2.1 Major Economic Sector in Gujarat- Current Status Gujarats economic growth has been faster in recent years while sustaining a double digit growth for a considerable period of time. Gross State Domestic Product (GSDP) of Gujarat at constant (2004-05) prices in 2009-10 has been estimated at Rs. 3.32 Lakh crore as against Rs. 3.0 Lakh crore in 2008-09, registering a growth of 10.2 percent in a year. As per quick estimates, GSDP at current prices in 2009-10 has been estimated at Rs. 4.23 Lakh crore as against Rs. 3.6 Lakh crore in 2008-09, registering a growth of 16.8 percent compared to last year (Socio-Economic Review 2009-10). Industrial sector has been a major contributor to state economy in recent decades. The higher growth in the economy during the year 2009-10 can be mainly attributed to manufacturing, electricity, construction and communication sectors, which have contributed to the tune of 11.0 to 34.6 percent growth during the year 2009-10 at constant (2004-05) prices (Socio-Economic Review 2009-10).The share of primary, secondary and tertiary sectors in GSDP at constant prices was recorded at 14.2 per cent, 38.6 per cent and 47.2 per cent respectively in the year 2009-10 at 2004-05 base year. It is the tertiary sector that has been contributing to Gujarat economy the most followed by secondary and primary sector, which is comparable to Indian economy on overall contributions from these major sectors. One may infer that Gujarats strong and sustained economic base has been supported by secondary sector especially by Manufacturing Sector as well as Tertiary Sector. Recent data shows that Manufacturing Sector contributes 27 percent to the overall GSDP. The share of manufacturing sector in the state has remained almost constant following economic crises of 2008-09 in recent years, due to its open industrial policy which also depends on the external economic environment globally, (Kumar and Subramanian, 2012).
2.2 Brief History of Industrialistion in Gujarat
Gujarat has diversified its industrial base substantially over a period of 60 years ever since it has acquired Statehood from the erstwhile Bombay State. Textiles and Auxiliary sectors were the major contributor to industrial economy of the state during 1960s. The industrial spectrum has completely transformed in the span of over 50 years. At present 12 major industry groups together account for 86 percent of factories, 96 percent of fixed capital investment, 94 percent of value of output and 95 percent of value addition in the states industrial economy. Recently, refined petroleum products has emerged as one of the
largest industrial groups having 33 percent share, followed by chemicals having
21 percent share of entire industrial sectors (Industries Commissionerate, 2012). Gujarat has also succeeded in spreading its industrial base spatially covering almost every part of the state. During 1960s, the industrial development was confined only to four major cities namely Ahmedabad, Baroda, Surat and Rajkot and some isolated locations such as Mithapur and Valsad. At present almost all the districts of the state have witnessed industrial development in varying degrees. Such a massive scale of industrial development has been possible on account of judicious exploitation of natural resources, such as minerals, oil and gas, marine resources, agriculture and animal wealth. The discovery of oil and gas in Gujarat in the decade of 60s has played an important role in setting up of petroleum refineries, fertilizer plants and petrochemical complexes in the state at suitable locations. The state government has also established a strong institutional network i.e. Gujarat Industrial Development Corporations (GIDC), in 1960s which oversees industrial estates in the state (Sukhadia, 1997). GIDCs major responsibility is to providing developed plots and built-up sheds to industries. Institutions were also set up to provide term finance, assistance for purchase of raw materials, plant and equipment and marketing of products. Later, District Industries Centres (DICs) were set up in all the districts to provide assistance in the form of support services in setting up industrial units. These early initiatives have determined the present regional distribution of industrial sectors in the state. It has also influenced the basic structure of industries in terms of size and potential to create employment at regional level.
2.3 Structure of Industrial Sectors in Gujarat
This section presents structure and pattern of industrialization in the state in terms of size and type of the various industrial sectors. The purpose is to also see the growth trends of various industrial sectors in terms of number of units, total investment, and employment during the last five years in order to understand the impact of the open industrial policies adopted in Gujarat.
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