State-O-Nomics: Exports to fuel the Madhya Pradesh growth engine

Textile Hub: From tourism to agriculture and from medicine to infra, Mhya Presh is becoming a secure investment destination for leing industries in country. Building brick by brick, state is running trial runs for its first metro rail network in Bhopal and Indore, right before state assembly elections. 

An agri-based economy 

economy of Mhya Presh is driven by a substantial contribution of agriculture. According to Annual Soya Outlook Report 2022 released by PJT State Agricultural University, Mhya Presh accounts for 60 per cent of India’s total soybean production with 55.84 lakh hectares of area dedicated only to Soyabean. 

Agriculture provides livelihoods of 58 per cent of Mhya Presh’s population | Image credit: Unsplash

Mhya Presh also accounts for 36 per cent of gram production, 25 per cent of oil seeds production, and 24 per cent of national pulse production in country. According to Central Bank of India’s state profile of Mhya Presh, 35 per cent share of state GVA comes from primary sector, especially agriculture and allied sector. 

However, distribution of land-holding patterns in report highlights concerning gap between marginal and medium farmers with more than 48.33 per cent of farmers falling in marginal category. 

According to World Economic Forum, agriculture provides livelihoods of 58 per cent of Mhya Presh’s population and reducing reliance on MSP by government is a commendable step towards economic inclusivity for farmers. 

“Mhya Presh has recognised importance of tapping into this resource, especially as this scheme allows convergence between various government policies and schemes. It is noteworthy that state has highest number of sanctioned proposals at 3609. Of amount disbursed in country, approximately 36 per cent of it came through Mhya Presh,” report stated. 

Industries in Mhya Presh

Mhya Presh is working towards pivoting its agri-centric economy towards an industry without compromising on tritional vantage that state has leveraged to create an existing supply chain for agriculture. 

According to government, Mhya Presh has abundant human resources to cater for needs of industries entering state. report claims more than 2,00,000 technical professionals pass out every year in state. Apart from that, state also has a strategic location and can be reached from anywhere in country within 24 hours by ro. Mhya Presh has Atal Pragati Path, Narma Expressway, and recently approved Delhi-Nagpur Expressway. 

Here’s a brief breakdown of Mhya Presh’s most prominent industries

Textile Industry

Mhya Presh is known for its spinning and weaving mills. state has a significant presence in textile sector. According to Invest MP report published in 2019, MP has more than 60 textile mills and produces more than 24 per cent of world’s total organic cotton production. 

Image credit: Unsplash

Mhya Presh's textile industry is diverse, producing a range of fabrics like cotton, silk, wool, and jute. state is renowned for its handloom and handicrafts, with clusters specialising in Chanderi and Maheshwari sarees. se textiles not only cater to local needs but also have a thriving market nationally and internationally.

Cement Industry

MP boasts a robust cement industry, being a significant producer in India. state's strategic location and abundant limestone reserves fuel this sector's growth. According to India Brand Equity Foundation, Mhya Presh is largest cement-producing state in India, with a production capacity of over 100 million tonnes per annum (MTPA). 

MP’s most important centres of cement manufacturing are Katni, Jamul, Satna, Durg, and Maihar. Key players like UltraTech Cement and ACC have a notable presence in state, contributing to nation's cement production and meeting infrastructural demands.

Automobile Industry

Mhya Presh is home to 30+ OEM manufacturers, 100+ engineering manufacturers, and 200 thousand+ technical automobile professionals, making it one of most prominent centres of automobile manufacturing in country. According to InvestMP report, MP has developed world-class infrastructure including industrial parks, ICDs, industrial corridors, and testing facilities. 

Image credit: Pexels

Spre across 2,000 hectares, Pithampur Auto Cluster has over 120 large units and 450 medium units with a combined investment of $11.3 billion. Volvo Eicher Commercial Vehicles and Tata Motors have prominent plants in same auto cluster. 

IT Industry

In recent years, Mhya Presh has been making strides in IT sector, with Indore and Bhopal emerging as IT hubs. In 2022-23, state's IT exports were estimated to be around Rs 10,000 crore. state is home to over 1,000 IT companies, including some of biggest names in industry, such as Infosys, TCS, and Wipro. Mhya Presh is home to a number of IT parks and special economic zones (SEZs), which provide state-of--art infrastructure and facilities to IT companies.

Mining

Mhya Presh is fourth-largest mineral-producing state in India, accounting for over 10 per cent of country's total mineral production. state has a rich mineral endowment, with over 40 different minerals found within its borders. most important minerals produced in Mhya Presh include coal, iron ore, limestone, dolomite, and marble.

Image credit: Pexels

mining sector contributes around 3 per cent to gross state domestic product (GSDP) of Mhya Presh and employs over 500,000 people in state. In 2021-22, state produced over 200 million tonnes of minerals, including:

• Coal 100 million tonnes
• Iron ore 30 million tonnes
• Limestone 50 million tonnes
• Dolomite 10 million tonnes
• Marble 5 million tonnes

Exports from Mhya Presh

Mhya Presh is targeting an 11 per cent increase in exports for fiscal year 2022-23 compared to previous year. surge is expected to be driven by agricultural products, electronic equipment, engineering, and automobiles. 

Image credit: Pexels

state aims to achieve export figures of Rs 65,000 crore in 2022-23, a notable rise from Rs 58,407 crore recorded in fiscal year 2021-22. past fiscal year alrey witnessed a record high in export value. se insights were shared during a session titled 'Fostering Exports from MP' on concluding day of Global Investors' Summit.

Challenges in front of Mhya Presh

Despite a focus state’s infrastructure and increasing per capita income of farmers, government needs to focus on some critical aspects of economy where it lags behind. 

Poverty is still a major challenge in front of Mhya Presh with more than 42 per cent of urban and 36.9 per cent of rural population falling in category of poor. 

state's agriculture sector is highly dependent on rainfall. Droughts and floods can have a devastating impact on agricultural production and incomes. government needs to have sound precautionary mechanisms and distribute economic reliance on or parts of economy. 

state's industrial sector is dominated by a few large industries, such as cement and steel. This makes economy vulnerable to shocks in se sectors.

Unemployment is anor major concern for Mhya Presh. According to data on joblessness presented in monsoon session of state assembly last year, re were over 25.8 lakh unemployed youths in state as of April 1, 2022. 

MP’s future economic growth is likely to be driven by a good mix of domestic consumption and healthy export volumes on back of sturdy infrastructure support.