The growth rate of new investments in Madhya Pradesh has declined to almost 83% in the 2013-14. The decline in MP is more than the nation’s average decline rate of new investments. This was stated in the Associated Chambers of Commerce and Industry of India (ASSOCHAM)’s study—Impact of delay in investment implementation—released on Wednesday.
Assocham secretary general DS Rawat said, "In 2005-06, MP had registered positive investment growth rate of about 130% but in 2013-14, investment growth rate reduced to 82.9%. The implementation of investment is poor in the state as the state government has not established any monitoring cell to evaluate the performances of projects."
According to the study, about 399 projects worth Rs 3.37 lakh crore are in the under implementation stage. About 62% under implemented projects belongs to the power sector followed by services with 13.1% and manufacturing sector with 11.8%.
Rawat said, "Due to long delay in implementation, the cost of projects rose by Rs 96.7 thousand crore i.e., about 26.9%. The manifold regulatory is the major reason behind delay in investment project. Delay in land acquisition, environment clearance, skilled labour force, lack of finances and site handover are the other factors which affect implementation of projects."
Another major concern, which was raised after the study, is decline in share of irrigation sector in overall investments from 18.3% in 2004-05 to 6% in 2013-14.
Share of manufacturing sector has declined from 33.8 % in 2004-05 to 19.1% in 2013-14.
Rawat said the analysis indicates that state’s economy is largely dependent on agriculture and allied activities, which contribute 29.0% to GSDP.
But this is not a good sign as agriculture growth never generates employment in the state and the sector’s production will get affected by any changes in the climatic conditions or monsoon.
"Industry and services play important role in economic growth and development. These sectors also increase jobs possibilities in the state. In the state GSDP, industry sector contributes 24.3% and service sector contributes 45.4%. Both sectors contribute more to nation as compared to state," Rawat added.
"Just to sign MOU is not enough to robust industries in the state; there is instant need of establishing monitoring cell so that the work of projects could be reviewed from time to time," Rawat added.