Large-scale industries

India’s liberalisation policy of 1991 removed the licensing requirements for most industrial sectors except five. Industrial undertakings exempted from obtaining an industrial licence are now required to file an industrial entrepreneur memorandum (IEM) with the Secretariat of Industrial Assistance (SIA) in the Ministry of Commerce and Industry, New Delhi under the Industries (Development and Regulation) Act, 1951. In the case of setting up of an export-oriented unit (EOU) or setting up of a project in a Special Economic Zone (SEZ), the project proponent needs to file a letter of intent (LOI) after which a letter of permission (LOP) is issued. Thus, the procedure for setting up a large industrial unit would be either filing of an IEM and getting industrial license or obtaining an

LOP. The analysis is for the manufacturing units which were commissioned until December 2017. The data obtained has been cleaned for categories other than manufacturing, such as tourism projects and infrastructure projects.

District-wise distribution of large-scale units

The district-wise distribution of large-scale units in Gujarat is represented in Table 4.1. Surat has the maximum number of large-scale units. It also has the maximum investments in the large-scale category. The top five districts—Surat (16.7 per cent), Bharuch (12.6 per cent), Valsad (12.3 per cent), Ahmedabad (10.8

TABLE 4.1 District-wise distribution of the large-scale manufacturing units

Source: Unpublished data from Industries Commissionerate.

per cent) and Vadodara (10.7 per cent)—have 63 per cent share of large-scale units. All the five districts are located in the golden corridor. The Kachchh district also shows a high concentration of large-scale units and is at number six in terms of share of units. Many units were set up in Kachchh after the 2001 earthquake as the government announced fiscal incentives for attracting investments to resurrect economic activities.

Bharuch is at number two in terms oflocation of large-scale units. The district was identified as one of the backward districts in 1971 by the Pande Committee and received various incentives under central and state policies. The proximity to developed districts of Surat and Vadodara and the location of the district in the golden corridor has attracted lots of industrial investments to this district. The other two backward districts—Panchmahal and Surendranagar—have not been able to gain much, mainly due to their location and lack of enabling infrastructure.

There are five districts—Tapi, Dang, Gir Somnath, Chhota Udaipur, Mahisagar—which do not have a single large-scale unit. There are others which have a single digit number of large-scale units and these are Panchmahal, Botad, Dahod, Aravalli and Narmada. There are many districts with a less than one per cent share of large-scale units (Sabarkantha, Junagadh, Navsari, Surendranagar, Banaskantha, Porbandar, Amreli and Patan). This indicates that earlier policies favouring location-based incentives have not really resulted in a regional dispersal of industries and have had limited impact in attracting investments in lesser developed areas. The large-scale manufacturing units have been set up at locations which are already developed or are near developed areas.