1

Service Sector

Presence Across Industry Sectors

Gujarat: A Thriving Industrial State

30%

22%

19.20%

17%

15.60%

14%

9.90%

9.50%

6%

5%

Stock market capitalisation

Longest Coastline

Exports

Fixed Capital Investment

Value of Output

Net Value

Factorories

Employees

Geographical Area

Population

18%

25%

28%

35%

42.30%

50%

58%

65%

80%

85%

98%

Textiles

Sea Cargo

Pharmaceuticals

Cotton

Groundnut

Chemicals

Petrochemicals

Plastic Industry

Diamond Processing

Salt Processing

Soda Ash Production

Contributing to India’s economy across all major sectors…

Petroleum products

Chemical & Pharma

Engineering

Food processing

Textiles & Apparels

Mineral based industries

Others

34%

23%

17.6%

10.3%

6.3%

2.50%

6.30%

…India’s largest producer of cotton

…World’s 3rd largest producer of denim

…Asia’s largest grass root petroleum refinery at Jamnagar

…India’s first LNG Chemical Port Terminal at Hazira

…World’s largest producer of castor and cumin

…World’s largest gas based single location sponge iron plant

…World’s largest producer of processed diamonds

Significant share in key industry sectors & products

Source: Socio Economic Review 2007-08

Gujarat: Economic Snapshot

Gross State Domestic Product(GSDP) : USD 45.3 Billion

Per Capita Income : USD 722

Urbanisation : 37.36%

Gujarat has demonstrated a 12.5% high industrial

growth rate from 2002 -2007

Gujarat is home to 800 large industries & over

3,20,000 micro, small and medium industries

Gujarat An Enduring Strong Economy

Composition of GSDP as per Economic Activity

P rim a ry S e cto r

S e co n d a ry S e cto r

T ertia ry S ec to r

P rim a ry S e cto r

S e co n d a ry S e cto r

T ertia ry S ec to r

18.22%

37.78%

44%

Growth Rate in 2006-07Source: Socio Economic Review 2007-08

Power 23 Power Plants of Electricity Generation Capacity – 9,561 MW (2007) and estimated to rise to 14,031 MW (2012)

Robust Infrastructure

Per capita power consumption is 1,354 units whereas India’s average is 665 units

Rich availability of natural gas (34 MMCD) and Lignite (1,072 MMT)

24-hour power supply to 98% of the villages

Only State to carry out interlinking of rivers

An extensive water grid network across the State

The water grid is a network of 75,000 km for water distribution for irrigation

75% population proposed to be covered by the grid by 2010

Total length of the existing GSPL pipeline is 14,53,163.33 meter supplying to 18 districts Gas

The pipelines of Gujarat State Petronet Limited (GSPL) supply gas to 13 districts, 5 more districts are proposed

to be connected by the pipeline

Total length of Integrated Gas Grid supplying gas to all districts is 2,200 km, of which 1,200 km is complete

and 800 km is under construction

Water

Robust Infrastructure

First State to privatize ports

42 ports along 1600 km coastline, including 1 major port at Kandla and 41 minor ports

Cost efficient transportation of natural gas, crude oil and petroleum products from Middle East and Europe

Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited, Green field port at

Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej developed by Petronet LNG Ltd.

and Pipapav port developed by Gujarat Pipapav Port Ltd.

Ports

Gujarat is well connected to major cities in the USA, EU, Asia and other Indian metropolitan cities

13 airports under the operational jurisdiction of Airports Authority of India (AAI), at Vadodara, Surat, Jamnagar,

Rajkot, Bhavnagar, Porbandar, Bhuj, Diu, Mandvi, Mundra, Kandla and Palanpur, including one international

airport at Ahmedabad

Airports

Rail & Road 71% of the road in the State is surfaced

State-of-the-art road infrastructure such as India’s first National Expressway from Ahmedabad to Baroda.

Total road length is 74, 111 Km; Target road length is 1,14,866 Km

Total length of railways in Gujarat is 5,188 km (8.25% of India)

6

Service Sector at a Glance

The service sector consists of the "soft" parts of the economy such as

insurance, government, tourism, banking, retail, education, and social

services. In soft-sector employment, people use time to deploy knowledge

assets, collaboration assets, and process-engagement to create

productivity (effectiveness), performance improvement potential (potential)

and sustainability.

