Investment Skyline Of India

2,000 views

Published on

Investors' guide to the states of India

Investment Skyline of India is a guideline to the investors for identifying the best states in the country for investment purpose. We plan to take 8-10 broad parameters every quarter and identify the best states for investment in terms of those parameters. The first issue looks at selected demographic, infrastructure and market related parameters and identifies the 5 top states in the country for investments, for each of the parameters.
Methodology
Our purpose is to identify 5 leading states based on several relevant indicators that reflect investment friendliness. We have captured the state’s position for individual variables as well as collectively through constructing a composite index that accounts for all the variables. The specific indicators that have been selected for the inaugural issue are:
1.Urbanization process
2.State income
3. Capital formation
4. Infrastructure availability related to power
5. Infrastructure availability related transportation
6. Telecom facilities
7. Health infrastructure
8. Educational infrastructure
9. Market size
To depict the position of each state regarding individual variable, we computed median value for each of these variables. As the next step an index was formed taking the median value as 100 and the top 5 states have been identified based on the index value. To arrive at the final composite index that includes all the variables, we assigned equal weight to each variable. The composite value is the linear combination of each of these variables. After obtaining the composite value, we computed the median. The final index was formed based on the composite values considering the median value as 100.
Additionally, we have mapped the fastest growing districts, in terms of GDP growth over 5 years to identify the emerging pockets of interest for investors.
The Top 5 States in India Based on Final Composite Index
As clearly suggested by the graph below, Maharashtra emerges as the best possible state for investment purpose. The investment friendliness of the rest of the four states are almost equi-level. However, a few other states with closer final composite index value are Karnataka, West Bengal and Uttar Pradesh.


Urbanization process

Urban population (1st table and figure)
In terms of the size of urban population in the state, Maharashtra is the top ranking states. However, as per expectation, the bigger states find their place in the top 5 ranks in terms of this indicator.
State’s share to India’s total urban population (2nd table and figure)
Contribution of these 5 top ranking states is exactly half of India’s total urban population. This clearly suggests that the metro cities, namely, Mumbai, Chennai, Kolkata and Hyderabad play a major role in shaping India’s urban population concentration.
Urban growth (3rd table and figure)
It is important to notice that Goa and Mizoram, two smaller states of the country, figure among the top 5 states in terms of urban growth. Along with a faster penetration of urbanisation, smaller urban base in these state is a major force behind this pattern.

State income
Gross State Domestic Product (GSDP) (1st table and figure)
Being the financial and commercial hub of the country, Maharashtra is well ahead of other states. Apart from the 5 top ranking ones, Tamil Nadu and Karnataka can also be considered in the same league.
State’s share in India’s Gross Domestic Product (2nd table and figure)
The top 5 states account for 40% of the total GDP of the country. However, concentration of major economic activities in a few states is established further with the fact that the next 5 states contribute 37% to country’s GDP while the balance 18 states account for 23%.
Average annual growth over last 5 years (3rd table and figure)
The smaller states show faster growth in terms of state income mainly due to their small base of GSDP. Haryana is the only exception, which has been witnessing f

Published in: Business, Economy & Finance
2 Comments
0 Likes
Statistics
Notes



  • <b>[Comment posted from</b> http://www.indicus.net/media/index.php/magazine/1452-investment-skyline-of-india]
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here



  • <b>[Comment posted from</b> http://www.indicus.net/media/index.php/magazine/1452-investment-skyline-of-india]
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Be the first to like this

No Downloads
Views
Total views
2,000
On SlideShare
0
From Embeds
0
Number of Embeds
78
Actions
Shares
0
Downloads
69
Comments
2
Likes
0
Embeds 0
No embeds

