29

CHAPTER 2

A SYNOPTICAL VIEW

OF DEVELOPMENTS

IN CHHATTISGARH

30

CHAPTER 2 – A SYNOPTICAL VIEW OF DEVELOPMENTS IN CHHATTISGARH

INTRODUCTION:

2.1.1 : Having known about Indian Scenario of banks, it is very essential to know about the

status of banking in Chhattisgarh as the status of NPA’s is largely affected by the

occupational structure of the people, the general economic conditions of the state, the

developments over the years, the type of businesses started etc. This chapter deals with

the developments in general and banking in particular in the state of Chhattisgarh since it

attained statehood in the year 2000. An attempt is also made to identify the developments

of the selected banks taken under study.

2.1.2 Chhattisgarh, the 26th State of India, was carved out of Madhya Pradesh on

November 1, 2000. It is Located in Central India and covers an area of 135,133 sq km with

Raipur as the state capital. It is the 10th largest state of India by area. Chhattisgarh takes its

name from 36 (Chattis is thirty-six in Hindi and Garh is Fort) princely states in this region.

Chhattisgarh is bordered by Bihar, Jharkhand and Uttar Pradesh in the north, Andhra

Pradesh in the south, Orissa in the east and Madhya Pradesh in the west (FIG 2.1).

.

31

2.1.3. As seen in the map, Chhattisgarh is a state comprising 16 districts. Two more districts

of Narainpur and Bijapur were added later taking the total number to 18. It is essentially a

tribal state with focus mainly on agriculture. It s rightly termed as the “Rice bowl of India”

Chhattisgarh is a young and a new state but the reference of this state can be traced in

ancient texts, and inscriptions.

2.1.4. Chhattisgarh is a land of opportunities. Around one third of the population comprises

of Scheduled tribes. The primary sector employs around 80% of the population, but the

highest contribution to GDP comes from the tertiary sector. The state has many mineral

based industries as it is blessed with rich reserves of minerals like bauxite, iron ore, lime

stone and coal. 12% of India’s forest reserves is in C. G . Just under half the area in the state

is under forest cover. The spectre of naxalism looms large over the state. The major crops

produced in the state are rice, sugarcane, banana, pulses, and wheat. The forest products

that are produced are teak, sal, bamboo, sheeshal, mahua, tamarind, haldu, saja, sheesham,

and various herbs.

It is the richest state in mineral resources with all major minerals including diamonds

available in abundance. Major industries in steel, aluminum and cement are present in the

state. Chhattisgarh contributes substantially to the economy and human resources of the

country.

India’s current population is 117610 9753 approximately in Jan 2011.

Details of C. G Population (2001 and 2011 census) Table 2.1

Overal

l

TOTAL

Total(2001)fina

l

Total

(2011)Provisiona

l

Men2001

final

Men

2011 (P)

Women Women

2011(P)

Total 20795956 25540196 1045242

6

1282791

5

1034353

0

1271228

1

Rural 16620627 NA 8290983 NA 8329644 NA

Urban 4175329 NA 2161443 NA 2595831 NA

(Source: 2001-Directorate of Economics and Statistics, Government of India) 2011- census

india.gov.in

32

% of Chhattisgarh Population (2.03% of India’s population)

21% of Chhattisgarh’s population is urban population

Density per km. - 154. Around 1/3rds of C. G. population is Scheduled tribes.Primary

Sector employs 80% of population, but state’s highest contribution to GDP Is from the

tertiary sector 12% of India’s forest cover is in C.G. Just less than half area in the state is

under forest cover .

2.2 SECTOR WISE DEVELOPMENT OF CHHATTISGARH:

2.2.1: Agriculture More than 80 per cent population depends on agriculture. The area

under cultivation is 43 per cent. Main crops are paddy, wheat, maize, groundnut, pulses and

oilseeds. Forests occupy 45 per cent of the area. Agro-climatically, Chhattisgarh may be

divided into 3 distinct zones with immense potential for agricultural development.(Fig 2.2)

The plains cover districts of

Raipur, Mahasamund,

Dhamtari, Durg,

Rajnandgaon, Kawardha,

Bilaspur, Korba, Janjgir and

a part of Kanker district

(Narharpur & Kanker blocks)

along with a part of Raigarh

district.

