Gujarat: Trade and Commerce | Gujarat State PSC (GPSC) Preparation: All subjects - GPSC (Gujarat) PDF Download

Gujarat's Growth Story

• Gujarat’s economic performance is noteworthy given its relatively small size and population. Despite covering only 6% of India's land area and 5% of its population, the state contributes 7.6% to the country’s GDP and 22% to its exports. From 2001 to 2013, Gujarat achieved an average annual Gross State Domestic Product (GSDP) growth rate of nearly 10%, surpassing the national average. 
• Between 1980 and 2013, Gujarat's growth rate averaged 5.1%, making it one of the fastest-growing regions globally if it were a separate country with a population exceeding 10 million.

Factors Contributing to Growth

Several factors have contributed to Gujarat's remarkable economic growth:

• Geography: Gujarat’s extensive 1,600 km coastline has historically made it a key trading hub, facilitating global access and reducing transportation costs. Coastal states in India, like Maharashtra and Tamil Nadu, have generally experienced higher growth rates.
• Historical Commerce: Gujarat has been a significant trading center in the Arabian Sea for centuries, benefiting from its strategic location.
• Economic Performance: Despite challenges like poor rainfall, Gujarat has advanced in agriculture through market-driven transformations. The state's focus on cash crops, a dairy revolution, and robust fish exports has spurred agricultural productivity.
• Resilience: Gujarat has effectively turned setbacks, such as the Surat plague and Kachchh earthquake, into opportunities for growth. The state has experienced significant economic surges in the past decade and a half.

Challenges and Inclusive Growth

• While Gujarat excels in economic growth, its progress in social sector development remains less impressive. The state ranks between 9th and 12th among India’s major states in terms of social sector indicators like education and health. 
• The primary challenge for Gujarat's leaders is to achieve inclusive growth that matches its economic success, ensuring improvements in social and developmental areas alongside its economic achievements.

Tele Communications and IT

• Telecommunications and IT have significantly improved work efficiency and public accessibility through e-governance in Gujarat. The state government emphasizes the development of new and emerging technologies and is increasingly utilizing Information and Communication Technologies (ICT) to offer services based on citizen convenience. 
• This initiative aims to enhance service reach, increase transparency, reduce response times, and cut costs. Gujarat is notable for being the first state in India to implement functional e-Governance across all its Municipalities and Municipal Corporations.
• The state government has adopted innovative and result-oriented policies to advance e-governance. Through the Science and Technology Department, Gujarat positions itself as a leader in the Knowledge Economy, improving the effectiveness, transparency, and efficiency of government-citizen interactions.
• Gujarat, with its IT Policy 2006-2011, has been recognized as one of the top five states for e-readiness by independent agencies. The state excels in areas such as Network Policy, E-Governance, Network Learning, Network Access, and Network Society.

Industry

• Over the past 42 years, Gujarat's industry has undergone a significant transformation in both its visual and infrastructural aspects since the state's formation in 1960. Following its revival, Gujarat's industrial sector has experienced continuous growth, thanks largely to the State Government’s efforts in supporting and promoting both domestic and foreign companies seeking to integrate into Gujarat’s industrial landscape.
• Gujarat’s industrial sector has thrived in various fields, notably creating substantial employment opportunities. Key areas such as the cotton industry and non-metallic mineral products have been instrumental in generating jobs. Moreover, a new wave of industries, including petrochemicals, chemicals, engineering, fertilizers, and electronic goods, is poised to further impact the Gujarat market.
• Gujarat is recognized as one of India’s leading industrialized states. For the fiscal year 2015-16, the Gross State Domestic Product (GSDP) of Gujarat was approximately USD 158.2 billion. The state saw an average annual GSDP growth rate of around 12.02% from 2004-05 to 2015-16. By June 2016, Gujarat had an installed power generation capacity of 30,188.75 megawatts (MW).

Crude Oil and Petroleum

• Gujarat is renowned as India's petroleum hub due to its extensive refining capacities established by both private and public sector enterprises. 
• By December 2015, Gujarat was the second-largest producer of onshore crude oil in India, generating 3.32 million tonnes, which represented 24.7% of the country's total onshore crude oil production.

Diamond Industry

• Gujarat leads the world in processed diamond production, contributing 72% of global output and 80% of India’s diamond exports. The state is also a major player in denim manufacturing, producing 65-70% of India’s denim and ranking as the third-largest producer globally.

Infrastructure

• Gujarat boasts superior infrastructure compared to many other states, offering substantial opportunities in trade and commerce. The state features 45 ports, 18 domestic airports, and one international airport. It is home to 106 product clusters and 60 special economic zones (SEZs). 
• The anticipated investments, including those from the US$ 90 billion Delhi-Mumbai Industrial Corridor (DMIC), are expected to further enhance Gujarat’s infrastructure.

Key Sector Highlights

• As of 2015-16, Gujarat operated 213 agriculture produce market committees (APMCs) with 213 main yards and 187 sub-market yards.
• The state government plans to establish brown and greenfield projects to implement environmentally friendly processing standards in the textile industry.
• The 2016-17 state budget proposed a US$1.20 billion allocation for the Energy and Petrochemical Department.
• Gujarat aims to increase its engineering output from auto and auto components to 10% by 2020, up from the current 3.7%.
• Surat is responsible for polishing eight out of every ten diamonds worldwide.
• The Central Government intends to set up a medical device park in Gujarat, with construction expected to commence before the Vibrant Gujarat Global Summit 2017, supported by a high-level committee.