General Information

The Union Territory of Pondicherry is located on the Coromandel Coast, nearly 160 Kms from the city of Chennai. The French ruled the territory for about 300 years. This former French colony exudes a Mediterranean aura with its elegant homes, calm atmosphere and serene locales. The city has imbibed the Tamilian culture.

The Union Territory of Pondicherry comprises of four coastal regions viz- Pondicherry, Karaikal, Mahe and Yanam. Pondicherry and Karaikal are situated on the East Coasts in Tamil Nadu, Yanam in Andra Pradesh and Mahe on the West Coast in Kerala.

Fact File

Source: CSO

Advantage Pondicherry

• IT Hardware capital of India.
• Education Hub of South India.
• Proactive Government administration and incentives.
  
• Reliable connectivity with state of the art communication networks
  
• Presence of unique spiritual centres such as the Aurobindo and Auroville ashram that draw international attention.
  
• Stable socio-political environment.

Economic Infrastructure

Aviation

A medium size airport is available in Pondicherry.The International airport is at Chennai which is at 2 hours drive from Pondicherry.

Rail

Pondicherry is connected through a meter gauge (being converted to broad gauge) railway line with Villupuram. There is only one railway station between Pondicherry and Villupuram i.e. Villianur.

Road

Total road length of the state is 2552 kms. The road length per 1000 sq.km is 4575. Pondicherry is well connected to most of the major towns of southern India by road. Pondicherry and Chennai are well linked through picturesque East Coast Road (ECR). Total number of Motor vehicles in Pondicherry is 251183 and the vehicle density per Sq.Km is 507.

Ports

Pondicherry is accessible to major ports like Chennai, Tuticorin, Cochin and Vishaghapattinam.Also, Pondicherry port is being modernised.

Power

As part of the southern-grid, adequate power has been allocated to Union Territory of Pondicherry. Steady supply of power is presently available at rates cheaper than neighbouring states.

The installed capacity of power utilities in Pondicherry as on 31st January 2007 stood at

Source: powermin.nic.in

The power requirement of the Union Territory of Pondicherry is 175 MW and the power availability is 229 MW.For the power generation 32.50 Gas based power project has been commissioned. The per capita electricity consumption of Pondicherry is 1161 KWH as compared to all India which is 320.1 KWH.

Telecommunications

Pondicherry is a part of the Global Information Highway. Good telecom infrastructure including cellular, pager, ISDN, and Internet services are available.
It has recorded 92730 numbers of telephone lines and holds 31 telephone exchanges. The tele density in Pondicherry is 48.7 lines per 1000 persons.

Social Infrastructure

Health

Total number of hospitals (including Private) in Pondicherry is 20. In the Union Territory total number of Primary Health Centres (PHCs) is 43 and E.S.I Dispensaries is 12.There are 475 Doctors in Pondicherry and number of Doctors per 100000 persons is 59 as compared to India, which is 45.

Education

Total number of schools in Pondicherry is 863 and has one University. Number of Post Graduate and Graduate colleges is 8 and number of Professional colleges is 18.The number of students passing out every year in Pondicherry is 2095.

Here is a list of some of the renowned educational institutions in Pondicherry

• Pondicherry Central University
  
• Pondicherry Engineering College
  
• Jawaharlal Nehru Institute of Post Graduate Medical Education & Research (JIPMER)
  
• Mahatma Gandhi Dental College
  
• Rajiv Gandhi College of Veterinary and Animal Sciences
  
• Dr. Ambedkar Govt. Law College
  
• Pandit Jawaharlal Nehru College Of Agriculture And Research Institute
  
• Pondicherry Institute of Hospitality Crafts
  
• Govt. Polytechnic in all regions
  
• Alliance Francaise

Major Industries

Light Engineering Including Auto Components Industry

Light Engineering Including auto Components Industry is one of the thrust areas in Pondicherry.As the transport sector is growing rapidly in the country, there is considerable potential for this industry to develop. Major players such as Lucas TVS already have a large operation in Pondicherry. As this is a relatively power intensive industry, Pondicherry's low power tariffs could act as an incentive to attract more industries here. Moreover, this industry is compatible with Pondicherry's fragile ecological base.

