Mr. Modi, India Inc. prefers you as CEO of Gujarat rather than as Chief Minister of the state. How do you react to this corporate tag?
I do not consider myself as the ‘CEO’ of any state. People have been using this corporate tag for me but I feel that any ‘CEO’ just has to look after his company’s good. However, I don’t look only at my government’s good. I look after the welfare of the people of my state. I dream of a Gujarat which works for the upliftment of the common man, builds a strong platform for good governance, ushers in innovation, involves ordinary people in decision making, and bridges the divide between the developed nations and us. This has been my prime motivation and I have spent every day to turn this dream into a reality.
And obviously, I am more accountable than any CEO. My office has been certified with an ISO 9001:2008 which justifies the efforts we put in continuously providing transparent, efficient, effective and good governance as per the expectations and aspirations of the citizens, bringing about an exemplary work culture.
Gujarat has registered over 10 per cent growth on average in the past five years. What do you attribute this growth to?
Political stability, good governance, sound infrastructure and labour peace are the primary reasons behind Gujarat’s consistent high growth. Today, Gujarat is the industrial and corporate face of the country. You would have seen the amount of interest we have been generating from all over the world. This has not happened overnight; this is the result of a decade of hard work and longterm planning. However, there isn’t one simple reason for our success: a number of factors are behind it.
In Gujarat, strong economic credentials are supported by an accelerated reforms process. We have in the last decade focused on infrastructural development, proactive governance, building quality manpower and creating an innovative platform to do business. Anyone who comes to Gujarat is impressed not only by our world-class roads but also by many other feats like non-stop quality electricity in each and every village in the state. Eyes of my colleagues from other countries widen when I tell them we have recorded an average annual growth rate of 10.4 per cent in the last five years. Our contribution alone in India’s exports is close to 22 per cent and overall contribution to India’s manufacturing sector is around 27 per cent.
We are determined to provide a business-friendly regulatory environment. That includes simplification of procedures, the creation of online investor support software, a rigorous investment monitoring system and a land bank. No wonder then Gujarat tops the nation as the most preferred investment destination as per a recent Assocham study.
Strong fundamentals: The truth is Gujarat’s fundamentals are strong. They are strong not in a particular sector but across all the economic sectors. People are a part of the everyday progress. Governance in the state has been marked by a professional approach. And it is also supported by an effective grievance redressal system. Officers who are involved in bringing investment to the state also bring a great sense of accountability to their work.
Gujarat is a place where infrastructure development has kept pace with economic growth. Gujarat is a place where rural development has kept pace with urban growth. The satisfaction of workers has kept pace with industrial growth. For the past one decade, Gujarat has dreamt and Gujarat has delivered.
What lessons can other states learn from Gujarat’s experience?
There is no magical secret behind Gujarat’s success. There is dedication. There is commitment. There is hard work and inspiration. There is strong political will, futuristic vision, robust infrastructure, quick decision-making, industrial peace and progressive government policies. We in the Government of Gujarat are committed to make our vision a reality – to make Gujarat a globally preferred place to live in and to do business through accelerated yet balanced, inclusive and sustainable growth underpinned by a robust social, industrial and physical infrastructure.
We have made a very simple promise to all who wish to invest in Gujarat. We promise an environment that minimises red tape and enables business. We promise a land where an investor comes with a dream, sows an idea, and witnesses the idea growing into a flourishing business in record time. It is this promise that brought Tata Nano to Gujarat and we gave them a clearance within three days. Our quick decision-making has time and again paid us rich dividends and in this case propelled us to becoming India’s Auto Hub.
Foremost in infrastructure: Today, Gujarat ranks foremost in infrastructure and is also the petrochemicals capital of the country. If other states can level up their basic infrastructure for investors, I am sure the investments will come to each and every Indian state.