33

2. Bastar plateau(Fig 2.3) – Zone 2

The Bastar plateau region comprises of Jagdalpur, Dantewada and the remaining part of

Kanker district.

3. Northern hills(Fig 2.4)-Zone 3

It covers districts of Sarguja, Korea and Jashpurnagar and Dharamjaigarh Tehsil of Raigarh

district.

2.2.2: Irrigation and Power

The irrigation potential of 13.39 lakh hectares was created during 1999-2000. An additional

irrigation potential of 0.18 lakh hectares was created during 2000-01. Ravishankar Sagar

Mahanadi Project, Hasdeo-Bango, Kodar, Jonk, Pairi and Arpa are some of the important

irrigation projects.

34

2.2.3 Mineral Resources

Chhattisgarh surprised many when it emerged as the state with the highest GSDP growth

rate of 11.49% during 2009-10. The growth indeed is the result of good governance, planned

infrastructure, optimum utilization of resources and above all, the support of investors from

all parts of the country and the world.

The state holds immense potential for further industrial and commercial investments in

Mineral based industries, Forest based industries, Herbal, Medicinal, Agriculture and

Horticulture based industries, Health and Hospitality sector, IT and BT, Automobiles and

their components, Power Machinery, Heavy Machine Tools and many other downstream

industrial units in the core sector.

The state has-

1925 MW of Power Generation

Iron Ore: 23.24% of National Reserves

Coal : 18.63% of National Reserves

Bauxite : 3.90% of National Reserves

Limestone : 6.61% of National Reserves

Dolomite :13.97% of National Reserves

Tin Ore : 99.94% of National Reserves

Gold : 4.41% of National Reserves

Corundum : 0.18% of National Reserves

World best Quality Kimberlitic Pipe (The source of Diamond)

16% of National Production of Minerals

27% of National Production of Iron and Steel

30% of National Production of Aluminium and its Products.

15% of National production of cement

200 Species of Herbal and Medicinal Importance

12% of National Forest Cover (69772 sq.km. -44% of State Area)

One IIM, One NIT & more than 50 Engineering, Technology, Management Institutes.

4 upcoming SEZs, Metal Park ,Apparel Park, James & Jewellery Park, Polymer Park,

Herbal & Medicinal Park, IIDCs and Industrial Areas in each District.

Paddy production of Million Ton.

35

2.2.3.1 The geological and tectonic set up of the State is very conducive to provide new locales

for excavation of minerals of different varieties. Almost 29 varieties of minerals have been

reported in the State, most important being precious stone diamond, gold, iron ore,

limestone, dolomite, tin ore, bauxite and coal.

2.2.3.2: The sole occurrence of tin ore in the country is reported from the State to the tune of

28.89 M.T. in southern part of Bastar region. Iron ore contemplates to form backbone for

industrialization of any State. At present, its small portion is being worked out and vast

potential still remains to be utilized through export promotion and putting up steel

manufacturing industries. The world’s best quality of iron ore is found in Bailadila deposits of

Dantewada district. The other important deposits of iron ore are located in Kanker, Durg and

Rajanandgaon districts. The State is endowed with its huge reserves to the tune of 1969 MT.

At present NMDC is exploiting iron ore for export to Japan and catering to the needs of

Visakhapatnam Steel Plant. Dalli-Rajhara group of mines is being exploited by BSP for their

Steel plant at Bhilai. The bauxite ore of magic metal Aluminium is found abundantly in Surguja,

Jashpur, Korba, Kawardha and Bastar region. It can support export orientation unit in the

State. At present, public undertaking company BALCO has exploited Phutka Pahar deposit and

now the Mainpat deposit is catering to the needs of BALCO at Korba.

