Mineral-based industries Being rich in mineral resources, essential for thegrowth of industries; manufacture of basic metalsemerges is a key industry in the state.The industrycontributed to more than 70 per cent of theindustrial gross value added in 2002-03. Jharkhand has the country's two biggest steel plants at Bokaroin the public sector and Tata Iron and Steel Company(TISCO) in Jamshedpur in the private sector. Otherimportant industries are Tata Engineering andLocomotive Company (TELCO), Sriram Bearing,Usha Martin and Indian Tube Company.The state is abundantly rich in minerals - copper, coal, iron,manganese, mica, chromite, bauxite, etc., and has thepotential of becoming one of the most prosperousstates of India.

Key Industries in Jharkhand

Industry Share in GVA(2002-03 QE)

Manufacture of Basic Metals 71.86

Manufacture of Motor Vehicles,Trailers & Semi-Trailers 6.02

Manufacture of Other Non-Metallic Mineral Products 4.71

Others 4.20

Manufacture of Machinery & Equipment n.e.c. 3.74

Manufacture of Coke, Refined Petroleum Products and Nuclear Fuel 3.74

Manufacture of Chemicals andChemical Products 3.25

Total 97.5

Source: Annual Survey of Industries.

The state is the sole producer of coking coal, uraniumand pyrite in India.The geological exploration andexploitation of gold, silver, base metals, preciousstones etc. hold future potential.

Opportunities in Agro-based industries

n Tissue culture products

n Seeds and planting materials

n Seeds and planting materials

n Bio-technological process and products

JHARKHAND PAGE 19

n to set up mini and micro Hydel power plants of 1

MW – 10 MW.;

n to exploit and develop non-conventional sources

of power such as geothermal energy, biomass

based power, solar power and wind power,

The Jharkhand government will accord industry

status to mini/ macro power generating units and the

industries generating power through the non-

conventional sources.

Handicrafts

n Measures to boost

growth

n Specialised training

n Design development

n Raw material support

n Marketing assistance

n Improved tools

n Technology improvement

n Bank finance

n Provide a marketing

platform

Khadi & village industries

n High priority accorded to this sector so as to promote a self-

reliant rural economy.

n Set up a KVI (What is the full form?) Board to provide training

financing and marketing support.

n Set up a Bamboo Research Institute.

Forest based Industry

n Various forest produce available in the state are mahua seed, sal

seed, shellac, bamboo, kendu leaf, harre, behera, etc.

n The state will encourage R&D to increase use of such forest

produce so as to boost this sector.

Handloom

n Providing looms and

accessories

n Product development

n Infrastructure support

n Institutional support

n Training to weavers

n Supply of equipment

n Marketing support

Rural industries Industries like handloom, forest based industries andthose based on medicinal and aromatic plants aresome of the key contributors to the income of alarge percentage of the state’s population. Handloomsector alone provides employment to around 150,000weavers in the state.The state is endowed with richskill base in handloom weaving, handicrafts and otherskill-based industries, thus presenting an immenseexport opportunity To give thrust, the governmentaims to provide benefits in the followings areas.

Befefits Providedby the

government

from Ranchi town.The Heavy Machine Building Plantset up with assistance of the erstwhile USSR designsand manufactures equipments and spares for different sectors.

Central Coal Fields Limited (CCL) (Ranchi)Jharkhand is the country’s richest state in coalreserves, Central Coalfields Limited (CCL) asubsidiary of Coal India Limited is engaged in thegrowth of coal production and development of newcoal resources in the state. CCL with 35 milliontonnes of coal production has 60 collieries underrevenue production, 5 coal washeries, coal handlingplants, workshops located in the Ranchi, Giridih,Chatra, Hazaribagh and Palau districts of the state.CCL. is engaged in coal mining with scientific methodsmeeting the safety, quality and environmentalstandards.

Usha Beltron Limited (UBL)Usha Beltron Limited is the largest producer of wireropes in the South and Southeast Asia. It is alsoamong the top five manufactures of wire ropesworldwide.The private steel alloy company has itsmanufacturing unit at Adityapur near Jamshedpur anda wire rope division at Ranchi. Usha Beltron Limitedproduces special grades of wire for domestic marketsand for customers engaged in automobile production,construction industry, power industry, railwayequipments etc.

Tata Iron and Steel Co. Ltd. (TISCO)Tata Iron and Steel Co. Ltd. established in 1907 by J N Tata in Jamshedpur, is Asia’s first and India’s largestintegrated private sector steel company.The companyis one of the lowest cost producers of steel in theworld.Tata Steel's all steel making facilities are locatedin Jamshedpur, in Jharkhand. It owns several iron-oremines, collieries and flux mines near its plant.TataSteel manufactures diverse range of products andoffer services. Besides Tata Steel, some of the majorTata group holdings in the State are Tata Engineeringand Locomotive Company (Telco),Tata Timken Ltd.,Tata Yodagawa Ltd. and Tata Pigments Ltd.

TourismJharkhand’s evergreen forests, wild life, lakes,waterfalls, scenic beauty, health and holiday resort andsoothing climate makes it an ideal tourist destinationfor nature lovers.