Gujarat’s multifaceted growth and excellence has been recognised not only in the country but also in the entire world. This is because we work with people. We work holistically and strengthen the entire value chain. People’s participation is not simply a component of good governance but the main aspect of democratic good governance. Gujarat has understood this well and this has been the driving force behind its overall success.
Which critical sectors is your government most likely to focus on in coming months?
Gujarat’s formula for balanced economic success is to avoid overdependence on any sector. We have evolved a three-part development model for Gujarat: one-third industry, one-third services sector, and one-third agriculture. If there is a balanced development in all three, the state economy can never slow down. This has been our philosophy for overall growth.
Keeping this in mind, we have identified some critical sectors to boost growth in the near future. Manufacturing, which includes engineering, auto, gems and jewelry, textiles, pharmaceuticals and chemicals will receive strong attention.
Sustainable development: With rising urbanisation, sustainable development will form the backbone of our growth strategy. Urban development, infrastructure development, healthcare, water recycling and treatment, renewable energy and technology will be some of the key sectors. Gujarat’s ports will continue to be launch pads of Indian enterprise and so ports, shipbuilding and associated industries will also be focused upon.
I strongly believe that the quality of education today decides the tomorrow of Gujarat. My dream is to make Gujarat the knowledge hub of India. Hence, knowledge sector and innovation has been given prime importance in our future plans. In agriculture, we want to create a post-harvest agriculture infrastructure to ensure better access to markets. Thus, agribusiness and food processing will also feature in our future plans.
Going forward, have you set any higher targets for industrial growth?
India’s manufacturing sector’s contribution to GDP is 16 per cent, of which Gujarat contributes 27 per cent to the manufacturing sector and we have a strong manufacturing base with robust infrastructure facilities. We have now set our sights on achieving higher targets.
The state government has planned to increase the manufacturing sector’s contribution and we are coming up with a revised state manufacturing policy that will determine the road map for achieving the higher industrial growth target. Robust infrastructure, progressive reforms, responsive governance and an environment that enables business have been the key drivers behind Gujarat’s rapid industrial growth. These will be an integral part of our future plans too.
Significance of MSMEs: We welcome not only the Tatas and Ambanis but also micro, small and medium industry. We recognise the significance of MSMEs which could be seen in the recent Vibrant Gujarat Global Investor’s Summit 2011 where a lion’s share of MoUs (54 per cent) were signed in the MSME segment, in turn generating employment for thousands of unskilled, semiskilled and skilled workers. Reforms like improving credit flows, skills, access to raw materials and markets and rationalising regulations provide impetus to MSMEs and manufacturing as a whole. We will bring in further reforms in this segment too.
My government is strongly committed to the rapid industrial development of Gujarat for the rapid industrial growth of India.
Gujarat’s share of urban population is 37.36 per cent compared to 27.78 per cent nationwide. Higher urban population poses challenges to transportation, sewage and water infrastructure.
Urban areas contribute significantly to the state economy both in manufacturing and services sectors. Latest census results show that the share of urban population in Gujarat has augmented from 37.36 per cent to 42.6 per cent. Hence, urban planning is of prime importance for my state.
We have made various interventions to create better infrastructure facilities in municipalities over the last decade. In 2009, we launched the Swarnim Jayanti Mukhya Mantri Shehari Vikas Yojana for inclusive development of municipalities with an overall outlay of Rs.7,000 crore. All major sectors such as water supply, sewerage and drainage, roads and bridges, solid waste management, renovation of heritage buildings, and conservation of water bodies have been covered under this holistic scheme.
Transport systems: With increasing urbanisation, we have also paid special attention to building efficient transport systems. The bus rapid transit system in our cities is an excellent example of this. This initiative has already won the Global Sustainable Transport Award in 2010 and has revolutionised urban lives in Gujarat.
Work has also begun on the Ahmedabad- Gandhinagar metro project. Besides, we have envisaged the replacement of conventional fuels by CNG in all buses and autorickshaws.