No notes for slide

Investment Skyline Of India

  1. 1. Investment Skyline of India Investors' guide to the states of India Indicus Analytics Mumbai 24 August, 2009 Investment Skyline of India is a guideline to the investors for identifying the best states in the country for investment purpose. We plan to take 8-10 broad parameters every quarter and identify the best states for investment in terms of those parameters. The first issue looks at selected demographic, infrastructure and market related parameters and identifies the 5 top states in the country for investments, for each of the parameters. Methodology Our purpose is to identify 5 leading states based on several relevant indicators that reflect investment friendliness. We have captured the state’s position for individual variables as well as collectively through constructing a composite index that accounts for all the variables. The specific indicators that have been selected for the inaugural issue are: 1. Urbanization process 2. State income 3. Capital formation 4. Infrastructure availability related to power 5. Infrastructure availability related transportation 6. Telecom facilities 7. Health infrastructure 8. Educational infrastructure 9. Market size To depict the position of each state regarding individual variable, we computed median value for each of these variables. As the next step an index was formed taking the median value as 100 and the top 5 states have been identified based on the index value. To arrive at the final composite index that includes all the variables, we assigned equal weight to each variable. The composite value is the linear combination of each of these variables. After obtaining the composite value, we computed the median. The final index was formed based on the composite values considering the median value as 100. Additionally, we have mapped the fastest growing districts, in terms of GDP growth over 5 years to identify the emerging pockets of interest for investors. The Top 5 States in India Based on Final Composite Index As clearly suggested by the graph below, Maharashtra emerges as the best possible state for investment purpose. The investment friendliness of the rest of the four states are almost equi- level. However, a few other states with closer final composite index value are Karnataka, West Bengal and Uttar Pradesh.
  2. 2. 350 Top 5 States of India for Investment Purpose 324 Composite Index 300 250 207 186 190 191 200 150 100 50 0 Delhi Andhra Tamil Nadu Gujarat Maharashtra Pradesh Urbanization process Urban population (1st table and figure) In terms of the size of urban population in the state, Maharashtra is the top ranking states. However, as per expectation, the bigger states find their place in the top 5 ranks in terms of this indicator. State’s share to India’s total urban population (2nd table and figure) Contribution of these 5 top ranking states is exactly half of India’s total urban population. This clearly suggests that the metro cities, namely, Mumbai, Chennai, Kolkata and Hyderabad play a major role in shaping India’s urban population concentration. Urban growth (3rd table and figure) It is important to notice that Goa and Mizoram, two smaller states of the country, figure among the top 5 states in terms of urban growth. Along with a faster penetration of urbanisation, smaller urban base in these state is a major force behind this pattern. State Rank 2500 Top 5 States ‐ Urban Population Maharashtra 1 2288 2000 Uttar Pradesh 2 Tamil Nadu 3 1500 Index value West Bengal 4 1000 Andhra 572 666 5 500 462 Pradesh 318 348 0 Andhra West Tamil Uttar Maharashtra Other Pradesh Bengal Nadu Pradesh states States Rank Maharashtra 1
  3. 3. Uttar 2 Pradesh Share of Top 5 States in Total Urban Population Tamil Nadu 3 West Bengal 4 Andhra Pradesh 7% West Bengal Andhra 7% 5 Tamil Nadu Pradesh Other states 50% 10% Uttar Pradesh 12% Maharashtra 14% States Rank Top 5 States - Urban growth 400 374 Mizoram 1 350 300 Maharashtra 2 250 Growth Index 215 3 204 Goa 198 200 177 150 Tamil Nadu 4 100 115 Delhi 5 50 0 Maharashtra Tamil Nadu Mizoram Goa Delhi India States State income Gross State Domestic Product (GSDP) (1st table and figure) Being the financial and commercial hub of the country, Maharashtra is well ahead of other states. Apart from the 5 top ranking ones, Tamil Nadu and Karnataka can also be considered in the same league. State’s share in India’s Gross Domestic Product (2nd table and figure) The top 5 