Key industries
The economy of Chhattisgarh is largely natural resource driven and it
leverages the state's rich mineral resources.The key sectors where Chhattisgarh
has a competitive advantage include cement, mining, steel, aluminium and power.
CementChhattisgarh is the fifth largest producer of cement in India. With a capacity of over 8.6 million tonnes per annum, Chhattisgarh accounts for over 10 per cent of India's cement production.
The cement industry in India is witnessing significant growth in recent
years. With the domestic demand for cement expected to grow at 8-9 per cent
annually, cement production in India is projected to reach 160 million tonnes by
2007.
Chhattisgarh's advantage in the sector lies in the fact that it has large
limestone reserves. Limestone production stood at 13.7 million metric tonnes in
2002-03. At present, the state has 9 major cement plants and 12 mini cement
plants.
All the large cement producers have a significant presence in the state.These
include AV Birla Group (Grasim Industries, Ultratech Cemco), Gujarat Ambuja
Cement, ACC and Lafarge.
MiningChhattisgarh is rich in mineral resources and it is the only state in India with iron-ore reserves. One fifth of India's iron-ore reserves are located in the state. Other significant minerals found in the state include bauxite, dolomite and kaolin. In 2002-03, Chhattisgarh produced minerals worth US$ 900 million, contributing to 13 per cent of the mineral production in India.
The mining and quarrying sector contributed 12 per cent to the state's GSDP
in 2001-02.The state government is facilitating proper exploitation of its
mineral wealth by promoting mining and mineral based industries. The state
government aims to double the contribution of minerals to the state's GDP by
2010.To encourage investment in the Mining sector, the state has formulated a
Mineral policy, which seeks to simplify mining laws and leasing.
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Chhattisgarh -
Mineral production, 2001-02
|
| Mineral |
Production (million tonnes)
|
| Chhattisgarh |
India |
% share all India |
| Coal |
53.6 |
327.6 |
16.4 |
| Iron Ore |
18.1 |
86.3 |
20.9 |
| Bauxite |
0.55 |
8.6 |
6.3 |
| Dolomite |
0.84 |
3.2 |
26.4 |
| Kaolin |
0.17 |
0.85 |
19.7 |
Source: Indian Bureau of Mines, Government of India, 2002
Several private players with captive mining operations in the state include
Essar Steel, Jindal Steel and Power Ltd, South Eastern Coalfields Ltd, National
Mineral Development Corporation (a Government of India undertaking) etc.
Iron & SteelWith over 20 per cent of India's iron-ore reserves, Chhattisgarh has a competitive advantage in iron and steel industry. Presently, iron-ore is being exported from the Bailadila iron-ore mines of Dantewara district.
A number of prominent global and domestic players have also recently
announced plans to set up steel plants in Chhattisgarh. These include SAIL, which
plans to increase the proposed capacity of its plant at Bhilai from 4.9 million
tonnes per annum to 7 million tonnes per annum; Jindal Steel which plans to expand its finished steel
making capacity by 1 million tonnes per annum by March 2006; and Monnet Ispat
Ltd signed a memorandum of understanding (MoU) with CSIDC to implement projects
worth US$ 260 million for steel products, sponge iron and coal washery in the
state. Presently, a US$ 15 million project, to set up a ferro alloy production
plant at Raipur is under execution.The Government has also signed an MoU with
Visa Industries Ltd (US$ 225 million), Bhushan Ltd (US$ 500 million), and
Sanvijay Rolling & Engineering Ltd (US$ 100 million) for investing in sponge
iron & steel.
AluminumChhattisgarh's share in India's bauxite and coal reserves stands at 3.5 per
cent and 16 per cent respectively.This makes the state one of the leading
producers of aluminium in India. In 2003-04, it produced 100,000 tonnes of
aluminium, representing around 15 per cent of India's total production.
Some of the major projects under implementation in the state are a US$ 863
million expansion plan by BALCO, a part of theVedanta Resources Group, to
increase its aluminium production capacity from 100,000 tonnes per annum to
350,000 tonnes per annum by 2006. BALCO is also setting up a 540 MW electricity
generation plant for captive consumption. Jindal Steel and Power too plans to
set up a 50,000 tonnes capacity aluminium plant in the state with an envisaged
investment of US$ 90 million.The state government is setting up an Aluminium
Park in Bilaspur to encourage investment in the sector.
Exports
The value of the exports from Chhattisgarh stood at US$ 95 million in
2002-03, accounting for less than 1 per cent of the exports from the India.
Chhattisgarh exports iron-ore, cement, steel castings and equipment, railway
tracks and wagon parts, rice products, handicraft items and tussar silk.
Investment
Till 2003, Chhattisgarh attracted industrial investment in sectors such as
basic metals, other non-metallic mineral products, food products and manufacture
of coke, petroleum products. Basic metals account for more than 85 per cent of
the industrial investment in Chhattisgarh.
Source: Projects Today database, June 2004
Between 1996 and 2003, Chhattisgarh attracted over US$ 105 million of FDI.
Source: Secretariat for Industrial Assistance reports
As in 2003, investment projects totalling over US$ 9.8 billion were in
different stages of implementation.
Source: Annual Survey of Industries, 2002-03
Within manufacturing, basic metals including aluminium and iron & steel
accounted for the dominant share of investment.
Potential hubs for investment
Within three years of its formation, Chhattisgarh embarked on social and
economic development through policy reforms, focus on infrastructure development
and improving the investment climate in the state. The state is richly endowed
with natural resources and has large untapped potential for development.
Potential exists to substantially increase the pace of economic development in
the state by appropriate exploitation of its mineral wealth.
In addition to its present areas of strength in cement, mining and iron and
steel, a number of sectors are emerging with substantial potential for private
investment and business in Chhattisgarh. The most prominent among these are
electricity generation and infrastructure development.
PowerChhattisgarh has over 40 billion tonnes of coal reserves amounting to 16 per
cent of India's total coal reserves. It therefore has an edge over other states
as it can use these reserves for power generation.
Chhattisgarh already has surplus electricity generation capacity. Being
strategically located in central India, the electricity generated in the state
can be easily transmitted to any of India's four regional electricity grids or
to power deficient markets in India at competitive prices, particularly since
with the enactment of the New National Electricity Sector Legislation,
inter-state supply and trading of electricity is permitted. Chhattisgarh is
considered the power hub of India and has the potential to produce up to 50,000
MW of power. Several power capacities are also under implementation currently.
It is expected that the state will be the preferred destination for all power
intensive industries.
InfrastructureRecognising the need for development of infrastructure, the state has
identified infrastructure provisioning as an industry in its Industry Policy.The
state offers significant opportunities for infrastructure development through
private sector participation. A comprehensive Infrastructure Development Plan
Action has been prepared to identify infrastructure development needs of the
state and the Chhattisgarh Infrastructure Development Board has been set up to
catalyse investment in the state.The total investment requirement for
infrastructure development in the state is estimated to be US$ 22 billion.
Chhattisgarh has a track record of successful implementation of
public-private partnership for infrastructure development. In fact, it was the
first state in the country to have a public-private partnership in industrial
water supply.The first phase of the Borai industrial water supply project is
operational and it supplies 12 million litres of water every day.
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