Untitled Document
  
 

Mumbai is the financial hub of India and is the capital of Maharashtra. The city houses the headquarters of major financial institutions, large corporates, multinational companies, insurance companies, mutual fund houses and two premier stock exchanges – Bombay Stock Exchange and National Stock Exchange. Mumbai is one of India’s eminent commercial and entertainment centres and was recently ranked as an ‘Alpha World City’ .

Mumbai and its adjoining areas have high industrial presence. Companies from many industries, ITeS, chemical, pharmaceutical, textile and other manufacturing entities, are spread in and around Mumbai. The need for industrial, infrastructural and economic devolvement of Mumbai and surrounding areas led to the formation of Mumbai Metropolitan Region (MMR). MMR, as defined by MMRDA Act, 1974, encompasses a total area of 4,355 sq km and consists of the following administrative units:

The MMR consists of seven municipal corporations, Greater Mumbai, Thane, Kalyan-Dombivali, Navi Mumbai, Mira- Bhayander, Bhiwandi-Nizampur and Ulhasnagar, and 13 municipal councils (six in Thane district and seven in Raigad district). Among these seven corporations, Greater Mumbai constitutes about 10% of the total geographic area and 63% of the population in the region.

Due to the strong demographic features and good infrastructure in the MMR, domestic and international enterprises, and investors have committed investments in the region. The large foreign direct investments and the establishment of large corporate entities gave impetus to the region to grow rapidly and robustly.

The MMR is the prime business and commercial region of India and witnesses heavy influx of immigrants; the region accounts for 23% of the total population of Maharashtra. The income levels of people residing in the region have increased due to the massive scale of commercial development and the emergence of large corporates in the region. The per capita income in the region is higher than not only Maharashtra’s per capita income but also the nation’s per capita income at Rs 33,283.

The share of the MMR in the GDP of Maharashtra in 2007-08 (preliminary estimates) was as high as 36.5%. Within the MMR, Greater Mumbai (suburbs and city districts) accounted for a large proportion of the population and economic activities; the population of Greater Mumbai constituted 63% of the population of MMR (2001) and its GDP constituted 58.6% of the GDP of MMR (2007-08).

Infrastructure

Evidently, for the industrial and economic development of any region, strong transit and transport facilities is a must. The entire MMR region is well-connected by all modes of transports, and has a fairly-developed, intra-region and inter-region road connectivity.

Roads, railways and highways

The superior infrastructure of Mumbai has lent its way to a strong business network in the city. The two vital road networks in the city are the Eastern Express Highway that stretches from Sion to Mulund, and the Western Express Highway that stretches from Bandra to Borivali. Mumbai is connected to Pune through the Mumbai-Pune Expressway, which is the first expressway ever built in India, and is being connected to Vadodara through the Mumbai-Vadodara Expressway that is under construction. The connectivity of the city to the national highways that span across South and North India has further pushed the commercial and trade development in the region.

Urban Transport

The road network within the city and its suburbs is well-developed. The road length within Mumbai is around 2,000 km and comprises about 1,950 km of Municipal Corporation of Greater Mumbai (MCGM)-maintained-roads, and about 50 km of state highways.

The road networks are properly maintained and serviced by MCGM from time to time. Apart from maintaining the road network, the MCGM also maintains flyovers, bridges and over bridges. The Maharashtra State Road Development Corporation (MSRDC) allocates and oversees the construction of flyovers and bridges in the city.

Suburban Railways

The areas in Mumbai and its suburbs are covered expansively by the suburban railway system of Indian Railways. Two zonal railways, Western Railways (WR) and Central Railways (CR), operate under the Mumbai Suburban Railway System, and cover almost 319 route sq km. Almost 6.3 million commuters travel daily on these two suburban railway systems everyday.

Nonetheless, the infrastructural facilities in the region need to ameliorate further to support the thriving commercial developments and ever-increasing passenger traffic. The existing suburban rail service carries about 6.3 million passengers every day, while the public bus transport system carries about 4.5 million passengers every day. Trains with a capacity to accommodate approximately 1,700 passengers each carry around 4,500 passengers during peak hours. Many initiatives are being undertaken to decongest the existing transport system.

