Madhya Pradesh will kick off its fourth edition of the Global Investors' Summit (GIS) on Wednesday, hoping to showcase its scorching economic growth to attract billions of dollars in big-ticket projects from industry heavy hitters such as the Ambanis, Adanis and Tatas.
Over the next three days, the government will seek to highlight the state's industry-friendly policies and fast-improving infrastructure to lure both domestic and overseas investors to a wide array of sectors, including agro industry, autos, IT/ITeS, textile and pharmaceuticals.
Prime Minister Narendra Modi is expected to speak at the biennial event on Thursday, in what is seen as an endorsement of the state’s claim of being an attractive destination for investments. It could also help encourage businesses and corporations to consider investing in the state more actively.
Top names in Indian business such as Mukesh and Anil Ambani, Cyrus Mistry, YC Deveshwar and Gautam Adani, among others, have confirmed their participation. Six countries, including Canada, Australia and South Africa will be partner-nations at the event. Ambassadors from 21 countries are also expected to be present on Wednesday.
On Wednesday, extensive sessions are planned on Medium, Small and Micro Enterprises in which representatives from Canada, Czech Republic, Mexico and Peru will participate.
Madhya Pradesh has averaged over 10% growth in the past three years, spiraling to 11.08% in 2013-14 even as the national rate has plummeted.
But private investment has hardly kept pace with the state’s economic expansion.
From the past three summits, more than 35% of the memoranda of understanding (MoUs) were cancelled, although some gains were made in the power sector.
While the state government attributed some of these cancellations to the lack of environment and forest ministry clearances, many investment promises fell through because investors were either not serious or were unconvinced about the state’s potential. Sometimes, an economic slowdown was blamed.
The government says the focus should be on the real investment coming through after the investors’ summit.
"Comparing how many MoUs were signed and how many were cancelled is irrelevant. You have to see that a GIS took place and what was the quantum of investment that came. That is relevant," said state chief secretary Anthony DeSa.
But businesses and industry feel that the government machinery needs to be overhauled if the state were to attract big-ticket investments.
Pithampur Industry Association president Gautam Kothari said, "There are instances where the investors fail to get the land or the mines or face some other difficulties during the implementation process. So, ground realities should match the promises made to investors at the time of signing of agreement."
According to a recent Assocham report, of about 399 investment projects that are under different stages of implementation in the state, about 224 have recorded either a time overrun or cost escalation.
The state’s record in attracting foreign investors has also been quite dismal.
Even so, officials are hopeful of turning a new corner with about 500 foreign delegates set to attend the summit this year.
On the flip side, during the last investment summit in 2012, business leaders had praised the state government for making investment possible at a time when an uncertain economic scenario prevailed the world-over, saying that had become possible only because of the pro-activeness, positive mindset, conviction and vision of the state government and its leadership.
Taking cognisance of the controversy arising out of cancelled MoUs in the past investor summits, the state government has decided to focus more on holding parallel seminars on investment opportunities in different sectors in this year’s summit.
The government has so far given contradictory estimates of investment proposals. It plans to release the figures of actual investments received from the previous investor summits on Wednesday.
Chief minister Shivraj Singh Chouhan said last month that Madhya Pradesh had received Rs 1.20 lakh crore investment out of about Rs 2 lakh crore proposals made during 2012 Global Investors Summit. However, talking to reporters on Sunday, state industry commissioner V L Kantha Rao said that actual investments of about Rs 70,000 crore had materialized from the 2012 summit.
A recent government document stated that out of 1,751 investment proposals worth Rs 11.06 lakh crore received between 2005 and 2012, work had been completed on 236 investment proposals worth Rs 1.06 lakh crores, while 1,281 proposals worth Rs 6.09 lakh crore were under various stages of implementation. What has been left unsaid is that 234 proposals worth about Rs 3.90 lakh crores had been cancelled. In rupee terms, it means that 35% of proposals received between 2005 and 2012 were cancelled. However, figures available at MP Trade and Investment Facilitation Corporation (TRIFAC) website tell a different story altogether.