A national survey has adjudged Jharkhand the worst state in India for fresh investments hardly a year after a World Bank report rated it as the third best for ease of doing business only behind Gujarat and Andhra Pradesh.
The State Investment Potential Index 2016, released recently by the National Council for Applied Economics and Research (NCAER), judged all 29 states and Delhi Union Territory on the basis of parameters such as labour and infrastructure conditions, economic conditions, governance, political stability, and industry perceptions.
Gujarat had topped the list in the World Bank survey for ease of doing business released last year, and still sticks to the first position in the NCAER survey. However, Jharkhand despite impetus on industrial growth and foreign investments has dipped from position three in the former report to last in the latest survey.
Jharkhand chief secretary Rajiv Gauba took a jab at the survey results saying it was based on perceptions and theory rather than the ground reality.
“How can a state which accounts for more than 40% of country’s mineral reserves be potentially poor for investments?” he asked, adding “with due respect to the surveyors, I think it is more theoretical than practical. Ideally, they should have paid a visit here and seen the developments that have happened in the past one year,” said Gauba. The mineral-rich state has been trying hard to lure investors since the pro-industry Bharatiya Janata Party (BJP) government came to power here in December 2014. However, difficulty in land acquisition, poor road connectivity, deteriorating law and order situation, and lack of facilities for small scale investors have been hurdles in the state’s industrial aspirations, claim experts.
“Deteriorating law and order, lack of land availability and poor history of MoUs are making investors shy away from investing here. I think there is nothing wrong with the survey,” said renowned economist Ramesh Sharan.
During the Arjun Munda-led BJP government in 2012, the state had signed at least 70 MoUs worth about 1.45 lakh crores. However, about 32 of the 70 MoUs were cancelled later, industry sources said. A majority of the deals cancelled were from the power and steel sector, sources said.
“The report reflects the actual state of affairs here. We do not have surplus power, skilled labour or suitable infrastructure. Only minerals will not help any cause,” said Pradip Jain, director, Federation of Jharkhand Chamber of Industries and Commerce (FJCCI).
In the lines of the Vibrant Gujarat, Jharkhand too is planning an international investors’ meet later this year. It has already held a food processing investors’ summit and signed at least 10 MoUs with national and multinational companies.
Last October, an ASSOCHAM report too had said that investments in Jharkhand had dipped by 65% in the past ten years. It further bashed the state for failing to increase its contribution towards the national Gross Domestic Product (GDP).
The investment in the state has fallen from Rs.1 lakh crore in 2005-06 to 33,000 crore in 2014-15, when the BJP was already in power here, according to the report.