Typically service sector employment include:

Hotels & Restaurants

Communication (Post/Telecom)

Banking & Insurance

Education & HRD

Consulting

Business services

IT/ITes

Tourism

Transport & Storage

Healthcare/hospitals

Real estate

7

India’s Service Sector at a Glance

India’s service sector is larger and growing

faster than that of economies with higher per

capita GDP as shown in the graph

Rapidly increasing two-way trade in

information technology and information

technology enabled services (IT–ITES) and

other high-end services sub-sectors has

been a critical factor in India’s improved

economic performance.

‘[Information Technology (IT) and IT Enabled Services] can do for India what automotives did for Japan and oil for Saudi Arabia.’ (Noshir Kaka, Principal, McKinsey & Company)

India’s growing services sector

Vietnam India Indonesia China Thailand Malaysia Republic of Korea

70

60

50

40

30

20

10

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16000

14000

12000

10000

8000

6000

4000

2000

0

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P

Cur

rent

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Vietnam India Indonesia China Thailand Malaysia Republic of Korea

70

60

50

40

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20

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16000

14000

12000

10000

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1985-891990-941995-992000-042004 per capita GDP

1985-891990-941995-992000-042004 per capita GDP

The service sector recorded a robust 9.1 % average growth, while total GDP grew at 7.0 % in the first

four years of the tenth Five Year Plan (2002–07).

8

Indian Service Sector at a Glance

India’s large pool of engineering talent and its rapidly expanding telecommunications

sector, IT–ITES have in recent years been the key catalyst of growth.

Growth and improved efficiencies in other key areas, such as financial services,

transportation and transport infrastructure, are vital to facilitating expansion of service

sectors of the economy.

Services sector has been buoyant through out the fiscal year 2006-07. This can be gauged

from revised estimates of gross domestic product (GDP) for 2006-07 released by central

statistical organisation (CSO), which has projected the real GDP emanating from services

sector to grow at 11 % from over 9.8% of the previous year.

The ‘trade, hotels, transport and communication’ group is set to grow at 13% during the

same period, registering significant improvement over 10.4% achieved a year ago. .

9

Gujarat Service Sector at a GlanceService sector in Gujarat is growing at a highest growth rate of 15.99% among the other sectors.

Services contributed 44 per cent of GSDP in 2007–08 compared with 41.45 per cent based on the earlier 2006-2007.

The growth of the services sector has been augmented by increasing industrial activity.

Growth and improved efficiencies in key areas, such as financial services, transportation and transport infrastructure, are vital to facilitating expansion of other sectors of the economy.

11.36%

15.99%

17.95%

Primary

Secondary

Tertiary

Growth across sectors (2006-2007)

Composition of GSDP as per Economic Activity (2006-2007)

18.22%

37.78%

44%

P rim a ry S e c to r

S e c o n d a ry S e c to r

T e r t ia ry S e c to r

P rim a ry S e c to r

S e c o n d a ry S e c to r

T e r t ia ry S e c to r

100100100100Total GSDP 4441.4542.2940.32Tertiary3

29.8929.3630.1829.62Manufacturing2.1

37.7838.3238.639.25Secondary215.2917.2114.7915.54Agriculture1.118.2220.2319.1120.43Primary1

2006-072005-062006- 072005- 06

At Constant PricesAt Current PricesSectorS.no.GSDP – Sectoral Contribution (%)

Source: Socio Economic Review 2007-2008

Source: Socio Economic Review 2007-2008

GSDP: Gross State Domestic Product

10

Gujarat Service Sector at a GlanceEmployment Distribution

Employment is distributed across service sector with community, social & personal service accounting for 0.6 million followed by transport, storage and communication

The total employment in public sector and private sector has increased from 1.75 million at the end of June-2006 to 1.80 million at the end of June-2007 growing at 2.33%

The employment in private sector has increased to 0.944 million at the end of June-2006 to 1.00 million at the end of June-2007.

152000 12300056000 52000 51000

600000

0100000200000300000

400000500000600000700000

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omm

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During the year 2006-07, 2.84 lakh persons have registered in the employment exchanges and 0.142

million have placed in employment as against 0.227 million persons registered and 0.131 million persons

placed in employment during 2005-06.

During the year 2007-08 (April-September-2007) 0.185 million persons have been registered in the

employment exchanges and 0.83 lakh have been placed in employment.

Employment distribution across services sector

11

Education Service

India’s premier institutes in Gujarat

Gujarat had an effective literacy rate of 61.2% as per 1991 census. Gujarat aims to have 100% literacy by 2010.

