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As Narendra Modi took oath for his fourth term as the Chief Minister of Gujarat,
Kutch, once the most arid area of the state, celebrated Rann Utsav amid
thousands of tourists both from the country and the world. One can hardly
believe that only a decade ago, when Narendra Modi took the baton from the then
Chief Minister Keshubhai Patel, the same land was reeling under the severity of
an earthquake and neglect. Kutch is just one example. With meticulous planning,
huge promotion and proper execution, Gujarat has been able to establish itself
as the investment capital of India over the years.
Vibrant Gujarat
It was perhaps the vision that the combination of industry and agriculture alone
can drive Gujarat forward, prompted Modi to organise Vibrant Gujarat summit in
2003, within two years of being sworn in.
The platform enabled investors to come with business proposals to the government
surpassing red tape and an otherwise time consuming process. The model proved to
be so successful that many states were inspired to use the same to attract
investment to their state. The government of West Bengal, for example, organised
Bengal Leads following same pattern.
During the latest edition of Vibrant Gujarat in 2011, the government reportedly
attracted record investments worth `20.83 lakh crore. Recently,an ASSOCHAM
report showed Gujarat had emerged as the top investment destination in the
country. According to this report, Gujarat clocked a share of about 13.52
percent in the total live investments worth `120.34 lakh crore at the end of the
year.
“Out of the total proposals, Gujarat attracted 39.2 percent in electricity, 24.2
percent in manufacturing, 16.2 percent in services, 14.3 percent in real estate,
5.2 percent in irrigation and 0.9 percent in mining,” said Bhagyesh Soneji,
Chairperson of ASSOCHAM Gujarat Council.“Out of the 20 industrial states,
Gujarat, Maharashtra, Andhra Pradesh, Odisha and Karnataka have clearly emerged
as the preferred investment destinations by attracting 53.56percent of the total
live investments,” said DS Rawat, national secretary general of ASSOCHAM.
Going beyond statistics
When Modi took over, Gujarat was already a developed state. According to data of
the state’s Socio-Economic Review, 2011-2012, road infrastructure statistics
suggest that very little was added to road length since 2002. It was 74,018 km,
counting all types of roads, in 2002, and was 74,117 km in 2009. About 5,000 kms
of road was tarred during 2000-10, compared to 23,000 km during 1990-2001.
But if we go beyond statistics, we would find that better governance, management
power and proper promotion that have worked wonders for Gujarat. Land allocation
and tourism promotion and several other sectors have seen the benefit of better
administration.
The tourism department is leaving no stone unturned to attract domestic and
foreign tourists. The department has spent a huge amount of money to promote
local culture and festivals. Before Modi, no one thought of bringing a brand
ambassador like Amitabh Bachchan to promote tourism. According to media reports,
the ‘Khushboo Gujarat Ki’ campaign by megastar Amitabh Bachchan promoted the
growth of tourism in Gujarat by 14 percent, twice that of the national growth
rate.
Land
Like the other 27 states of the country, Gujarat too is blessed with some
natural resources. But the real difference is that the government knows how to
use them judiciously. That explains the reason for the state being the largest
producer of milk in India,in addition to being a global destination for other
industries. There are shortcomings, but the positives have overshadowed
theseniggling doubts. Land is one such big example. At a time when the
availability of land for big ticket projects hasa contentious issue in the
country, Gujarat is home to big automobile, textile and other projects.
The case of Maruti Suzuki India (MSI), the country’s largest car maker,
highlights the sterling effort of the Modi-led government.The company has land
at two locations in Gujarat. The first one was offered by the government and the
second one is a private land that is directly acquired by MSI with some
negotiations by the government. MSIhas started spadework to set up its second
facility in Gujarat with acquisition of the additional 600 acres, to supplement
its existing plan to investing `4,000 crore for setting up a plant in the state.
If media reports are to be believed, the Gujarat Industrial Development Board is
working over-time to prepare the newly acquired area for development works. The
area is known for issues like water logging and loose soil. For this
improvement, the Gujarat government has sought scientific.
This is the MSI’s first plant outside Haryana. Maruti has committed investments
of `8,000 crore to build a 1,100-acre mega-factory in Mehsana district to
produce 1.5 million cars per year at peak output by 2018-19. Production is
expected to start by 2016. With a focus on exports, this plant is expected to
become parent Suzuki’s global small car hub.
Such is the pace of development in these areas that Special Investment Regions,
associated Special Economic Zones and DMIC put together bagged 12 MoUs with an
investment commitment worth `1.39 lakh crore, expected to generate an estimated
129,000 jobs.
Automobiles
The controversial land allotment to the Tata Nano project, which was shifted to
Gujarat’s Sanand from Singur in West Bengal, has enabled the state to flourish
into India’s international car hub. In June last year, after signing of the
State Support Agreement (SSA) agreement with Maruti Suzuki for its manufacturing
facility in the state, Modi said that Gujarat had emerged as a prominent global
hub in the automobile sector.
“The journey started with Tata Nano, Ford, Peugeot, and now Maruti has entered
Gujarat which will strengthen ‘brand Gujarat’ as a globally preferred business
location,” he said. Modi also pointed out that manufacturing and engineering
sector in Gujarat contributes over 27 percent to state GSDP and overall 9
percent to the national engineering output. There are more than 30 engineering
clusters, with more emerging clusters like Sanand-Viramgam, Mandal-Becharaji,
Halol-Savli, Anjar, Santhalpur, making Gujarat a global hub in the engineering
sector as a whole.
But statisticsare not something that Modi has used to impress the investors. As
Anand Mahindra, Chairman and Managing Director of Mahindra & Mahindra, said:
“What struck me when Modi’s team made the presentation of the event was they did
not quote the usual statistics - GDP growth and the like. They began with the
improvement in the infant mortality rate, girl child education... that’s what
caught my attention. We will sign about six MoUs of `3,000 crore, which will
have `11,000 crore multiplier investment and create 1, 00,000 jobs.”
Power
Gujarat again is better placed when it comes to the power sector. As the
socio-economic review also shows, distribution has improved remarkably in the
last 10 years. However, the growth in installed capacity and generation has been
higher during 1990-2000 than 2000-2010, including participation from the private
sector. The installed capacity increased from 4,823 MW in 1990 to 8,343 MW in
2000 (1.73 times), to 12,008 MW in 2010 (1.44 times). Generation was 22,834 MW
in 1990 and increased to 49,379 in 2000 (2.2 times), to 69,883 MW in 2010
In a way, Modi is laying the industrial turf for the future by keeping a firm
policy along with an educated and vibrant workforce ready for industries that
are keen on investing in the state. As he put it in his opening remarks at the
latest version of vibrant Gujarat summit: “Gujarat offers the best
infrastructure. Labour problems are zero and there is an abundance of critical
drivers.”
These were perhaps the reasons thatthe re-election of Modi has generatedhuge
reactions from the corporate world. RC Bhargava, Chairman of the country’s
largest carmaker, Maruti Suzuki, and one of the biggest investors of the state
said: “What we look for before investing is good governance, which is needed for
any industry to work well. As long as that is met, along with good
infrastructure, it is good for us.” Adi Godrej, Chairman of the Godrej group and
President, Confederation of Indian Industry, while complimenting the BJP and
Modi said, “The stability in the state will enhance the confidence of the
industry and herald new investments.
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