2.2.3.4: The limestone deposits contribute a major share of mineral deposits in the State. It

sustains 9 major cement plants with an installed capacity of 14.75 million tones and

contributes to minor cement plants also. Cement grade limestone registered a significant

presence in Raipur, Durg, Bilaspur, Bastar, Anger, Kawardha and Raigarh districts. The reserves

to the tune of 3580.6 MT have been proved and vast area still remains to be explored. The

low-grade limestone is used as building material abundantly. The other important industrial

mineral dolomite, which is mostly used in steel plants and refractories, is located in Bastar,

Durg, Bilaspur districts and has total 606 MT reserves in the State. The largest share of

mineral revenue is contributed by coal. It is being exploited and marketed by Coal India Ltd.

2.2.3.5: Diamond incidences in Mainpur region of Raipur district have been confirmed and 8

potential blocks qualify in the State for possible incidence of kimberlite, the mother rock of

diamond. Other minerals like corundum, clay, quartzite, fluorite, beryl, and allusive, granite,

illuminate, talc, garnet, silica sand etc. are reported from the State. Rare precious minerals like

alexandrine are also reported. Apart from these minerals vast reserves and granite of various

36

attractive shades, which can used as decorative stone, are also available.

2.2.4: Industrial development in C.G :

2.2.4.1:The Industrial growth in Chhattisgarh which has came into being on November 1,

2000, has been very satisfactory and has now established its identity as a growth center of

cement and steel industries. A number of wide ranging industries can come up in this State

due to availability of minerals, power, labour and agricultural base. The recently announced

Chhattisgarh’s Industrial Policy is based on two primary factors. Firstly, creating basic

infrastructure, friendly labour relations, transparency and accountability and reducing red

tapism. The other factor is best planning and encouraging administration.

Considering the State’s potential for industrial growth, traditional sector like agriculture,

forest produce, minerals, weaving, handicrafts and modern areas like information technology

and biotechnology have been termed as the ‘thrust areas’. Thrust sector and mega projects

have been given some concessions. Government is working as a facilitator for creating more

jobs through industries, development of regions and increase in exports.

2.2.4.2: Large and Medium scale Industries:

The people of Chhattisgarh are set to usher-in new era, even as the entire country is reeling

under tremendous pressure due to recession. And, not just this, the Public Sector

Undertakings (PSUs), have a different and successful story to their credit in the tribal-

dominated Chhattisgarh State. The Bhilai Steel Plant (BSP), National Thermal Power

Corporation (NTPC), Bharat Aluminium Corporation (BALCO) and South Eastern Coal Fields

Limited (SECL) have managed to survive the reversionary phase, which till now, has the

industrial sector the world over under its spell. The success of these PSUs needs to be looked

in a broader perspective with special emphasis on human approach than technical excellence.

For, it is the due to the efforts of the people that these PSUs could with stand testing times.

BSP is an island in itself in the whole country”. The people of this State have made the

difference. The present pattern of work in BSP is an outcome of the four-decade exercise,

which has instilled a sense of discipline among workers. Even as steel-making technology has

undergone a sea change the world over, BSP has been churning out profits by adhering to

‘twin hearth’ furnace. Earlier, the BSP was fully dependent on its traditional ‘open hearth’

technology. “The worldwide recession too had its affect on the BSP by way of manifold rise in

37

input cost. Added to it, even the finished product did not fetch the desired amount. Besides

there was a sizeable cut in supply orders. Thus, BSP resorted to cost-cutting measures and

opted for technical innovations. The amount of steel produced by BSP is three times the rail

tracks spread all over the globe. Another achievement is the high connectivity metro rail at

Kolkata in West Bengal which runs due to efforts of BSP.

Balco (Sterlite), another PSU, which was in the eye of a storm over privatization, is the third

largest producer of aluminum in the country. Balco accounts for 15 per cent of India’s

Aluminium output. Balco has now set a target of producing 270 tonnes per day by December

this year. Work in Balco was stopped after 7,000 employees went on strike. Barring recent

protests over its privatization, it did not witness any major workers unrest all these years. The

Balco unit is now Sterlite and is progressing very well and now they are going for expansion. In

Korba-based NTPC, the credit for NTPCs success is due to the simple and cooperative people of

Chhattisgarh,. Another important aspect has been the cordial industrial relations between the

management and employees. The NTPC Korba is performing on the basis of plant load sector

(efficiency). Moreover, an official said that NTPC correlates better with the people of

Chhattisgarh, and this has been the driving force for it to progress in leaps and bounds.