The important projects that will be or are being undertaken to meet the growing infrastructure needs of the region are as follows:

Ports

The proximity of the MMR to the Arabian Sea in the western coast of India is advantageous for the region. There are around 10 minor and two major ports in the MMR that enhance its connectivity. The two major ports in Maharashtra: Mumbai Port Trust (MbPT) and Jawaharlal Nehru Port Trust (JNPT) are located in Mumbai. These ports provide a strategic benefit in terms of business expansion to the MMR. In FY09 MbPT and JNPT handled 51.9 MMT and 57.3 MMT of cargo traffic, respectively.

Both the major ports in the MMR account for 21% of the total cargo traffic that is handled by major ports of India. JNPT majorly handles container cargo. In FY09, 88% of the total cargo handled at JNPT was container cargo. Of the total container traffic in FY09, 54% was handled by JNPT alone. On the other hand, MbPT specialises in handling petroleum, oil, lubricants (P.O.L) cargo traffic. In FY09, of all the traffic handled at MbPT 66% was P.O.L cargo.

Air Transport

Mumbai has one airport with different terminals for domestic and international destinations. The airport in Mumbai has always remained at the foremost position in terms of both passenger and cargo traffic. Nagpur is also gaining traction in terms of passenger traffic and is depicting the highest growth in the same as compared with Mumbai and Pune. The City and Industrial Development Corporation (CIDCO) has proposed an international airport at Navi Mumbai to be spread across 950 hectares.

Communication

The communication system in the MMR comprises posts, telegraphs, telephones and voice, video and data telecommunication. This system forms an integral part of the development process. The telecommunication system in Mumbai is operated both by the private operators and public undertakings.

Industrial set-up

Mumbai is considered as India’s financial capital and it serves as an economic hub as well. The city housed industrial establishments such as textile mills and commodities until the 17th century but in the middle of the eighteenth century, it emerged as a significant trading town; subsequently, it diversified to industries such as engineering, diamond-polishing, leather and healthcare.

However, post-liberalisation, the city witnessed economic boom and massive industrial development; as a result, companies engaged in industries such as BFSI, IT, media, telecom etc flourished in the city – a trend that provided huge scope for growth to MSMEs and large enterprises in the city.

The state government established industrial estates in these areas on a co-operative basis to sustain the development in rural areas. The state government also provided several facilities in terms of contribution to share capital and technical guidance for establishing industries in co-operative industrial estates.

Government agencies assisting industrial development

Various government organisations are present in Mumbai that provide facilities to industries operating in the state. Given below are some government organisations that operate in Mumbai:

Maharashtra Industrial Development Corporation:

Maharashtra Industrial Development Corporation (MIDC) was established in 1962. The Maharashtra government instituted this industrial infrastructure development agency. MIDC functions as a special planning authority that plans industrial areas for systematic industrial development.

The activities of MIDC can be divided under the following 3 broad categories:

The MIDC has built around 225 industrial complexes in 130,000 acres of land. It develops industrial areas with essential infrastructure such as roads, water, electricity and other services for entrepreneurs.

MIDC is largely confined with the responsibility of achieving planned and systematic industrial development across the state. In Greater Mumbai, the organisation has one major estate that includes 305 industrial units and employs 135,000. Besides, industrial estates, an SEZ called SEEPZ is set up in Mumbai for the electronics, gems and jewellery industry.

Apart from setting up these organisations, the state government has also introduced the following important programmes through MIDC for faster development in the region:

Maharashtra Small Scale Industries Development Corporation

The Maharashtra Small Scale Industries Development Corporation (MSSIDC) was set up in 1962 to assist the development of small-scale industries. MSSIDC provides support services such as consultancy, counselling, marketing, training in technical and managerial aspects, commercial warehousing, entrepreneurship development programme etc.

Apart from the above two institutions, the Maharashtra State Khadi and Village Industries Board (MSKVIB) organises, develops and expands activities of Khadi and Village Industries (KVI) in the state. The Board provides financial assistance to individuals, registered institutions and co-operatives. It also provides technical guidance and training to individual beneficiaries and makes arrangements for marketing products made by the village industries. Presently 98 categories of industries fall under the purview of the KVI sector.