A fair growth in the automotive industry has been recorded during the year 2006. The production and sales segments in the automotive sector achieved a growth rate of 15-20%. The prospects of the industry are rather impressive. The industry will be foreseeing a modest growth in the production and sales segments

Food Processing Industry

The food processing industry has gain a momentum growth in its performance during the year 2006.The production and sales of the industry increased by 10-15 per cent during the year 2006.The capacity utilization and value of production and the trends inventory levels has increased drastically at a rate of 20-30 percentage points during the same period.

Major industry players have projected a stable performance of this industry. The production and sales level of food processing industry is expected to grow. According to a study the capacity utilization will be at its maximum during the year 2006.

Chemical Industry

Being a major contributor to the economy of Pondicherry the chemical industry has witnessed a persistent growth in the recent years. The industry has seen significant developments with its production level and sales level increasing by 10-12 percent and 15-18 per cent respectively.

An optimistic outlook for the future of this industry is foreseen. The sector is mainly based on capital; therefore there is no further scope for absorbing additional labour force thus, the industry is self-assured for achieving a marginal growth.

Basic Metal and Metal Industries

The basic metal and metal industries have been two of the fastest growing industries in the Union Territory over the last couple of decades. Basic metal and metal industries are complementary industries to each other and are also an important source of components for industries such as the automobile industry. Efforts need to be made, therefore, to facilitate linkages between these industries and consumer goods industries such as the automobile industry.

Leather Products and Footwear Industry

The leather industry is one of the fastest growing industries in the Union Territory. The leather industry is promoted due to its various advantages over other industries: it is to a great extent a small-scale industry with considerable employment potential although it has become much more capital intensive over time. Another major advantage of the leather industry is that it is a major export earner. Though Pondicherry does not need to promote export activity as such, export markets provide another base for the growth of indigenous industry.

Being an export-oriented industry, the leather industry is determined to meet international standards. Another dimension to this is marketing. In order to capture an increasing share of the market, the leather industry with the help of the government is determined to spend considerable effort in promoting leather products.

Textile Industry

Anglo French Textiles was taken over by the Government of Pondicherry under the Anglo French Textiles Limited (Acquisition and Transfer of Textile Undertaking) Act, 1986 on 24.12.1985 and the Management of the Anglo French Textiles was vested with the Pondicherry Textile Corporation Ltd., Government of Pondicherry Undertaking. The Corporation has improved its production performance as a result of sustained efforts by the Management.

The well-managed compact small-scale spinning and power loom units with modern technology are making good business. The labour intensive garment making industry is poised to dominate the international market place.

The industry has recognized the need to remain up-to-date with latest fashion, safety requirements and consumer-sensibilities in order to prosper the industry. Also, Proper locations have been designated for sustainable industrialisation and Industries dependent on locally available raw materials are encouraged.

Information Technology Industry

The Knowledge based sunrise industry growing stronger with time. A large pool of IT professionals, state-of-the-art communications facilities available at Pondicherry.The IT sector has performed well during the year 2006.With an increase in the growth rates of its indicators by 20-30 percent in its revenue, 30 per cent in Overseas billing and 20 per cent in Manpower utilization the industry has shown exceptional improvement. Also, the industry has increased its employment levels to a margin of 10%.

The sector is expected to perform significantly and inclined to touch new heights in the coming years. Parameters like revenue, overseas billing, manpower utilization and demand outlook are expected to contribute largely for the sustainable growth of this sector in Pondicherry. The industry also projected to increase its employment levels to a reasonable percent.

Tourism Industry

Tourism is an increasingly important component of the service sector in Pondicherry. Pondicherry's location on the Coromandel Coast coupled with its French past and spiritual attractions of the Aurobindo Ashram and Auroville provide the Union Territory with multiple tourist attractions. During the year 2006, around 3,35,677 tourists visited Pondicherry of which nearly 22,927 were foreigners. Growth rates in tourism related sectors such as hotels and restaurants and retail and wholesale trade have also increased in the recent years.

Pondicherry has the potential to become a major tourist centre in South India. Concrete efforts are been made by the Government to attract more visitors to Pondicherry and in order to do so Government has enhanced investment subsidy: 25% of the total investment subject to maximum of Rs.100 lakhs per project.

Pondicherry is one of the most popular tourist destinations in India which offers a slew of incentives for investors in tourism infrastructure. Investment opportunities exist to develop star & heritage hotels, amusement parks, multiplexes, food courts, beach resorts, eco-tourism, health spas, art & craft village and other tourism related products.

