As Madhya Pradesh gets ready to roll out the red carpet for investors at yet another global investors summit (GIS), the focus is again on the quantum of investment proposals as actual investment has been low from past summits.
Of 2,357 MoUs signed at the four summits since 2007, only 92 projects have been commissioned while more than 1,728 are under various stages of implementation and the rest 537 have been cancelled.
While officials blame the cancellations, especially in mining sector, on environmental clearances, there have been several instances where investors were either not serious or capable enough to set up industry or the government failed to provide a conducive atmosphere.
Assocham not impressed
Assocham in its August report said majority of the new investments were yet to take off and the new investments dipped by 14% in the last fiscal.
About 86.5% of new investment commitments that was announced in 2015-16 were still at an announcement stage, it said.
The industry body said there were at least 87 projects which were facing a delay of average 57 months. Besides, cost of 57 projects shot up by 35% due to delay.
Experts say that rate of implementation is slow as ground realities are different from presentations made during the summit.
“At times, the ground realities in terms of industrial infrastructure do not match the promises made while signing the agreement,” Pithampur industry association president Gautam Kothari said, noting that there were delays in approvals as well.
In a study titled ‘Analysis of Madhya Pradesh: Economy, Infrastructure & Investment’, Assocham said, “Poor physical and social infrastructure development has demotivated private sector participation and led to a dismal show in the state’s performance on the investment front.”
Industrialist and former chairman of CII’s MP council, Girish Mangla said changes in global economic environment force companies to pull out after making a commitment.
“This time, the scenario could be different as the government has signed many agreements before the investors’ summit,” he said.
Chouhan wants action
Irked over the number of complaints from investors over bureaucracy’s attitude, chief minister Shivraj Singh Chouhan pulled up industry department officials during a review meeting last month and asked them to make the single window system more effective.
The CM’s ire is understandable. For, nothing much is happening on the ground, though the government continues to present a rosy picture on investment proposals and real investments.
To deflect criticism, the state government has been inviting “intention to invest” proposals online ahead of the GIS and has also finalized some big investment proposals before the summit. These include agreements with Micromax mobile, ZF Steering Gear, Motherson Sumi, and Patanjali group besides land allocation to Cadila Pharma.
The government has shifted its focus to ease of doing business and is trying to improve its ranking. Experts feel the state has to do a lot in this regard.
They said an investor before investing likes to know how easier it is to start an enterprise in the state, how he or she can get all the clearances; how the commercial disputes could be resolved easily, how easier it is to get electricity connection, how easier it is for him to make payment of taxes, how law enforcing agencies would extend help to him in case of any crisis, etc.
On the flip side, at the 2014 summit, industry leaders had praised the state government for making investment possible at a time when an uncertain economic scenario prevailed across the world.
They had said it was possible only because of the pro-activeness, positive mindset and vision of the state government and its leadership.
As per official data, about Rs 4.37 lakh crore worth investment proposals are under implementation.
This year, the government has invited 3,500 delegates including investors and ambassadors from 25 countries for the two-day event that kicks off on October 22.
While the quantum of fresh investment that the state will attract during GIS 2016 is anybody’s guess, the state government is hopeful of improving its record of project implementation this year.
EXPECTATIONS AND REALITIES OF THE SUMMIT
Single table concept in the state
Immediate decisions are taken by CM and minister for industries every Monday on the basis of deliberations between the investors and the higher officers
Wide possibility of investment in tourism sector. Tourism cabinet constituted
Madhya Pradesh is no more a BIMARU state and now is a progressive state now
MP is leading in many areas
MP is one of leading states in infrastructure
Road, electricity and water sufficiently available
A sum of Rs 75,000 crore to be spent on urban development in the next 3 years
Better law and order situation in comparison to the past
MP is the first state to complete a river linking project
Policies changed for facility to investors and single window system put in the place
Public Service Guarantee Act in place
Time limit set for delivering different services and there is a provision of penalty for delay. Textile industry from Punjab is shifting to Madhya Pradesh because of industry-friendly environment
Present leadership is investors-friendly
Chouhan is not only a chief minister but CEO too
Industrial development is govt’s highest priority and focus is on major as well as small and cottage industries
Land bank of 25,000 hectare govt land maintained
More than 15,000 hectare land developed for MSMEs
MP to have its own start-up policy
INVESTORS SUMMITS IN NUTSHELL
2,357 Total MoUs signed
537 MoUs cancelled
1,728 Projects under implementation
92 Projects commissioned
Investments proposed: Rs 10.82 lakh crore
Projects commissioned: Rs 47,492 crore
Projects under implementation: Rs 4.37 lakh crore