Though the South Eastern Coal fields Limited (SECL) is another jewel in Chhattisgarh’s

crown, it appears to have been dogged by the out standings. Exorbitant out standings have

eclipsed SECL’s profits. “As long as the realization of the product is not done, no company can

be said to be earning profits”. The undivided Madhya Pradesh Govt. owes Rs. 700 to 800 crore

as outstanding. In the same breath, the company has been making profits, but waiting for

actual realization in cash. The SECL has undertaken a large number of community

development projects in the region with aim of helping the people of Chhattisgarh in return of

their cooperation and helping the company to grow. Unlike in other places, in Chhattisgarh,

the SECL has always remained bereft of mafias operating in the coal belt. The people’s

cooperation and the SECL welfare activities in the region have helped achieve compatibility

between the two. The other major factors that have to be taken note of are the availability of

power and mineral resources like limestone in Chhattisgarh. So the effort on part of the

government is to add value to the existing resources and convert them into a product so that

they fetch good price in the open market. Availability of surplus power, access to cheaper raw

material and no political interference are some of the factors that have added to the growth of

38

the PSUs in Chhattisgarh. Due to its mineral wealth, it has been able to attract about 165 large

scale and medium industries with an investment of Rs. 80 billion giving employment to 2.30

lakh persons – 58 units in steel and 48 units in the chemical/cement segment alone.

‘Chhattisgarh Vision 2010’ envisages the contribution of its industrial sector to Gross State

Domestic Product (GSDP), currently estimated at Rs. 55 billion (Rs.5500 crore), to double

within the next ten years. It has also decided to encourage private participation in all possible

areas. The main features of its new industrial policy emphasizes cluster based industrial

development, good governance and excellent infrastructure, strengthening small industries.

FIG 2.5- (SWOT CHART of C. G)

Threat Weaknesses

(source: Vision document- Government of CHHATTISGARH)

2.2.4.3: Priority Sectors: State has identified the major thrust sectors namely agro-based and

forest-based industries, mineral based industries, traditional industries like handloom and

handicrafts, sunrise industries like IT and Biotechnology, and finally infrastructure

provisioning. The Government intends to attract external investment by forging partnership

with the private sector and working closely with Industry Associations. The State Recognizes

39

the importance of value addition in the primary sector that largely contributes to the State

Domestic Product and employs 80 per cent of the State’s population. The forward linkage

from cultivation to processing will be developed through industries involved in the processing

of food grains, fruits, vegetables, herbal and medicinal plants, industries based on livestock

processing and fisheries as well as development of specialized industrial estates with provision

for infrastructure facilities like cold storage and air freighting of perishables. The State has

further decided to concentrate on mineral processing to maximize value addition within the

State as this sector has immense potential to attract large investment and generate

employment. Chhattisgarh has accorded high priority to Information Technology. A technical

nodal agency called CHIPS (Chhattisgarh InfoTech Promotion Society) has been created to

focus on IT in industry, governance and education. Biotechnology is a new area promising

good scope for utilization and exploration.

2.2.4.4: Infrastructure: Chhattisgarh has decided to develop two North-South road corridors

and four East-West road corridors of about 3000 km. This would lead to large investment

opportunities in related areas. Warehousing is likely to occupy pivotal position in developing

commerce & Industry and enable growth of commodity markets. The Government is

committed to providing a business friendly environment and to minimize rule and procedures

that impede efficiency and add to transaction costs of doing business. A special statute is on

the anvil to establish a three-tier system in which a State-level investment promotion board,

divisional level investment promotion committee and District level Investment promotion

committee will be in position soon. The idea in setting up these committees is to provide a

single window clearance with legal backing for investment proposals that would be

forthcoming in accordance with the new industrial policy. The State has already set up the

following industrial growth centers and industrial areas like Urla, (Raipur), and Siltara (Raipur,

Borai (Durg), Sirgitti including Tifra (Bilaspur), Bhilai-Durg, Rajnandgaon, Jagdalpur, Ambikapur,

Raigarh, Champa, Korba.

