Economy of Coimbatore

With more than 25,000 small, medium and large industries, the city's primary industries are engineering and textiles. Coimbatore is called the "Manchester of South India" due to its extensive textile industry, fed by the surrounding cotton fields.[71][72] The district also houses the country's largest amount of hosiery and poultry industries[citation needed]. The city has two special economic zones (SEZ), the Coimbatore Hi-Tech Infrastructure (CHIL) SEZ and the Coimbatore TIDEL park, and at least five more SEZs are in the pipeline. [73] [74][75] As of 2005, when Tirupur was a part of Coimbatore district, Coimbatore was the highest revenue earning district in Tamil Nadu.[76] In 2010, Coimbatore ranked 15th in the list of most competitive (by business environment) Indian cities.[77] An insignificant little town prone to droughts and earthquakes till the early years of the 20th century, Coimbatore experienced a textile boom in the 1920s and 1930s.[27] Though, Robert Stanes had established Coimbatore's first textile mills as early as the late 19th century, it was during this period that Coimbatore emerged as a prominent industrial centre. Narayanaswamy Naidu's Dhandayuthapani Foundry, D. Balasundaram Naidu's Textool, the Lakshmi Machine Works, the Kalleeswara Mills and the Somasundra Mills are some of the important textile and machine units which emerged during the early 1900s.[78] Coimbatore has trade associations like CODISSIA, COINDIA, SITRA and COJEWEL representing industries in the city. Coimbatore also has a 160,000 square feet (15,000 m2) trade fair ground, built in 1999. It was named COINTEC due to its hosting of INTEC (Small Industries Exhibition)[4]. The Trade Fair complex, one of the country's largest, was built in six months, and is owned by CODISSIA (Coimbatore District Small Industries Association)[5]. It is also the country's largest pillar-free hall, according to the Limca Book of Records.[79] Coimbatore houses a large number of small and medium texitle mills. It also has central textile research institutes like the Central Institute for Cotton Research (CICR)- Southern Regional station and the Sardar Vallabhai Patel International School of Textiles and Management. The South Indian Textiles Research Association (SITRA) is also based in Coimbatore. The city also houses two of the Centers Of Excellences (COE) for technical textiles proposed by Government of India, namely Meditech, a medical textile research centre based at SITRA, and InduTech based in PSG College of Engineering and Technology.[80] The neighbouring town of Tirupur is home to some of Asias largest garment manufacturing companies, exporting hosiery clothes worth more than 50,000 million. The city is the second largest software producer in Tamil nadu, next only to Chennai. IT and BPO industry in the city has grown greatly with the launch of TIDEL park and other planned IT parks in and around the city. It is ranked at[81] 17th among the global outsourcing cities. Companies like Tata Consultancy Services, Cognizant Technology Solutions, IBM, Robert Bosch GmbH, Tata Elxsi, Dell, Aditi Technologies, CSS Corp and KGISL having a presence in the city. Coimbatore is already the second largest hub in