Sericulture/ tussarThe state of Jahrkhand accounts for about 40 percent of country's production of tussar- a non-mulberry silk.Two main species of trees- Arjuna andAsan are found in the widespread forests of the state.These trees are the breeding grounds for the mothwhich produces the oval cocoon which is furtherreeled into yarn. Due its unique characteristics, tussarsilk also called ‘wild’ silk is fast gaining popularity in the fashion world. Under its Vision 2010 plan,the state plans to integrate horticulture, agriculture,sericulture and productions of lac operations, whichwill enable the state to augment its tussar silkproduction to 60 per cent of the national production.The forest department of the state is also planning to encourage the production of Arjuna trees to helpachieve this target.

Profiles of key players operating in the state

Heavy Engineering Corporation (HEC) (Ranchi)The Heavy Engineering Corporation was establishedin 1958 at Dhurwa and Hatia region about 10 km

Key Tourist Destinations

n Betla National Park

n Dalma Wildlife Sanctuary

n Saranda Forest

n Dams-Kanke Dam, Hatia Dam, Rukka Dam,

Konar Dam,Tilaiya Dam

n Falls- Hundru, Hirni, Jonhs, Dasam

n Temples- Jagannath Temple, Sun Temple,

Deori Temple

In 2001 total 3,53,177 Indian tourists and 2,979

foreign tourists visited Jharkhand.

JHARKHAND PAGE 21

Business opportunities in JharkhandJharkhand has the unique combination of the threefactors that support the growth of industry:

n Availability of natural resources – The statehas the largest concentration of metals andminerals in the country and the potential for alarge volume of power generation.The presence of a large and varied agricultural economy is another positive factor.

n Policy proactiveness – Jharkhand’s policies havethe urgency of a new state trying to find a niche in the national scenario.Thus policies are proactiveand geared towards optimally leveraging theavailable resources.

n Capability –The region has a long history ofbeing home to mineral based heavy industry.An industrial infrastructure exists in the state sthat the incumbent government is building on andimproving.The presence of high quality technicaland management institutions is an added attractionproviding a supply of skilled technical andmanagerial personnel.

Power sector – Attracting Foreign Investments The state has signed an agreement with the US basedEastern Energy Ltd, which would invest US$ 103million in the power sector. Further, investmentsworth US$ 1033 million and US$ 3099 million wouldbe made in the sector by a Canada and US basedcompany respectively.

5.3.4 Jharkhand to host alumina refinery projectJharkhand is endowed with immense mineral base,thus a host to a number of steel plants, coal refineriesetc. In tune with the objective of utilising theresource base of the state efficiently a MoU with theUS-based TechAl Corp for setting up an US$ 1343million alumina refinery project has been signed.Thesetup is expected to generate atleast 10,000employment opportunities annually.

Power Grid Corporation of IndiaPower Grid Corporation of India established in 1989it is the first ISO: 9001 company in the power sector.Powergrid is the largest transmission utility in theworld, with its transmission network spread over theentire length and breadth of India. Powergrid is alsoranked amongst one of the best-managedtransmission companies in the world, which deploysthe latest operations and maintenance techniques andmaintains the overall transmission system availabilityabove 98 per cent. It is the only public sectorenterprise in the Indian power sector to receive The Prime Minister’s MOU Award consecutively forthe years 1997-98 and 1998-99.

Investment scenario

Current investment inflowThe Jharkhand government’s efforts at stepping upindustrial growth seem to be paying off.The totalnumber of industrial investment proposals to thestate has moved up from 329 during August 1991 to March 2001, to 486 till November 2004.The shareof total proposed investment into the state throughthese proposals, increased from 0.72 per cent to 0.81per cent during the respective periods. Consequentto the investment inflow, 80958 employmentopportunities were generated in the state duringAugust 1991 to November 2004.

Industrial Investment InflowCumulative Since August 1991

Source: Department of Industrial Policy and Promotion

Aug 91-Mar 01

Mar 02 Mar 03 Mar 04 Nov 04

Nos

.

Rs

Cro

re

300320340360380400420440460480500

11000

12000

13000

14000

15000

16000

17000

18000

10000

Total Proposals

Proposed Investment

COSTS AND APPROVALS

Land for Industries outside Growth CentreLand can also be purchased or procured by way of government allotment with the state governmentalso facilitating in purchasing and acquiring land forlocating industries.The state government has alreadyamended the Bihar Tenancy Act authorisingconversion of agricultural land. Similar amendments in other Tenancy Acts will be carried out in future.

Allotment of government land The District Collectors are authorised to allot up to 5 acres of government land in the district forindustrial purposes. However, government land inexcess of 5 acres would be leased to entrepreneurswith the approval of the empowered committee.The land would be allotted at predetermined rates,fixed by the government from time to time.

PowerPriority in power allocation is given to the industrialareas and the growth centres in the State.The Stateprovides for exemption from payment of minimumguarantee charge for new industrial units havingconnected load up to 500 KVA or equivalent H.P, asper billing norms. Further, exemption from electricityduty on captive power generation up to 25 MW isalso being provided for at selective industrial areas.

