The State Economy

Gujarat accounts for 16 per cent of the country's total investment and 10 per cent of expenditure. This is primarily due to the entrepreneurial spirit of its people. The state's Gross State Domestic Product (GSDP) grew at an average rate of 12.4 per cent per annum in the period 1994-2002. Its GSDP was estimated at US$ 22 billion in 2003-04 as against US$ 19 billion in 2002-03, which is a growth of 15.4 per cent during the year.

The growth in industrial activity has brought about prosperity in the state. The number of people living below the poverty line has registered a decline. The purchasing power of people has increased immensely. The monthly per capita consumer expenditure of the state is well above the national average. 

Source: Socio-Economic Review, 2003-04 Government of Gujarat Website

Source: National Council of Applied Economic Research (NCAER)

A strong manufacturing sector is the bedrock of economic activity in Gujarat. In the last two decades, the state witnessed an accelerated pace of industrialisation. The contribution of the manufacturing sector in the state economy has doubled in the past decade because of its strategic location, excellent infrastructure support, extensive natural resource base and a proactive government. As of October 2004, the state has received acknowledgements of 6,850 Industrial Entrepreneurs Memorandums (lEMs) for an estimated investment of US$ 59.24 billion.

According to the Annual Survey of Industries (2002-03), Gujarat ranks second in respect of state-wise percentage share in Net Value Added by manufacturing in the factory sector of the country.

• Gujarat is India's most industrialised state. It accounts for 20 per cent of India's manufacturing output, 21 per cent of its exports and 30 per cent of its stock market capitalisation

• Gujarat's rate of growth of industrial outputis 18 per cent (2003-04)

• Gujarat ranks third in number of factories in the country

• It is a leading state in terms of per capita gross output and per capita value added in industries

• Projects worth US$ 7.3 billion are under implementation

A majority of the state's population continues to rely on agriculture as its principal source of livelihood. Though cash crop cultivation is the predominant feature of agriculture, the state has the potential to grow a wide variety of agricultural and horticultural crops owing to its varied agro-climatic zones.

•  Gujarat is India's leading producer of castor, cotton, tobacco, groundnut, sesame seeds and fennel seeds

• It is one of India's largest exporters of oil seeds and value added products, psyllium husk, cummin, dehydrated onion, dehydrated garlic, fruits and vegetables

• In 2004, 239 projects with an investment of US$ 596 million were commissioned in the agro-marine and food processing sector. Presently, 103 projects with investment worth US$ 452 million are known to be under implementation

Gujarat is endowed with a rich and diverse mineral base. Principal minerals found in the state are limestone, lignite and low-grade bauxite.

• It is the second largest producer of lignite in the country producing 6.7 million tonnes (2003-04)

• It is the second largest producer of oil and natural gas producing 6.13 million tonnes and 3.42 million cubic metres respectively in 2003-04

• It is the country's fourth largest producer of bauxite producing 1.97 million tonnes in 2003-04

• The state produced 19.16 million tonnes of limestone in 2003-04 and is one of the largest producers of soda ash

The recent successes in natural gas explorations in the state have made an immense impact on the industry. Riding on the wave of the recent gas discoveries, India's first LNG terminal has been commissioned at Dahej port and a gas pipeline grid is under construction. Both these initiatives would provide inexpensive and clean fuel to industry in Gujarat giving it a distinctive advantage.

Content Source: www.ibef.org