India for Congizant Technology Solutions as it employs around 5000 people in its Coimbatore centre and is planning to double its capacity here.[82] Software exports stood at 710.66 Crores (7.1 billion) for the financial year 2009-10 up 90% from the previous year.[83] Coimbatore has a large and a diversified manufacturing sector facilitated by the presence of research institutes like Tamil Nadu Agricultural University, SITRA and large number of engineering colleges producing about 50,000 engineers.[84] Some of the prominent industries in Coimbatore include L&T, BOSCH, PSG, Sakthi group, Lakshmi Machine Works (LMW), Premier Instruments & Control Limited (PRICOL), Premier Evolvics, Janatics, LGB, Revathi Equipment Ltd, ELGI Equipments, Craftsman Automation Pvt Ltd, Shanthi Gears, Roots Industries. Wind Energy major Suzlon has set up a foundry & machine shop in Coimbatore. Along with it Hansen Transmission, a Belgian Company which manufactures gearboxes for windmills is setting up a plant here with an investment of 940 cr.[85] Manufacturing of automotive components is also important to Coimbatore's economy. Maruti Udyog and Tata Motors source up to 30% of their automotive components from Coimbatore. Some of the auto component makers in Coimbatore include Robert Bosch GmbH, PRICOL and Roots Industries. Coimbatore has more than 700 wet grinder manufacturers with a monthly output As of March 2005 of 75,000 units[86] and is home to a common facility for the manufacturers of wet grinders.[87] Coimbadore's motor and pump manufacturing industry supplies over 40% of Indias requirements.[12] Coimbatore is one of the major gold jewellery manufacturing hubs in India, renowned for making cast jewellery and machine made jewellery.[88][89] The city is home to about 3000 jewellery manufacturing companies and to over 40,000 goldsmiths.[90][91] The jewellery manufacturers have an active association called Coimbatore Jewellery Manufacturers' Association, and have also jointly established Coimbatore Gem and Jewellery Industries Private Limited (Cojewel), which is a common facility with niche goldsmith machinery to be used by the members of the association. Several jewellery retail chains like Kirtilal's are based in Coimbatore or have their manufacturing base in Coimbatore.[92] Owing to the presence of a large number of jewellery manufacturers and the strong engineering base, the city is home to a number of companies manufacturing jewellery making machinery.[93] The city is also a major diamond cutting centre in South India. For example Kirtilal's Jewellers alone have 5 diamond cutting and polishing centres in Coimbatore.[94][95] Coimbatore has some of the oldest flour mills in India. The large scale flour mills, which cater to all the southern states, have a combined grinding capacity of more than 50,000 MT per month.The city houses many famous high capacity flour mills like India Roller Flour Mills (which is closed now) and Coimbatore Roller Flour Mills.[96] These flour mills have been around for decades and were in the outskirts of the city at one time. Now they are in the middle of the city owing to increasing urbanization. In the recent years, the city has seen growth in the hospitality industry. Five star hotels like Taj Surya, Hilton Garden Inn and Le Meridien, four star hotels like Aloft and several

three star hotels like Park Plaza, The Residency, CAG Pride and Mangala International have presence in the city.[97][98][99][100] Coimbatore is the largest non-metro city for e-commerce in South India[101]

INDIA'S ECONOMIC GROWTH SINCE 1980

India Economy Growth : The rate of growth improved in the 1980s. From FY 1980 to FY 1989, the economy grew at an annual rate of 5.5 percent, or 3.3 percent on a per capita basis. Industry grew at an annual rate of 6.6 percent and agriculture at a rate of 3.6 percent. A high rate of investment was a major factor in improved economic growth. Investment went from about 19 percent of GDP in the early 1970s to nearly 25 percent in the early 1980s. India, however, required a higher rate of investment to attain comparable economic growth than did most other low-income developing countries, indicating a lower rate of return on investments. Part of the adverse Indian experience was explained by investment in large, longgestating, capital-intensive projects, such as electric power, irrigation, and infrastructure. However, delayed completions, cost overruns, and under-use of capacity were contributing factors Private savings financed most of India's investment, but by the mid-1980s further growth in private savings was difficult because they were already at quite a high level. As a result, during the late 1980s India relied increasingly on borrowing from foreign sources (see Aid, this ch.). This trend led to a balance of payments crisis in 1990; in order to receive new loans, the government had no choice but to agree to further measures of economic liberalization. This commitment to economic reform was reaffirmed by the government that came to power in June 1991. India's primary sector, including agriculture, forestry, fishing, mining, and quarrying, accounted for 32.8 percent of GDP in FY 1991 (see table 17, Appendix). The size of the agricultural sector and its vulnerability to the vagaries of the monsoon cause relatively large fluctuations in the sector's contribution to GDP from one year to another (see Crop Output, ch. 7).