Power tariff The State wil form an independent electricityregulatory commission to ensure:

n Rationalisation of power tariff n Timely disposal of electricity related disputes n Transparent interaction between industrial

consumers and Board.

Land

Land and Shed in Growth Centres/ IndustrialArea/E.P.I.P etc.Land/sheds in Growth Centre, Industrial Area isallotted to entrepreneurs for setting their industrialunits on lease of 90 years with option of renewal.The rent payable for the land would be subject torevision after every 20 years.The entrepreneur shall have the right to mortgage the land/shed withthe financial institutions/banks with no separatepermission required either from the government or the Industrial Area Development Authority for mortgaging the leased land to the financialinstitutions/banks within the lease period for securingterm loan/ working capital loans for the unit forwhich the land/shed has been leased.Authoritiesmanaging Growth Centre are the ‘Single contactpoint’ for clearances regarding allotment of land.

JHARKHAND PAGE 23

ANNEX A.1:WEBSITES OF VARIOUSGOVERNMENT DEPARTMENTS

Central Fuel Research InstituteURL: www.cfrindia.com

Central Fuel Research Institute under the Council of Scientific & Industrial Research (CSIR) is a premierresearch organisation devoted to research anddevelopment work on Indian fuel resources, especiallycoal and lignite.The institute accredited with an ISO9001 certification has contributed significantly to theindustrial growth through its research based on utilisation of coal.The Institute with its vastknowledge pool can hold the potential to provideresearch and development support to manage theenergy needs efficiently and in an eco-friendly manner.

State web sitewww.jharkhand.nic.in

Central Coal Fields Limited (CCL), RanchiURL: http://ccl.cmpdi.co.in

CCL is a subsidiary company of Coal India Limitedunder ministry of coal and mines of Government of India.The company aims to produce and marketthe planned quantity of coal and coal productsefficiently and economically. CCL caters to the marketrequirements while maintaining the financial viability.

Jharkhand Telecom CircleURL: http://jharkhandtelecom.nic.in

The Jharkhand Telecom Circle is a territorial unit of Bharat Sanchar Nigam Limited (BSNL) providingvital infrastructure to help the newly created statewith the very crucial telecom services.The Circleaims to increase the telecom penetration and makethe telecom services in the state available ataffordable prices.

National Metallurgical Laboratory (NML),JamshedpurURL: www.nmlindia.org

The NML operates with an objective of developing,transferring and specialising services for developmentand success in the area of mines and minerals. NMLundertakes research and development, technologytransfer, consultancy to support the scientific andindustrial growth of the area.

ANNEX A.2: CONTACT ADDRESS OFJHARKHAND GOVERNMENT OFFICE2

Government Offices

Secretary - Industry Secretariat Ranchi Phone: 0651-252670 Web site: http://jharkhand.nic.in

Industrial & Investment PromotionBodies

Managing Director Adityapur Industrial Area Development AuthorityAdityapur,Jamshedpur,Bihar- 831013.Phone: 0657-407693/407339 Fax: 0651 - 407339

The Managing Director Ranchi Industrial Area Development Authority,RIADA Bhavan,Main Road.Ranchi - 834 001.Phone: 0651-208 407, 316 063

2 As per the State Government Website

JHARKHAND PAGE 25

ANNEX B:ANNEXURE:INDUSTRY ASSOCIATIONS IN JHARKHANDThe Ranchi Industrial Area Development Authority(RIADA)URL: www.riadaonline.org

RIADA is an autonomous body set up by theGovernment of Bihar( before Jharkhand was carvedout of Bihar).The authority plays a progressive role in the industrial development of seven tribal districtsof Jharkhand. Strategically located, the authority hasbeen able to continue with its activities in the field of industrialisation promptly.

Small Industry Service Institute (SISI)URL: www.smallindustryindia.com/sido/sisi/24.htm

Small Industries Service Institute provides acomprehensive range of techno-economic, managerialconsultancy and common facility services to small-scale industries in the state.The institute based inRanchi and Dhanbad provides its services inChotanagpur area of the state consisting of 14districts viz. Dhanbad, Girdih, Hazaribagh, Ranich,Gumla, Lohardaga, Singhbhum Palamau,Tata BokaroKoderma Domchandi Kumardhubi and Ghatshilla.

Confederation of Indian IndustryURL: www.ciionline.org

Details of the Jamshedpur office may be given here

ANNEX C:ANNEXURE: ESTIMATES OF COSTOF SETTING UP BUSINESS IN JHARKHAND

3 Source: Indiastat, Jharkhand State website

Cost of setting up business inJharkhand3

An indicative table on cost of setting up business in Jharkhand

ManufacturingLand (US$ / hectare) 69,541Labour Cost (US$ / man year worked) 2,090

ServicesOccupation Costs 13.2(US$ / sq ft / year)

Employee Cost (US$ / man year)Software Developers 5,784 Team Leads 13,522 Architects 18,965 Project Managers 29,856

Common HeadsCost of Capital 10.25-(Prime lending rate, per cent) 11.00Electricity (US$ / 1000 KWh) 68.9

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