states account for 40% of the total GDP of the country. However, concentration of major economic activities in a few states is established further with the fact that the next 5 states contribute 37% to country’s GDP while the balance 18 states account for 23%. Average annual growth over last 5 years (3rd table and figure) The smaller states show faster growth in terms of state income mainly due to their small base of GSDP. Haryana is the only exception, which has been witnessing fast pace of expansion in economic activities, especially in cities adjacent to Delhi such as Gurgaon, Faridabad etc. States Rank Andhra Pradesh 3 Maharashtra 1 West Bengal 4 Uttar Pradesh 2 Gujarat 5
  4. 4. Top 5 States- Gross State Domestic Products 3000 2523 2500 2000 Index value 1500 1000 514 500 291 333 270 278 0 Gujarat West Bengal Andhra Pradesh Uttar Pradesh Maharashtra Other states State States Rank Maharashtra 1 Top 5 State‐ Share in Country's GDP Uttar Pradesh 2 Gujarat 6% West 7 Andhra Pradesh 3 West Bengal 4 Gujarat 5 tes Maharashtra 12% States Rank Top 5 States - Average Annual Growth for Last 5 Years 200 190 Manipur 1 180 160 160 Jharkhand 2 140 122 125 120 120 115 Index Value Haryana 3 100 80 Nagaland 4 60 40 Uttaranchal 5 20 0 Uttaranchal Nagaland Haryana Jharkhand Manipur All-India States Capital formation Gross Fixed Capital Formation (GFCF) (1st table and figure) The developed states in terms of industrial activities have figured in the top ranking states. It is important to mention that Andhra Pradesh, Chhattisgarh and Haryana are close competitors to Uttar Pradesh. West Bengal, one of the important relatively industrialised states in the country, ranks 11. State’s contribution to India’s total capital formation (2nd table and figure) The top 5 states contribute as high as 57% to India’s total capital formation. The share of top 10 states is 80% of the country’s GFCF.
  5. 5. Rank Top 5 State - Gross Fixed capital Formation States 1600 1459 Maharashtra 1 1400 1200 Tamil Nadu 2 1000 Gujarat 3 Index Value 800 628 Karnataka 4 600 452 393 5 400 Uttar Pradesh 235 278 200 0 Uttar Pradesh Karnataka Gujarat Tamil Nadu Maharashtra Other states State States Rank Top 5 States ‐ Share of India's Total Gross FIxed Capital Formation Maharashtra 1 Tamil Nadu 2 Karnataka 8% Uttar Pradesh 7% Other states Gujarat Gujarat 3 42% 12% Tamil Nadu Maharashtra 13% 18% Karnataka 4 Uttar Pradesh 5 Infrastructure availability related to power Connected load for industrial usage (1st table and figure) The most industrialized states of the country figure in the top 5 in terms of power consumption for industrial usage. Punjab, Rajasthan and Uttar Pradesh are close followers to these 5 states. Share in India’s total load for industrial usage ((2nd table and figure) 56% of the total connected load for industrial usage comes from these top 5 states. Number of consumers for industrial usage (3rd table and figure) In terms of number of consumers, West Bengal is an inclusion in the list. This might be due to the fact that small scale industries are quite prevalent in the state. Share in country’s total consumer for industrial usage (4th table and figure) Maharashtra itself accounts for 17% of the total consumers for industrial usage. However, an increase in share compared to previous indicator in case of Maharashtra as well as Gujarat in the total pie reflects a mix of both large as well as smaller industrial units in these states.
  6. 6. Top 5 States - Connected Load For Industrial Use 3000 States Rank 2500 2428 1 Maharashtra 2000 Index Value 1500 2 Tamil Nadu 1000 887 751 561 578 500 363 3 Gujarat 0 Karnataka Andhra Pradesh Gujarat Tamil Nadu Maharashtra other states State Andhra 4 Pradesh 5 Karnataka Top 5 State - Contribution to Country's Total Connected Load for Industrial Use States Rank 1 Maharashtra Andhra Pradesh Karnataka 10% 2 7% Tamil Nadu other states Gujarat 44% 10% Tamil Nadu Maharashtra 13% 16% 3 Gujarat Andhra 4 Pradesh 5 Karnataka States Rank Top 5 States - Consumers of Industrial Usage of Power 4000 Maharashtra 1 3670 3500 Gujarat 2 3000 Karnataka 3 2500 Index Value 2000 Andhra 4 Pradesh 1500 1383 954 1000 887 West Bengal 5 645 699 500 0 West Bengal Andhra Pradesh Karnataka Gujarat Maharashtra Other States States