Knowledge-based industries have been prominent among the fastest growing services in Gujarat

The provisional number of educational institutions imparting primary education is 39,064 in 2006-07

The total intake capacity for technical education was 14551 seats in degree engineering, 220 in degree architecture course and 3045 in degree pharmacy course. While in 2007-08, 1140 seats, 40 seats and 660 seats have been added in degree pharmacy bring total intake capacity to 15691 seats.

31 Universities and 44 degree engineering and 57 diploma colleges provides a pool of quality knowledge manpower

Every year 0.7 million graduates are passing through Gujarat

4005

2601530

3405

15241

960

19480

Degree Engg. & Hotel Mgmt.

Degree Pharmacy

Degree Architecture & Allied

MCA

MBA/ PGDBM

Diploma Engg. & HotelMgmt.

Education Infrastructure

12

Education Service

With increasing growth of knowledge-based industries and increase in the need for technical manpower, the state is focusing on the development of a good academic foundation.

Education Infrastructure Opportunities

Setting up of short term courses in existing ITI, Polytechnics and Engineering Colleges

Setting up of anchor Institutes in different focus industry sectors.

Setting up of Bio-Technology research oriented institutions covering a wide variety of contract research (pre-clinical and clinical) bioremediation and quality certification / validation facilities and institutes speciallizing in post graduate courses, specialized courses and value added courses

Opportunities in health-care sector to initiate clinical research institutes, HealthcareOutsourcing (BPO)

13

Healthcare Sector

79%

17%4%

Primary CareSecondary CareTertiary Care

Heathcare is important for having a healthy productive

workforce and general welfare so as to achieve population

stabilization.

Gujarat is on forefront of establishing and maintaining good

health infrastructure at various levels. Currently 1424 health

institutions are functioning at various levels 1073 primary health

centers, 273 community health centers & sub district level

hospitals, 25 district level hospitals and 30 others.

Gujarat offers holistic medicinal services and cost effective

treatment through various District hospitals, Sub district

hospitals and Private Specialty Hospitals

Most sought after Super – Specialties in the State include

Cardiology, Neuro – Surgery, Orthopedics, Infertility treatment,

joint replacement and eye surgeriesSource: Office of Commissioner Of Health : Government of Gujarat

Sub - District

Hospital, 25

Private Specialty Hospital,

20

District Hospital ,

25

Gujarat Healthcare Infrastructure (2005 – 2006)

Hospitals in Gujarat (2005-2006)

14

35086

36831

38013

39461 39734

32000

33000

34000

35000

36000

37000

38000

39000

40000

41000

2002 2003 2004 2005 2006

No. of Registered Doctors (2006)

Healthcare Sector

During the year 2006-07, 36.918 million patients

were treated in the outdoor while 3.253 million

patients were treated in the indoor through

Government medical institutions

Gujarat has 13 medical colleges, 39,734 registered

Doctors and 16,816 registered nurses

The state government’s initiatives in healthcare have

been nationally and internationally recognised:

Chiranjeevi Scheme was awarded the Asian Innovation Award 2006 at the Global Entrepolis Singapore by the

Singapore Economic Development Board. Dataquest e-Governance initiative National Award presented to

Commissionerate of Health and Family Welfare for e-Governance in Integrated Disease Surveillance Project.

15

Gujarat is becoming a preferred medical tourist

destination. About 1,200 to 1,500 Non Resident Indian’s,

Non Resident Gujaratis (NRG’s) and a small percentage

of foreigners come every year for different medical

treatments. Gujarat contributes close to 25-31% of the

total medical tourism business in India.

Gujarat is evolving in terms of number of hospitals,

healthcare centres, beds and are expected to continue a

positive trend in future. Doctor to patient ratio is 1 : 10

and nurse to patient ratio is 1: 5

Market for tertiary care expected to grow at a faster rate,

due to rise in income levels, increasing adoption of

health insurance and rise in complex in-patient ailments(

heart diseases, kidney ailments, cancer.

