Gujarat is one of the favourite destinations for investors? How do you plan to retain your premier position?
Yes, Gujarat is one of the favourite destinations for investors. This is evident from the fact that Gujarat was able to get an impressive response during the Vibrant Gujarat Global Investors summits in 2003 and 2005. Both these summits together have been instrumental in getting project proposals worth Rs 1,80,000 crore. This is also reflected in the number of IEMs filed by investors with the Government of India. During 2003, 395 IEMs with an investment of Rs 22,781 crore were filed; in 2004, 547 IEMs with investment of Rs 28,470 crore were filed; and in 2005 (up to April) 242 IEMs with investment of Rs 19,785 crore have been filed. Gujarat occupies the No.1 position [in IEMs] among all the states in 2005. This impressive performance indicates investor confidence in Gujarat.
Several factors have contributed to this development. The Government of Gujarat has given priority to industrial development since its inception as a separate state in 1960. Successive governments have introduced measures to improve the climate for industrial development.
Apart from favourable policy, the state has continued to improve infrastructure. Gujarat has developed a network of industrial estates with industrial infrastructure throughout the state. Gujarat has provided reliable power supply to industries. Besides, captive power generation has been allowed. Gujarat has good road and rail network connecting the hinterland of the country. The state has opened up its long coastline for developing port facilities. Kandla Port continued to enjoy second position in terms of cargo handled. Three new ports and two LNG terminals have become operational.
Gujarat is also endowed with good natural resources. The state is exploring and exploiting mineral resources like limestone, bauxite, lignite, China clay, bentonite and others. The discovery of oil and natural gas during early 1950s helped the state to develop oil refineries followed by petrochemical and downstream industries. The long coastline has facilitated marine resources, especially salt and aquaculture, besides development of port and port-based industries. Gujarat is also rich in commercial agriculture like oil seeds, cotton, tobacco and sugarcane; this has helped to develop agro-processing industries.
But it has been reported that many projects signed during Vibrant Gujarat have been shelved due to your government's failure to clear land titles.
We recently held a review meeting on the MoUs signed and project proposals received during the Vibrant Gujarat Global Investors' Summit. During the Investors' Summit 2003, the state received 76 proposals with investment of Rs 66,068 crore. Of these, 12 projects having investment of Rs 7,990 crore have been implemented and 47 projects having investment of Rs 49,381 crore are under implementation. Of these, only 13 projects are [held up] due to clearances that were addressed during the review meeting. Thus, over 87 per cent of investments proposed through MoUs in 2003 Summit are getting frucitified.
The Vibrant Gujarat Global Investors' Summit 2005 was held in January 2005. The summit resulted in the signing of 226 MoUs having investment of Rs 1,06,160 crore. These included investments in different sectors like agro-processing, power, oil and gas, IT and BT, chemicals, textiles, gems and jewellery, engineering industry and urban development. The state has continued to receive a number of enquiries thereafter. Out of these, 7 projects have been implemented with investment of Rs 245 crore. Besides, 95 projects have been taken up for implementation with investment of Rs 43,036 crore. This outcome is in just four months.
But, hasn't the state failed to take advantage of the IT boom?
We have taken effective steps to promote IT. A separate department for promotion of information technology has been created. Besides setting up an exclusive industrial estate for electronics at GIDC, Gandhinagar, efforts have been made to promote software parks. Software park at Gandhinagar, GNFC Info Tower at Ahmedabad and Infocity in Gandhinagar have come up and IT units have started functioning. The state government is also finalising a new IT policy.
There is criticism that too many sops given to industry in the past has affected the state's current revenue.
This criticism is not correct. In fact, the incentives for development of industry were initiated by the Central government in 1973. All states followed and introduced incentive schemes. These were modified at intervals to attract investment. Gujarat is not an exception. During the last 15 years, since the Government of India introduced a liberalised industrial policy, Gujarat has attracted over 8,000 project proposals with investment of over Rs 2,50,000 crore through Industrial Entrepreneurs Memorandum (IEMs), Letters of Intent (LoIs) and setting up of 100 export-oriented units (EOUs). Of these, the state has been successful in implementing 4,232 projects, having investment of Rs 1,04,036 crore. Besides, 1,424 projects with investment of Rs 70,054 crore are under implementation. These do not include MoUs signed during the
Vibrant Gujarat Global Investors' summits.
With this kind of investment in industrial sector, there has also been development of service sector industries and area development. The Gross State Domestic Product (GSDP) at constant (1993-94) prices has increased from Rs 49,194 crore in 1993-94 to Rs 1,03,951 crore. The share of manufacturing sector has been about 32 per cent.
The tax revenue in the state has increased from Rs 8,161 crore in 1999-00 to Rs 11,181 crore in 2003-04, registering 37 per cent growth during the five-year period. On the other hand, the share in Central taxes has increased from Rs 1,665 crore in 1999-2000 to Rs 1,957 crore in 2003-04, registering only 17 per cent growth during the same period. Thus, Gujarat's share in Central taxes has declined putting more pressure on the stat's resources for developmental activities.
Some industrialists have suggested that the requirement of non-agricultural clearance should be abolished.
The conversion of agricultural [land] to non-agricultural use of land is under the Act. The state government has simplified the procedure by introducing deemed NA provision in
1997. This has been working very well.
IEMs Approved by GoI
||Investment (Rs Cr.)
|2005 (till April)