Other government agencies that provide support to industries

Maharashtra State Financial Corporation

Maharashtra State Financial Corporation (MSFC) is a statutory corporation that provides medium and long-term assistance to small and medium-scale industries for acquiring fixed assets like land, building, plant and machinery. Maharashtra, Goa and the Union Territory of Daman and Diu fall under its jurisdiction.

The State Industrial & Investment Corporation of Maharashtra Limited

SICOM is a premium financial institution that was established by the Maharashtra government in 1966 as a 100% stateowned company to industrialise backward areas of the state. SICOM provides tailor-made financial solutions and advisory services to entrepreneurs, companies in the private and public sector and government bodies.

Maharashtra Economic Development Council

The Maharashtra Economic Development Council (MEDC) was established in 1957 jointly by all prominent Chambers of Commerce and Business and industry associations in Maharashtra. MEDC acts as an investment facilitator and as a catalyst in economic development. It undertakes special research projects and presents studies and reports on various aspects of the economy in general, and trade and industry in particular.

Assistance by the Maharashtra government

The Maharashtra government has initiated several measures to promote sustainable growth of the SME sector in the state. The industrial, investment and infrastructure policy of Maharashtra 2006 is the state’s endeavour in this direction.

Policy Targets

The state has identified some thrust areas to meet its policy targets faster and these thrust areas include infrastructure, manufacturing sectors like agro-based industries, textiles, pharmaceuticals and gems and jewellery, and services such as information technology, IT-enabled services, biotechnology, and nanotechnology.

Promotional and financial incentives

New projects that are set up in the thrust areas in different parts of the state will be eligible for Industrial Promotion Subsidy. The quantum of subsidy will be linked to the fixed capital investment. Payment of IPS every year will be equal to 25% of any relevant tax paid by the eligible unit to the Maharashtra government or to any of its departments or agencies. The quantum of benefit and period will be as follows:

Strengthening the SME sector

Looking at the impressive growth that the SME sector has registered in the last few years, especially in light engineering, textiles, biotech and IT, the state government is giving a special focus to the SME sector to achieve its objective of high growth with greater employment opportunities. The state is also looking forward to establishing a special institution for the SMEs. Moreover, it is also providing the following incentives to promote quality competitiveness, research and development and technology upgradation:

Cluster approach for development

The state will adopt a new and innovative approach towards cluster development, which will greatly improve manufacturing competitiveness. The MIDC will lay special emphasis on cluster-based development of its areas by reserving some areas within the MIDC for specific industries and their ancillaries. Eligible units setting up facilities in the clusters coming up in “C”, “D”,”D+” area will be entitled to the IPS applicable to one step higher incentive category under clause 9.1.

Package scheme of incentives

The most recent Package Scheme of Incentives (PSI) was declared in 2007, which is being implemented for 4 financial years starting from April 1, 2007. Only micro and small enterprises, medium enterprises and large-scale companies from all sectors, except the central public sector, are eligible for getting incentives under PSI 2007. In order to implement the scheme effectively, tehsils in the state are classified as A, B, C, D, D+ and ‘no industry district’ according to their level of industrial development.

Some measures under this scheme are listed below:

Industry associations

As a prominent business centre, Mumbai houses many industrial associations that operate in various sectors. Besides operating in Mumbai, some of these institutions operate at a national level too.

Education institutions

Mumbai has a high literacy percentage of around 87% and its citizens have a high standard of living, which has encouraged the presence of educational institutions. Many institutions that are affiliated with foreign universities provide an international exposure to students of the city. Besides, there are many institutions that act as autonomous universities and provide varied courses in different areas. Apart from these, premium management schools such as JBIMS and SP Jain and engineering and technology schools such as IIT exists in the city. Given below is an indicative list of the educational institutions present in Mumbai:

Banks and financial institutions

As Mumbai is a prominent commercial centre, the business houses that are present in the city have high financial needs. Further, its remarkable commercial development has made the city an international and domestic investment destination that has attracted large and premium financial institutions to operate in the city. Apart from the financial institutions, Mumbai also houses many multinational banks and small co-operative banks that cater to the needs of different strata of the society. As on September 2008, Mumbai had 1,734 banking offices as compared with 1,649 in the corresponding previous year.