It is imperative to not ignore the demands of rising urbanisation. Hence, development around the rivers Sabarmati and Tapi has been undertaken to revitalise the city and improve existing infrastructure. Water harvesting systems are also being encouraged in order to secure the needs of the future. These are just a few of the concrete steps that we have envisioned and taken to keep Gujarat at pace with rapid urbanisation.
Gujarat ranks third in total installed power capacity in India and offers uninterrupted power supply. What are your future plans in the power sector?
In 2001, when I came to power, the state was facing a shortfall of nearly 2,000 MW. People used to come and request that there should be power supply at least during the dinner time. The situation has changed: from power deficit we are a power surplus state today. We currently have 4,000 MW of excess power and within a year or so we expect to have 7,000 MW of surplus power that will help eradicate the darkness in the entire country.
Today, we have not just added megawatts to our electric generation, we have transformed lives in our rural areas by providing uninterrupted 24×7 quality power to all the households of Gujarat under the Jyotigram Yojana. The smiles are back on the farms too as eight hours of dedicated quality power is being provided to agriculture consumers from dedicated agriculture feeders. This has transformed the villages and made life comfortable and what is more important ensured rapid development of small and cottage industries, agro processing industries.
Renewable energy: We have recognised the adverse impact of climate change due to global warming and thus have formulated an integrated energy policy emphasising on green and clean energy. I strongly believe renewable energy is the energy of the future and we are committed to create a conducive environment for setting up of renewable energy based power projects.
Today, the installed capacity of wind generation has reached to 2,560 MW and solar power has reached to 600 MW. This capacity is planned to be increased further up to 5,000 MW for wind and 2,000 MW for solar by the end of next five-year plan.
We are also planning for a manufacturing policy for solar power and other renewable energy equipment in order to attract further investments to the sector. My government is committed to establishing Gujarat as the Renewable Energy Capital and we will come out with the new conducive policies from time to time for maximum utilization of renewable potential.
With the longest coastline in India, what are your plans for developing port and related infrastructure?
Currently, about 95 per cent of India’s foreign trade (in volume) and 70 per cent (in value) is carried through sea routes. Billions of rupees worth of infrastructure has been created to cater to this industry in India. Gujarat has been the leader in this sector and we already carry almost 35 per cent of India’s sea cargo.
Our vision is to achieve maritime excellence by port-related development of the entire coastline of Gujarat. Over the last decade, we built world-class port facilities in the state like the country’s first dedicated chemical terminal at Dahej in 2001, the first PPP rail link in the country (Pipavav, 2003), and first doublestack container train (Pipavav, 2006). India’s largest coal terminal was established for ultra mega power plant in 2010 at Mundra; and the country’s most advanced vessel traffic management system in 2010.
We intend to continue being the frontrunner in port-led development of the state. Early this year, we laid the foundation for the Ro- Ro service between Dahej and Gogha. When completed, this will be India’s first world class ferry service, and will reduce the traveling distance between south Gujarat and Saurashtra from 380 km by road to 31 km by sea, and be environment friendly as well.
The Gujarat government is developing new greenfield ports at Chhara, Kachchigadh, Dahej, Nargol and Mahuva in conjunction with private developers. Additionally, ports are also planned at Vansi-Borsi, Modhwa and Bedi. To showcase port-led development, we have decided to develop Mundra and Pipavav as model port cities.
Shipbuilding: Another thrust area for the government is development of shipbuilding capabilities in the state. Gujarat has a share of 60 per cent in Indian shipbuilding order book and Gujarat intends to grow this share. For this purpose, the Government of Gujarat came out with the first shipbuilding policy of the country in 2010. Under the policy, Gujarat will develop integrated clusters of shipyards (MSPs). The MSPs will provide common seaside as well as shore-side infrastructure and facilities. The government has identified Dahej and Bhavnagar in the initial phase and subsequently at other new greenfield locations like Adri, Dari, Khara, Kaswa, Chachchi etc.
