Ahmedabad: Thriving Economy Led by Industrial Growth
As a city, we may boasts of many first achieved at the urban level, Some of the notable infrastructural achievement which have led to urban transformation of the city and also paved the pathway that have been emulated by other urban setups across the world have been the implementation of BRTS / Riverfront development on a self sustainable format, development and implementation of Town Planning Schemes to note a few. But unlike’s the Bangalore’s and Hyderabad, we have pre dominantly remained an industrial driven economy and note service sector / IT/ Financial services driven economy.
Well one look at the thriving hotel industry would give a clear indication which way the industrial development going. Starting the year of 2007, when Ahmedabad got the benefit of fast action by the government bringing in the prestigious NANO Project to nearby town of Sanand. Automotive sector may be in decline for couple of quarters now but the long term prospective is always positive, which has potentially changed the entire industrial scenario of the state but predominantly of Ahmedabad. The city which is more famously known for Textile in the earlier years and lately for the pharma suddenly got attention of the entire country and beyond. Sanand became the hotbed for all potential new investment coming to the country.
TATA was followed by Ford and then Maruti Suzuki setting up in Becharaji. Like Real Estate industry which has strong ancillary industry requirement, Automotive is equally dependent on their ancillaries. So if TATA committed couple of thousand crores for setting up the plant, the ancillaries committed double the amount to support auto manufacturer.
The same further trickled to the small and micro industries. The below chart clearly shows the new employment that was created in the years from 2006 to uptill 2014. A simple maths would show that the new employment would broadly support a population of 15 – 20 lacs, considering one working person supported a family of 3-4.
Some of the big names that have come in the last 5 – 10 years post TATA & Ford are Maruti Suzuki, Honda Two Wheelers, Voltas, Bao Steel, Nivea, Alstom, Graizano, Minda, Vestas group. On an average the investment would range from 6- 8 thousand crores to around minimum of 300 crores. Jointly they have invested 50,000 Crore in the last decade.
If we are to compare the employment chart above, it shows that for every crore invested it has generated close to 30 person employment, but in case of large industries the ratio would be 1 employment for every 1 crore invested. But that means minimum of 50,000 jobs in high technology industry paying an above average salary.
What all this has done is benefit the city manifold. One the majority of the new industries came up did not have base in the city, as a result a large percent of the employment was transferred to the city from other cities. Imagine of the 5.5 – 6.0 lac new employment even if 30% came from outside the city, this would result in immediate need of housing of close to 1.5 – 2.0 units for the employee and their families. This is where the city has benefitted in terms of real estate tremendously.
This new wave immigration created a demand of housing and other social infrastructure in few micro markets and continuous development of the industries and technology is fuelling this movement to the city and should remain unabated for the coming half a decade as long as there is not drastic change in the government policy or drastic shortage of labour. Micro market that were absent in the city scape have suddenly become most sought-after locations for the new migrating populations.
Neither of the same is seen in the near horizon, hence we can project the speed of growth to remain continuous in the coming years. On the other end GIFT the Financial Techno city may not have been equally successful in bringing investment and hence employment to the city.
The Last decade surely belongs to the industrial growth of the city and city diversification from textile- pharma hub to become leading auto hub of the country. Each new year has brought news of large corporate setting up their manufacturing base in the city. If last year was about the world largest wind blade manufacturer setting up their shop in the city, then this year Voltas with the foreign partner having committed to investment of 800 crores in Sanand GIDC.
Local MSME industries have seen their turnover growing manifolds in the last couple of years, be it the industrial salt supplier or paint derivatives manufacturer. Typically the industrial jobs pay scale tend to be lower compared to the service sector, but the city has good quality technology driven industries coming to the city. The pay scale typically tend to much higher compared to the other industrial sectors. Infact auto industries are considered one of the best paymasters in the industrial sector.
As long as the city and state continue with their existing policy of providing inviting and inclusive opportunities to new technological advancing manufacturing industry base, we are looking at an ever-growing diverse employment base in the coming decade.