  7. 7. Top 5 States - Consumers of Industrial Usage of Power States Rank 1 Maharashtra 2 Gujarat Andhra Pradesh West Bengal 8% 8% 3 Other States Karnataka Karnataka 44% 11% Gujarat Maharashtra 12% Andhra 17% 4 Pradesh 5 West Bengal Infrastructure availability related to transportation Projected expenditure on roads and bridges – 2005–10 (1st table and figure) Maharashtra again shows its prominence as India’s most favoured investment destination. However, the pattern also suggests a better and developed road network in the western and southern part of the country. Share of total projected expenditure on roads and bridges (2nd table and figure) These 5 states share almost 50% of the total projected expenditure on roads and bridges of the country. For obvious reason these listed stated have a fast mover advantage over others. Rail density (3rd table and figure) States located between important destinations show higher rail densities. However, it is important to mention here that almost all the hill states of the country do not have any significant railways network. Total railway route length (4th table and figure) In terms of total route length, as expected the bigger states in terms of area have figured as the top 5 raking ones. However, Madhya Pradesh, West Bengal and Tamil Nadu are close to the leading group. Share in India’s total railway route length (5th table and figure) These 5 states share 47% of the total railway route length of the country. However, as mentioned earlier, exclusion of all the hill states due to non-availability of railway coverage is an important reason for the large share in favour of these 5 top ranking states.
  8. 8. Top 5 States - Projected Expenditure on Roads and Bridges 2005-10 States Rank 2000 1833 1800 1 1600 Delhi 1400 1200 Index value 2 1000 West Bengal 800 600 498 3 400 331 385 Punjab 200 232 270 0 Gujarat Tamil Nadu Andhra Pradesh Uttar Pradesh Maharashtra Other states 4 States Haryana 5 Bihar Top 5 States - Share in Countries Total Projected Expenditure on Roads and Bridges States Rank 1 Delhi Tamil Nadu 8% Gujarat 2 6% Andhra Pradesh West Bengal Other states 52% Uttar Pradesh 9% 11% Maharashtra 14% 3 Punjab 4 Haryana 5 Bihar Rank Top 5 States - Railway Route Length States 2500 Uttar 1 2000 2069 Pradesh 1500 2 Index Value Rajasthan 1000 3 Maharashtra 535 500 331 346 366 326 4 Gujarat 0 Andhra Pradesh Gujarat Maharashtra Rajasthan Uttar Pradesh Other states State Andhra 5 pradesh Rank States Uttar 1 Pradesh 2 Rajasthan
  9. 9. Top 5 States - Railway Route Length 3 Maharashtra 2500 2069 4 2000 Gujarat Andhra 1500 5 Index Value pradesh 1000 535 500 331 346 366 326 0 Andhra Pradesh Gujarat Maharashtra Rajasthan Uttar Pradesh Other states State Rank Top 5 States -Share In Country's Total Railway Route Length States Uttar 1 Pradesh Andhra Pradesh Gujarat 8% 8% Maharashtra 2 Other states 9% Rajasthan 52% Rajasthan 9% Uttar Pradesh 14% 3 Maharashtra 4 Gujarat Andhra 5 pradesh Telecom facilities Teledensity (1st table and figure) The reason for showing major metro cities along with top 5 states is exclusion of these cities from their respective states and inclusion of one state into another in case of a few big states in the available data. However, it suggests that the states to which these cities belong, would have much higher Teledensity if these cities were included. Internet usage- Number of registered domain (2nd table and figure) Delhi is undoubtedly the leader as far as registered domains are concerned. However, West Bengal and Tamil Nadu are also high in domain registration since the index values are close to some of the top 5 states. The share of Delhi in domain registration is as high as 20%.
  10. 10. Rank Top 5 States and 4 Metro Cities - Teledensity States 70 65.4 61.08 60 56.73 1 50 Punjab 40 Teledensity 33.7 2 30 27.61 Kerala 25.54 20 18.78 16.98 17.06 Himachal 12.74 3 10 Pradesh 0 Gujarat Karnataka Himachal Kerala Punjab Kolkata Mumbai Chennai Delhi India Pradesh States 4 Karnataka 5 Gujarat Registered Top 5 States - Registered Internet Domains Internet 3500 States Domains 3258 3000 1 Delhi 2500 2 2000 Index Value Maharashtra 1500 1253 3 Karnataka 1000 495 413 Andhra 500 405 332 4 Pradesh 0 Kerala Andhra Pradesh Karnataka Maharashtra Delhi Other states State 5 Kerala