The Government had constituted Chhattisgarh State Industrial Development Corporation to

ensure creation and maintenance of industrial infrastructure in selected areas and growth

centers. Where ever possible operation and maintenance of industrial estates developed by

the State Government would be handed over to professional management agencies.

40

In line with its strategy to promote cluster-based industrial development, assistance will be

provided to establish common facilities covering quality improvement, technology up

gradation, market promotion and technical skills. In order to achieve long-term sustainable

growth, the Government has decided to strengthen small-scale industries and enhance their

competitiveness through improved product quality and process innovation. A package of

incentives has also been worked out for thrust industries, mega projects and small-scale

industries.

Industrialists should come forward to invest in states like Chhattisgarh without any

preconceived notions. Each place has its own peculiarities. Some think that others have no

place in competition, while a few feel their own assessment alone should prevail in decision-

making. If a proposal is technically feasible and financially viable one should take up the

project. A little adjustment in location of units according to sentiments of the local population

would instill confidence in their minds about the entrepreneur and his intentions.

Details of large scale investments in C. G(year 2009) Table 2.2

Sl No. Category No. of Units Investment Employment

(Rs. In lakhs)

1 Steel Industries 58 369708.24 79292

2 Engineering Units 07 5110.67 3012

3 Cement Industries 14 229910.29 8010

4 Chemical Industries 34 1435.56 130446

5 Solvent & Food Industries 35 5327.13 2614

6 Yarn & Fabrics 07 20425.82 5315

7 Paper, Plywood & others 10 8844.59 1912

Total : 165 800762.30 230601

(Data from Directorate of Economics and Statistics)

The ancillarization programme in Chhattisgarh commenced from M/S. Bhilai Steel Plant as

early as in 1978 with declaration of 31 Micro Small & Medium Industries as its ancillaries.

Bureau of Public Enterprises in line with the National Policy and guidelines issued this. After

41

this, MSMEDI, Raipur has conducted a detailed study about the requirements of BSP. With the

active support of BSP management, constant persuasion by MSMEDI and necessary

infrastructure provided by State Directorate of Industries, the number of ancillaries have risen

up to 175 nos. and number of Micro Small & Medium Units supplying parts/components have

gone up to 792 nos. by 1999-2000.. In addition to this some of the ancillaries were also

developed for few cement plants situated in Chhattisgarh. Through there has been significant

increase in the number of ancillaries and sub-contractors to Public Sector undertakings

situated in Chhattisgarh, but still good potential exists for development new

ancillaries/vendors and service facilities.. The Diamond mines of Deobhog area for which State

Govt. has associated with the world-class diamond Company will also generate a cluster of

new industries in MSME sector. In addition to this, there are existing large enterprises like

M/s. Jindal Strips Limited, Raigarh, M/s. Raymond Limited (Cement division), M/s. IBP Co. Ltd.,

Gopalpur, M/s. Prakash Industries Limited, Champa, M/s. Raigarh Paper & Board Mills Ltd,

Raigarh, M/s. Mohan Jute Mills Ltd., Raigarh .All Plants in the State require huge quantity of

repetitive nature of items, consumable stores and service faculties. Recently Govt. of India

enhanced the investment limit in MSME Sector from Rs. 1 Crore to 5 crore in hosiery and

Handloom items. This will further accelerate the industrialization in Chhattisgarh State viz. a

viz. generates the scope for vendors and service industries.