Incentives include investment subsidies and exemption from luxury tax. Special incentives are also offered for renovation and restoration of heritage buildings. All investments will enjoy unstinting support from the Government.

Projects Under Progress

1. Family Entertainment Complex in Pondicherry - Approx. project cost - Rs.35 crores.
2. Five Start Resort in Pondicherry - Approx. project cost - Rs.10 crores.
3. Eco Beach Park at Karaikal - Approx project cost - Rs.5.50 crores
4. Thirunallar Temple Town Development - Approx project cost - Rs.220 crores

Up coming projects in Pondicherry

• Special Tourism Development Zone at Manapet, Pondicherry
  
• Development of Chunnambar Water Front in Pondicherry
  
• Development of Laser Show Complex.
  
• Development of Heritage Tourism Products.
  
• Development and beautification of Botanical Garden.
  
• Development of International Convention Centre
  
• Development of Star Category Resorts/Hotels.
  
• Development of Theme Parks & Amusement Parks.
  
• Development of Film City
  
• Development of Oceanarium.
  
• Development of lagoons.
  
• Development of Yacht Marina
  
• Development of Handicraft Bazar near Gandhi Thidal in Pondicherry.

Thrust Areas

Information Technology

• Knowledge based sunrise industry
• Large pool of IT professionals, state of the art communication facilities

Textiles

• Production of high quality fabric
  
• Presence of specialized manpower
  
• High demand in the Overseas market

Leather

• Production of world class leather products
  
• Presence of skilled manpower
  
• Largest item of exports.

Auto Components

• Emergence of a number of auto giants such as Ford and Hyundai at Chennai
  
• Good scope for the establishment of ancillary units.

Marine Products

• Modern fishing harbour at Thengaithittu, Pondicherry and also at Karukalacheri, Karaikal in the pipeline.
  
• Large untapped potential for processing units.
  
• Good scope in shrimp culture and crab farming

Agro Processing

• Sought after destination for Agro Food processing
  
• Scope for floriculture ventures like cut flowers and for cultivating medicinal and aromatic plants.
  
• Good potential for Guava pulp and processing units.

Investment Opportunities

• Information Technology and software Development
  
• Electronics
  
• Agro processing including marine products
  
• Textiles including garments
  
• Leather Products, Foot wears
  
• Light Engineering including Auto Components
  
• Tourism
  
  • Heritage and Star Hotels
    
  • Food courts and restaurants
    
  • Amusement parks
    
  • Arts & Crafts village
    
  • Boutiques
    
  • Eco-tourism
    
  • Beach resorts
    
  • Health centres and spas
    
  • Convention centres
    
  • Entertainment multiplex

Investment Incentives

Investment Incentives as under the Industrial Policy (1997)

I) Scheme for the Motivation of Scheduled Castes, Tribes and Women entrepreneurs to start industries

• Rent Subsidy
  
  Rent subsidy is eligible for a period of five years from the date of commencement of commercial production subject to a ceiling of US$108.376 per month.
  (a) for the first two years - 50% of the rent
  (b) for the third year - 40% of the rent
  (c) for the fourth & fifth - 25% of the rent.
  
  
• Interest Subsidy
  
  With reference to loans received towards the creation of fixed assets and working capital, an interest rate equal to the difference between the actual rate charged by the financial institution/bank and a concessional rate of interest of 5.5 per cent per annum for five years shall be admissible from the date of Commencement of commercial production. However, the maximum amount of subsidy to each industry shall not exceed US$ 433.543 in any financial year.
  
  
• Special Investment Subsidy
  
  A special investment subsidy at the rate of 25 per cent on the capital investment for land, building and plant & machinery is admissible subject to a maximum of US$ 54,201.03 is offered.

II) Incentives for the Promotion of IT industry

• Capital Investment Subsidy
  • Applicable to New IT industries for the investments made on Plant and Machinery at 20 per cent to a maximum of US$43,360.73
• Connectivity Incentive
  • The industrial unit that have availed loan towards the creation of fixed assets and working capital, can avail an interest incentive to an extent of 25% of the annual interest amount paid, for five years from the date of commencement of business.
  • The maximum amount of subsidy to each industry shall not exceed US$1625.56 in any financial year
• Employment Incentive
  • The Unit needs to fulfil the criterion its permanent registration by providing at least 60 per cent employment to the local youth of Pondicherry.
  • Wage / Employment subsidy of 20 per cent Wage/Salary in case of such workers who are covered under Provident Fund (PF) will be granted.

