Industries in Pondicherry

Major Industries

While Pondicherry is not rich in natural resources which would provide the Union Territory comparative advantage in particular industries, its attraction to investors has been in terms of easy availability of land, water, labour and power and in terms of incentives, concessions and tax holidays.

Over the last couple of decades, the Union Territory has built up infrastructure which has served as a basis for industrial growth and which can aid growth in the future. First class infrastructural facilities are imperative in a context where some tax concessions and low tax rates - one of the reasons for investing in Pondicherry - are being withdrawn in part.

During the nineties growth rate for the industrial sector (in terms of value added) between 1993-94 and 1998-99 was 21.09 per cent. Manufacturing industry grew at 23.66 per cent and registered manufacturing at 26.82 per cent. There seems to have been some type of a revival in the construction industry as well which registered a growth rate of 3.61 per cent. Electricity, gas and water supply grew at 5.34 per cent as shown below. Part of the higher growth rate of industry could be attributed to the liberalisation process - industries did not need to get a license from the Centre in most cases.

Number, Types and Location of Industries

According to government records, there were 6,555 industries in the Union Territory in 2000. Out of these 6,555 industries, 42 were large scale, 125 medium scale and 6,388 small scale. The total employment in these industries was 76,699 out of which 53,168 were in the small scale sector.

Table below gives details of the types of industries available in the Union Territory. Chemical and chemical products is the largest category comprising 22.21 per cent of total industrial units, followed by food products (12.65), metal products (11.67), cotton and wool textiles (11.64) and leather, rubber and plastics (9.03). Most of the industries in all the sub-sectors are small-scale in nature.

As per location, 80 per cent of these industries are in the Pondicherry region, namely 5,271 out of 6,555. The remaining 20 per cent include 827 units in Karaikal, 231 in Mahe and 226 in Yanam. Most of the 827 units located in Karaikal are small-scale (818); so too the case with Mahe and Yanam, namely 230 out of 231 for Mahe and 218 out of 226 for Yanam. The bulk of both large-scale and medium-scale industries are located in the Pondicherry region. Industrial development both now and in the future is likely to be concentrated in the Pondicherry region of the Union Territory.