In FY 1991, the contribution to GDP of industry, including manufacturing, construction, and utilities, was 27.4 percent; services, including trade, transportation, communications, real estate and finance, and public- and private-sector services, contributed 39.8 percent. The steady increase in the proportion of services in the national economy reflects increased market-determined processes, such as the spread of rural banking, and government activities, such as defense spending (see Agricultural Credit, ch. 7; Defense Spending, ch. 10). Despite a sometimes disappointing rate of growth, the Indian economy was transformed between 1947 and the early 1990s. The number of kilowatt-hours of electricity generated, for example, increased more than fiftyfold. Steel production rose from 1.5 million tons a year to 14.7 million tons a year. The country produced space satellites and nuclear-power plants, and its scientists and engineers produced an atomic explosive device (see Major Research Organizations, this ch.; Space and Nuclear Programs, ch. 10). Life expectancy increased from twenty-seven years to fifty-nine years. Although the population increased by 485 million between 1951 and 1991, the availability of food grains per capita rose from 395 grams per day in FY 1950 to 466 grams in FY 1992 (see Structure and Dynamics, ch. 2). However, considerable dualism remains in the Indian economy. Officials and economists make an important distinction between the formal and informal sectors of the economy. The informal, or unorganized, economy is largely rural and encompasses farming, fishing, forestry, and cottage industries. It also includes petty vendors and some small-scale mechanized industry in both rural and urban areas. The bulk of the population is employed in the informal economy, which contributes more than 50 percent of GDP. The formal economy consists of large units in the modern sector for which statistical data are relatively good. The modern sector includes large-scale manufacturing and mining, major financial and commercial businesses, and such public-sector enterprises as railroads, telecommunications, utilities, and government itself.

INDIA ECONOMIC CONDITIONS

India is one of worlds fastest growing economies. Apart from China, no other country has as high an economic growth rate as India. This country offers several economic advantages to its nationals as well as foreign investors. Indias economic boom has been made possible mainly through its information technology and outsourcing business. Indias rise as an Asian economic powerhouse has been quite remarkable. Economic conditions in India are now favorable for a wider cross section of people. Some economic facts about India India GDP (purchasing power parity) stood at around $2965 billion, as per CIAs 2007 estimates, of which services accounted for maximum percentage, followed by industry and agriculture. As per CIA estimates, total Indian exports totaled $140.8 billion and total imports totaled about $224 billion. India inflation Inflation in India rose to more than 11 percent in July 2008. But due to government measures and role played Reserve Bank of India, inflation was brought down to about 6 percent. Earlier in 2007, average inflation was around 5.3 percent.

Foreign direct investment With economic liberalization of India in 1990s, this nation began to generate a lot of interest among foreign investors. A rapidly developing economy coupled with national governments favorable attitude towards foreign investors, have generated a lot of revenue for India vis--vis foreign direct investments. Foreign direct investment data In 2007-08, foreign direct investment in India touched $25 billion. In previous time period, this figure was around $15.7 billion. As of May 21, 2008 Indias foreign exchange exceeded $341 billion. Ministry of Commerce and Industry projections indicate that India is slated to attract more then $35 billion as foreign direct investment. Ernst and Young had carried out a survey in June 2008, which identified India as fourth most attractive investment destination of world. All this augurs well for economic condition of India.

Economic Growth of Coimbatore The revenue growth in Coimbatore is nearly twice as much as the all-India growth, It is heartening to note that while the allIndia revenue growth is only 30 per cent, the revenue growth in Coimbatore Zone is 65 per cent almost twice the all-India growth, The surge in all-India revenue collection was reflected in the five commission rates in Coimbatore Zone as well. During the period April June 2011, the Coimbatore Zone had collected total duty/ tax of Rs. 585 crore. For the corresponding period last year it was Rs. 354 crore. The growth was 42 per cent in Customs, 86 per cent in Central Excise and 31 per cent in Service Tax. Controlbased regime to self-assessment-based system was the hallmark of the trust reposed by the Government on trade and industry. The stand-alone, customized and user friendly software ACES on the Central Excise and Service Tax side and ICES 1.5 on the Customs side only reinforced the intention of the Central Government to create an uninterrupted platform for the officers to fulfil the role of facilitator in a meaningful manner. The importance of being well-informed had a major role to play in a trust-based, self-assessment regime. While the need to be well informed was applicable to both officers as well as the trade

and industry, the advantage of being well informed was more for the trade and industry, as this would help them to run their business in a safe mode without attracting the penal provisions, interest clause and the deterrent action for non compliance and duty evasion. Earlier in the day launched the facility to file online the drawback shipping bills. The implementation of drawback bills under ICES 1.5 would replace the existing practice of filing of manual shipping bills and the issuance of drawback cheque manually. It would also spare the exporters of the trouble of visiting the customs stations for filing documents. For the country to become a superpower a robust tax administration was necessary and added that the Coimbatore Commissionerate was moving towards providing such an administration.