III) Incentives for the Promotion of Thrust Areas

The government has proposed to provide capital Investment Subsidy for the following Thrust areas, with a view to attract more investments.

• Under the scheme a separate package of incentives are granted to the units provided they fulfil the criterion laid down during the permanent registration of Industrial units providing at least 60% of the employment to the local youth of Pondicherry.
• The Director of Industries and Commerce, Pondicherry has now submitted a proposal for the grant of investment subsidy for the other thrust area industries and requested for approval for implementation of the scheme prepared for the said purpose

Investment Incentives in the Tourism Sector

• An interest subsidy equal to difference of 5% in the rate of interest charged by Financial Institutions for loans for a period of 5 years, subject to a maximum of US$ 10852.54 per year.
• An investment subsidy of 20% of the total investment subject to a maximum of US$ 43,360.73 per project.
• Registration charges on Land and Building purchase will be refunded in full, two years after commencement of commercial activity.
• Town Planning Charges levied by the Town Planning Authorities for approving the building plans etc.
• Exemption from Luxury Tax on hotels is guaranteed for 7 years from the
  date of commercial opening, in case the Government brings in luxury tax
  for the 3 to 5 star category.
• Tourism Infrastructure Projects like amusement parts, entertainment multiplexes, food courts, beach resorts, eco-tourism resorts, health spas/wellness centres, convention centres, art & craft villages, yacht marinas etc. will be considered for these and other special incentives on a case by case basis.

Investment Incentives for Heritage Hotels and Buildings

Incentives are given towards the development and maintenance of heritage hotels, restaurants, boutiques and other similar activities, provided the architectural and conservation guidelines are complied with.

• Roof repair and façade improvements upto 70% of the cost of work upto a maximum of US$ 3,251.85 per building.
• Removal and alterations of existing unsympathetic changes as pointed by the competent authorities, upto 70% of the cost of work upto a maximum of US$ 2170.02 (per building).
• Construction subsidy for additional lettable rooms built within the
  conservation norms as laid down by the competent authorities, at
  20% of the building costs subject to a maximum of US$ 10852.54 per building.

Policy Framework

IT policy

Information Technology (IT), the most important development of the century, holds the key to rapid progress in the coming years, contributing to better governance and improved productivity which will increase the growth of the economy and quality of life of the citizens. India has already been ushered into an era of Information Technology (IT) and is making rapid strides towards becoming an IT Super Power. Acknowledging the fact that the importance of Information Technology is going to increase dramatically in the future, the Government of Pondicherry in line with the Government of India's policy has decided to prepare a perspective plan suitable to the region.

Objectives of IT Policy

• To provide the common man an easy access to information in all spheres of life.
• To make the Government machinery Citizen Friendly by facilitating transparency, efficiency and quick decision making in the administration.
• To impart IT training in order to increase IT literacy and creation of trained manpower.
• To create a healthy investment environment and encourage and accelerate the growth of IT related Industries, with attractive policies.
• To establish a good Information Communication Infrastructure in the Union Territory of Pondicherry.
• To create an organizational structure to achieve the above objectives by 2005.

(Full text of the policy)

Major Corporate Groups at Pondicherry

• IBM
  
• Acer
  
• WIPRO
  
• HCL
  
• HP
  
• Accel
  
• ICIM
  
• LG
  
• Samtel
  
• Proview
  
• Thapars
  
• Henkel
  
• Hindustan Lever
  
• Kotharis
  
• Shriram
  
• L&T
  
• Chemcrown
  
• Foseco
  
• Chemfab
  
• Whirlpool
  
• Ace Glass
  
• MRF
  
• Berger Paints
  
• Sundram Fastners
  
• Rane (Madras)
  
• Lucas TVS
  
• Brite
  
• Supreme
  
• Johnson
  
• Neycer
  
• Regency.

Leading Industrial Centres

The Govt. of Pondicherry had initially started three industrial estates in the Territory in order to motivate the industrial development. Four industrial estates were developed and allotted to the needy entrepreneurs. All the industrial estates are provided with all necessary basic infrastructure facilities

Useful Web link

Pondicherry State Departments
Department of Economics and Statistics
Department of Industries
Department of Tourism