The State Government is taking several initiatives to

make Gujarat a Global healthcare destination

Medical Tourists visiting India, 2000-2006

10000

40000

140000

230000

0

50000

100000

150000

200000

250000

2000 2001 2002 2003 2004 2005 2006

Cost Effectiveness, Higher ProductivityAccelerated Delievery, Clear Customer

FocusEnhanced Social Service, Recovery of user

charges

Benefits of Public Private Partnership

Healthcare Sector

16

Information technology enabled services (ITeS) and IT

hardware industry are the focus growth areas of Gujarat’s

IT industry

Gujarat currently has about 22,358 professionals in the

sector

Software exports from the State saw a growth rate of

107.3% to reach USD 134 million in FY 2006-07 as

compared to that of FY 2005-06

The IT/ITeS sector turnover should grow from USD 60

million in 2005 to USD 2.4 billion in 2010-11

The Information and Communication Technology (ICT)

sector in Gujarat is projected to see investments of up to

USD 3.7 billion by 2010

Emerging IT/ITeS destinations

Information Technology

Rajkot

Ahmedabad

Gandhi Nagar

Vadodara

SuratBhavnagar

3548.86

64.64

134

FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07

Software exports (in USD million)

Source: DST, Government of Gujarat

17

India’s GDP and the IT sector

The projected Software Exports will be approximately 241 million USD in 2011 - 2012

The State produces around 6,11,909 graduates every year, nearly 14.5% of which can be directly form the IT workforce base and the rest have the eligibility to be employed in the ITeS sector.

The state has 37 AICTE approved engineering colleges which produce nearly 13,000 students every year.

The main focus is on an extensive critical infrastructure and a sound e-commerce foundation plentiful opportunities in IT enabled services.

The government has also taken initiatives on Gujarati language software standardization which will help improve interoperability of software/database among the government departments.

The state shall provide highest of security for the operation of IT/ITES units.

Software Exports (Projected ) IT Manpower (Projected )

Source: Frost & Sullivan

Information Technology

22,958

30,25128,23526,35324,597

05,000

10,00015,000

20,00025,00030,00035,000

2007-08 2008-09 2009-10 2010-11 2011-12

No430

568750

990 991

0200400600800

1,0001,200

2007-08 2008-09 2009-10 2010-11 2011-12

No

18

Tourism SectorGujarat has immense potential to become a major tourist destination. Its historical monuments represent the great religions of Asia – Hindu, Buddhist, Jain, Islamic, Parsee and Sikh.

There are more than 400 archaeological sites in the state including some of the most substantial excavations of Indus Valley civilization period at Lothal (near Ahmedabad), Surkotada and Dholavira (in Kutch).

The archaeological zone of Champaner - Pavagadh have been acclaimed by UNESCO as the “World Heritage Site”because of its great mosques, temples, stepwells and forts. The Wild Ass sanctuary,Dholavira Harappan City and Rani-Ki-Vav are in the process of getting status of the World Heritage site.

The state has important pilgrimage places like Dwarka, Somnath, Dakor, Ambaji, Udwada, Navsari and Surat for Parsees, Palitana, Girnar, etc

21%

77%

2%

With in Gujarat OIS * Foreigners

Tourist Flow in Gujarat

IT Manpower (Projected )

6.167.98 7.61

10.712.34

02468

101214

2002

-03

2003

-04

2004

-05

2005

- 06

2006

- 07

Num

ber

of T

ouri

sts

(mill

ions

)

19

More than 2000 Fairs and Festivals are organised every year. Important state for Event-based tourism especially based on Navratri, Kite Festival and Tarnetar Fair (The Ternatar Fair popularly known as the Trinetreshwar Mahadev Mela revolves around the scared temple 'Trinetreshwar‘)

The State witnessed total 12.34 million tourists during 2006 – 07 out of which 12.1 million were the domestic tourists and 0.20 million foreign tourists. The average contribution of tourism industry to the State’s GDP is close to 2.5 %, while the comparable figure for India is 5.3%. The average foreign touristspend per person per day is close to USD 700 to 1050 in Gujarat

Domestic Tourists Foreign Tourists

Rs. 500Rs. 630

$700-1050

$1250

Gujarat India Gujarat India

Average Tourist Spend (one person per day)

Tourism Sector

Opportunities for knowledge and leisure, restaurants & cafetarias infrastructure is Junagadh, Bhavnagar, Modhera, Sidhhpur, Idar, Pavagadh, Adalaj, Vadodara, Dandi, Ranpur, Rajkot, Jamnagar, Dholavira, Lothal, Morbi, Somnath, Ahmedabad, Vadnagar

The tourism sector in Gujarat has attracted dozens of hoteliers, because of its proximity to leading tourist states. Hotels have lined up 2593 USD million worth of investments, which are expected to create 26,370 jobs. Medical tourism is a recent concept in India and Gujarat has been able to match world standards in almost all areas of treatment.