2.3: BANKING DEVELOPMENTS IN CHHATTISGARH: -

A) General Developments: (Table 2.3)

Parameter Year 08-2009 Year09- 2010 Other comments

No of branches 781 (rural),

353(semi

urban)and 366

(urban)

795(rural),

393(semi urban)and

412 urban

1.79% increase

11.33% increase

12.57% increase

Deposits 8116.44 crores 9645.07 crores 24.27%

Advances 4899.60 crores 3948.86 crores 21.26%

Investments 3841.03 4806.97 965.94 crores

42

Growth in Priority sector

advances

1702.11crores 5298.45 crores

Ratio of Priority Sector

advances to total advances

46.12% 56.99%

Agricultural advances

growth

18.44% 30.40%

MSME growth 852.66 crores 900.91 crores

Other priority sector

advances

3364.54 crores 3818.29 crores

Data from different quarterly editions of SLBC, Chhattisgarh

B) Review of GOVT Sponsored schemes (TABLE 2.4)

Name of the Scheme Year 2008(Rs

in crores)

Year2009(Rs in

crores)

Year 2010(Rs in

crores)

Swarna Jayanti gram Swarojgar

Yojana

92.65 crores 114.49 crores 138.94 crores

Swarna Jayanti Shahri Swarojgar

Yojana

6 crores 12.54 crores 9.02 crores

Antyodya swarozgar Yojana 2.32 5.73 6.10

Adivasi Vitta Vikas Yojana 1.50 4.49 3.84

Kisan Credit card 657.50 618.52 696.71

Self help groups 137.71 166.71 179.71

Credit flow to women 988.43 1257.58 1517.53

Credit flow to minority 277.57 392.03 601.45

Rural housing Schemes 23.27 37.82 52

Educational loans 35.81cr 42.19cr 94.67cr

NREGA - 17.73lacs 22.62 lacs

Data from different quarterly editions of SLBC, Chhattisgarh

43

C) Number of branches in C. G (Select regions) (table 2.5)

.

Name of the Bank Raipur Bilaspur Durg Raigarh Korba Rajnandagaon Total.

AXIS BANK 5 2 2 1 1 1 12

HDFC BANK 5 1 2 0 1 1 10

ICICI BANK 6 2 2 1 1 1 13

INDUS IND BANK 1 1 0 0 0 0 2

THE FEDERAL

BANK 1 1 0 0 0 0 2

BANK OF BARODA 8 3 9 2 1 1 24

BANK OF INDIA 8 3 7 2 1 1 22

CENTRAL BANK OF

INDIA 13 6 6 3 1 2 31

PUNJAB NATIONAL

BANK 12 12 5 4 5 3 41

STATE BANK OF

INDIA 64 39 42 22 29 11 207

TOTAL 123 70 75 35 40 21 364

44

D) Number of branches (Population wise classification in the state of C. G) table 2.6

Name of the Bank

Rural Semi urban Urban Metropolis Total

All banks

654 247 316 1217

AXIS BANK - 5 9 - 14

HDFC BANK - 3 9 - 12

ICICI BANK - 4 13 - 17

INDUS IND BANK - 2 1 - 3

THE FEDERAL BANK - - 2 - 2

BANK OF BARODA 9 7 15 - 31

BANK OF INDIA 4 7 15 - 26

CENTRAL BANK OF INDIA 38 27 19 - 84

PUNJAB NATIONAL BANK

24 15 13 - 52

STATE BANK OF INDIA

122 84 76 282

45

E) Bank and Population Group-Wise Number of Branches (offices not Included) of

Commercial Banks – March 09 (Table 2. 7) ALL OVER INDIA

(All data for the above three tables have been drawn from Reserve bank of India’s digital

publication of reports and trends in banking April 2009- Branch banking data)

A look at the tables highlights the scope for banking in the region of Chhattisgarh. It is

evident from the tables that all banks do not have a concentration of more than 2% in C. G.

Though banking in Chhattisgarh has undergone a sea change since the state attained

statehood, more needs to be done in this area. We would deal more about banking in the

coming chapters.

Name of bank Rural Semi urban Urban Metropolis Total

Bank of Baroda 1099 651 536 629 2915

Bank of India 1231 603 542 559 2935

Central Bank of India 1351 897 686 599 3533

Punjab National Bank 1881 895 849 702 4327

State Bank of India 4366 3311 2022 1773 11472

Axis Bank Limited 30 189 314 253 786

HDFC Bank Ltd. 67 325 468 548 1408

ICICI Bank Limited 138 461 400 410 1409

IndusInd Bank Ltd. 5 36 88 53 182

Federal Bank Ltd. 39 321 152 99 611