  11. 11. Top 5 States - Registered Internet Domains Andhra Pradesh 7% Kerala Karnataka 5% 7% Maharashtra Other states 8% 53% Delhi 20% Health infrastructure Public Health Centres (PHC) and Community Health Centres (CHC) Per Million Population(1st table and figure) In the hill districts the density of PHCs and CHCs are much higher than the states of the plains. Rugged terrain and inaccessibility has prompted the Government to establish the basic health facilities to these areas. Government hospitals per million population (2nd table and figure) Apart from the hill states, Delhi and Goa figure amongst the top 5 states in terms of density of Government hospitals. Delhi has the advantage of being the capital of the country while the proactive role of the state government surely been the case of Goa. Number of available beds in government hospitals per Million population (3rd table and figure) Gujarat and Orissa are the inclusions amongst top 5 states from the plain region. States Rank Uttaranchal 1 Arunachal 2 Pradesh Himachal 3 Pradesh Mizorm 4 Meghalaya 5
  12. 12. Top 5 States- Number of PHCs and CHCs Per lakh Population 2,000 1,800 1,739 1,600 1,400 1,200 Index Value 1,000 800 600 399 400 324 278 210 200 95 - Meghalaya Mizoram Himachal Pradesh Arunachal Pradesh Uttaranchal All India State
  13. 13. States Rank Sikkim 1 Arunachal 2 Goa 3 Delhi 4 Nagaland 5 Top 5 States - Government Hospitals PerMillion Population 450 397 400 350 300 264 255 Index Value 250 196 196 200 150 100 92 50 0 Nagaland Delhi Goa Arunachal Pradesh Sikkim India State
  14. 14. States Rank Nagaland 1 Arunachal 2 Pradesh Sikkim 3 Orissa 4 Gujarat 5 Top 5 States - Government Hospital Beds Per Million Population 800 699 700 610 619 600 500 483 Index Value 400 341 300 200 139 100 0 Gujarat Orissa Sikkim Arunachal Pradesh Nagaland India State
  15. 15. Educational Infrastructure Education Development Index (1st table and figure) Kerala emerges as the top ranking state in terms of education development index. Though none of the north-eastern states have figured in the top 5, all of them show high education development index. Literacy ( 2nd table and figure) The trend from literacy distribution is very similar to that of education development index. Apart from the top 5 states, all the north-eastern states show high literacy level. However, amongst the developed states, Maharashtra, Tamil Nadu and Punjab have higher literacy rates compared to the rest. States Rank Kerala 1 Delhi 2 Tamil nadu 3 Himachal 4 Pradesh karnataka 5
  16. 16. Top 5 States- Education Development Index 130 126 125 124 121 120 Index Value 116 115 111 110 105 100 Karnataka Himachal Pradesh Tamil Nadu Delhi Kerala State States Rank Kerala 1 Mizoram 2 Goa 3 Delhi 4 Himachal 5 Pradesh
  17. 17. Top 5 States - Literacy Rate 160 145 147 140 125 127 120 113 102 100 Index Value 80 60 40 20 0 Himachal Pradesh Delhi Goa Mizoram Kerala All India State
  18. 18. Market Potential market size (3rdnd table and 3rd figure) The bigger states have figured in the list of top 5 states. However, Tamil Nadu and Karnataka are not far behind. Share in total potential market size (4th table and 4th figure) These 5 states contribute to about 75% of the total potential market size of the country. Maharashtra itself has a share of 25%. The potential market size of the bottom 15 states is about only 8% of the total. Potential market size for consumer durables (1st table and 1st figure) Similar to the trend observed in case of total market size, the bigger states figure in top 5 list. The exception is Kerala, perhaps on account of remittance the state receives from overseas. The top 5 states account for about 50% of the potential consumer durables market of India. The bottom 10 states account only for about 10% of the consumer durables market. States Rank Maharashtra 1 West Bengal 2 Uttar 3 Pradesh Kerala 4 Gujarat 5
  19. 19. Top 5 States - Potential Market for Consumer Durables 2500 1978 2000 1500 Index Value 1000 685 500 356 363 310 313 0 Gujarat Kerala Uttar Pradesh West Bengal Maharashtra Other States State States Rank Maharashtra 1 West Bengal 2 Uttar 3 Pradesh Kerala 4 Gujarat 5
  20. 20. Top 5 States - Market Share for Consumer Durables Kerala Gujarat 8% 8% Uttar Pradesh Gujarat 9% Other States Kerala 49% Uttar Pradesh Maharashtra West Bengal 17% Maharashtra West Bengal Other States 9% States Rank Maharashtra 1 West Bengal 2 Uttar 3 Pradesh Andhra 4 Pradesh Gujarat 5
  21. 21. Top 5 States - Total Market Size 600 543 543 500 400 Index Value 294 300 284 263 270 200 100 - Gujarat Andhra Pradesh Uttar Pradesh West Bengal Maharashtra Other states States States Rank Maharashtra 1 West Bengal 2 Uttar 3 Pradesh Andhra 4 Pradesh Gujarat 5
  22. 22. Top 5 States - Share in India's Total Market Size Gujarat Other states 12% 25% Andhra Pradesh 12% Uttar Pradesh Maharashtra 13% 25% West Bengal 13%

×