20

There were nearly, 2.36 million telephone connections

(including W.L.L.) working in the State.

India’s leading GSM players like Vodafone, Idea

Cellular, Bharti Cellular, and Bharat Sanchar Nigam Ltd.

(BSNL), have been given licenses to provide GSM

Cellular Telephone Services while Reliance

communication and Tata Telecom have been given

licenses to provide CDMA cellular telephone services in

telecom circle of Gujarat.

The state’s share in the countrywide outstanding

subscriber base rallied around 7.34%.

An investment of 682 USD million is announced in the

state followed by 60 USD million of proposed investment

Telecom Sector

7413500No of Cellphone Subscribers (2006)

146176No. of Internet Subscribers

17.48Phones per sq.km (including WLL + mobile)

6.77Phones per 100 population (including WLL + mobile

Telecommunication Snapshot

4671045

20733089

5041

0100020003000400050006000

2001-02 2002-03 2003-04 2005-05 2005-0600

0

Cellular Subscribers Trend in Gujarat

21

The industrialization of the state has helped the real estate sector to groom in different cities. The cost

of real estate properties in the cities like Ahmadabad, Gandhinagar, Vadodara, Surat etc are very

encouraging and these have emerged as important sectors for investment.

The real estate sector has witnessed enormous growth. There are many factors for this like retail,

finance, IT, BPO and telecom, there is a boom in real estate too.

Gujarat, which has a strong middle class population and one of the highest per capita GDP, is now

becoming a preferred destination for the organized retail sector. This is evident with the spurt of malls

in the state with companies like Prozone that are looking at setting up their first two malls in Rajkot

and Surat before entering other cities in India. Raymond, too, started its first kids apparel store, Zapp,

in Ahmedabad before entering markets like Mumbai and Pune.

The State offers great road connectivity and reliable power supply to its consumers. It has one of the

highest per capita power consumption (1175 units, as compared to India’s average of 592 units) and

competitive commercial real estate rates in comparison to other states in India.

Real Estate Sector

22

Apparels and jewellery retailing offers tremendous opportunities for the sector.

Gujarat, which, is the hub for textile and jewellery manufacturing in India is well positioned to exploit this opportunity.

With organized retail constituting only 3% of the total Indian retail, the state offers a huge potential for growth.

The state aims to increase the availability of specialized courses like retail management, which can go a long way to serve the need of quality human resources

Brand proliferation witnessed in recent years (last 4-5 years).

Rental Value Trend*

0

40

80

120

160

1994 2000 2007

* Quoted rentals in existing malls

Real Estate Sector

23

Civil Aviation

There is a tremendous growth in passenger traffic in the State.

Total passenger traffic in the State expanded by 27.2% to 31.5% recorded in the 2006-07.

The rise in passenger traffic was due to 38.25% hike in domestic passenger traffic to 0.267 million.

Cargo routed through the state airports revived by 22.96% from a decline of 5.52% recorded during 2006-

07.

Traffic of domestic passengers gained by a robust 41.47 percent after a 25.8%t.

A total of 6341 USD million of investment is in pipeline in Gujarat in 2007

Kutch

Jamnagar

Porbandar

JunagadhAmreli

Bhavnagar

Rajkot

Surendranagar

Banaskantha

PatanMehsana

Himmatnagar

Kheda PanchmahalDahod

Vadodara

Bharuch Narmada

Surat

Navsari

Valsad

Anand

GandhinagarAhmedabad

Invest in Gujarat : A World- class Business Destination

Knowledge Corridor

Chemicals, Petrochem. Pharma, Textiles &

Engineering

Industrial Corridor(DMIC)

55 Special Economic Zone (SEZs) across

Gujarat

Gujarat International Finance Tec City

Petroleum, Chemicals and Petrochemicals Investment Region

(PCPIR)

Bio-Tech Cluster

Soda Ash & Salt Based Industries,

Cement & Steel Pipes

202 Industrial Estates across Gujarat

Soda Ash and Salt Based

Engineering and Ceramics

18 Captive Ports along 1600 km coastline

across Gujarat

Special Investment Region (SIR)

Petroleum & Brass parts

To Delhi

To Bombay

Savli Biotech Park

25

Key Contacts

Industries Commissionerate, Government of Gujarat

iNDEXTb -Industrial Extension Bureau

http:// www.ic.gujarat.gov.in

http://www.indextb.com

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