At the same time, we have encouraged integrated coastal development particularly of the coastal communities. We have launched an ambitious programme called SagarkheduYojna for all round development of our coastal belts.
Investments in world-class railroad pipeline infrastructure linking the coastline have helped Gujarat’s ports dominate India’s maritime scenario. But the development of the communities in the coastal regions is the key to the peace and prosperity of Gujarat’s port-based transactions.
Gujarat ranks No.1 in terms of total area under SEZ. What is the impact of these SEZs on overall development of the state?
SEZs are engines of growth and Gujarat is a leading SEZ state with the highest geographical area of 29,424 hectares under SEZ development. We are also the first state to formulate an SEZ policy that includes flexible labour laws and exit options for investors. The recent Vibrant Gujarat Global Investors’ Summit witnessed massive investments in these SEZs and since most of these SEZs are manufacturing driven, they offer tremendous employment generation potential.
We will soon have many more fully operational SEZs. The sectors covered include IT/ITeS, engineering, power, textiles and apparels, multi-product and nonconventional energy. In 2009- 2010, SEZs in the state contributed a massive Rs.99,481 crore ($19,896 million) worth of physical export.
What measures have you taken on the environment front?
I firmly believe that today environmental issues cannot be neglected. For a growing economy like Gujarat, development is a given. But dedicated efforts need to be taken to ensure sustainable development. Gujarat has taken a number of pioneering initiatives to combat the rising environmental concerns. We are India’s first and the world’s fourth government to have started a separate department for climate change and are the highest carbon credit earning state in the country.
Green energy: We have also emerged as a leader of India’s future energy programme with green energy becoming one of our focus sectors. We are the first state in the country to possess an independent policy on solar energy (Surya UrjaNeeti) and wind energy (PawanUrjaNeeti). Asia’s largest solar park in Banaskantha is set to change the face of North Gujarat. Gujarat is surely set to be the solar capital of the world and such initiatives will go a long way in meeting the energy demands of the future.
Wind energy has been another focus area where Gujarat has powered ahead with a a record capacity of 2,176 MW generated as against recorded capacity of 1,725 MW, 1,525 MW, 191 MW and 35 MW produced by Karnataka, Rajasthan, Andhra Pradesh and Kerala, respectively.
Gujarat’s upcoming smart cities are taking the eco-friendly route too. For example, Gujarat International Finance Tech (GIFT) City will use the energy-efficient district cooling system instead of airconditioning. It will also use an automated waste collection system that sucks away garbage from buildings at high speed. Automated waste collection can be combined with biomass energy generation systems, so GIFT will burn waste to generate energy. Isn’t this a fine specimen of sustainable infrastructural development?
One person alone cannot plant the seeds for a greener planet. It is our collective responsibility to fight for a greener, safer and a more sustainable future.
Over 7 lakh students graduate in Gujarat every year. What are the initiatives for providing job-oriented training, especially in ITIs and vocational courses?
If India has to emerge as ‘Vishwa Guru’ and emerge as a global superpower, then effectively utilisation of its young demographic dividend is a must. By invigorating our talent pool, in one decade Gujarat’s youth will be the engine of growth not just for India, but also for the world.
We have already begun well. Gujarat is the leading state in the country for the seventh consecutive year in providing employment. We have specially focused on providing skill-specific vocational educational facilities to meet the requirement of industry in a specific area, thus generating employment opportunities in local areas.
Over the last decade, my government has taken a number of initiatives from skill building to improving higher education to providing right education and improving the employability of our youth. Just 10 years ago, in 2001 we had only 11 universities. Today, we have 41 universities.
I am happy to tell you that, while Gujarat provides nearly 72 per cent of the total employment, all the other states put together provide only 28 per cent. But we are aware that the flow of investment in Gujarat and global competition would require more skilled people in future.
(Interviewed by Sandeep Menezes)