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Lack of infrastructure hampered investment

FOR THE industries in the region, especially medium and big industries in the State?s biggest industrial hub of Pithampur including the Greenfield project Special Economic Zone (SEZ) coming up there, the year 2005 was just another year without any major events of infrastructure development or huge investments, thanks largely to the instability in State Government and the resultant bureaucratic inertia.

india Updated: Jan 03, 2006 00:09 IST

FOR THE industries in the region, especially medium and big industries in the State’s biggest industrial hub of Pithampur including the Greenfield project Special Economic Zone (SEZ) coming up there, the year 2005 was just another year without any major events of infrastructure development or huge investments, thanks largely to the instability in State Government and the resultant bureaucratic inertia.

When the Bharatiya Janata Party (BJP) formed the government in the State two years back, there were expectations in the industrial corridors that there would be some changes in the priorities of the State Government. Though many MoUs (memorandum of understanding) were signed during the 10-year tenure of Congress government led by former chief minister Digvijay Singh, it simply did not materialise into implementation.

The BJP had made several promises during the Assembly elections. Apart from a clean and transparent government, the BJP had also promised an investor-friendly industrial policy to give boost to the sagging industrial development in the State. It was music to the ears of the industry as it has been crying coarse for years for quality infrastructure in the State to match that of the neighboring states like Gujarat and Maharashtra, if not that of Haryana and Punjab to
attract the investors.

Much water has flowed down the river Narmada since then, but the industrial scenario in the State still remains the same.

In fact, in the beginning of the BJP rule, an over-zealous Uma Bharti took some positive steps in this direction and announced an investor-friendly industrial policy. Though there were several positive aspects in the policy, the industrial investments were far and few during the last year, thanks to the lackadaisical attitude of the government and the bureaucracy towards industrial promotion.

The major reason for the slump in investments and infrastructure development during last the year was due to the instable character of the State Government. Though the BJP had record majority in the Assembly, Babulal Gaur was never seen comfortable in his chair. Frequent rumours about leadership change changed priorities and direction of the government.

The instability and uncertainty in the government had its echo in the bureaucracy, affecting the implementation of policies.

There was no dearth of announcements or signing of memorandums of understandings (MoUs) last year. The Chief Minister had made several trips to foreign countries like Malaysia, Singapore, Dubai, USA and England to showcase Madhya Pradesh as a good investment destination.

The Chief Minister announced several times that there would be investment worth more than Rs 50,000 crore in the State. But so far, all these announcements have proved to be just lip service.

The State Government’s claims of investment of over Rs 50,000 crores to the State notwithstanding, the Foreign Direct Investment in the region has been as good as nil. On the infrastructure sector, things are not rosy with no sign of infrastructure development in the region. For any big investment, there are two prerequisites—a conducive government policy and a good infrastructure.

Even if, for an argument, the government policies are taken as conducive for investments, there is lack of infrastructure like good connecting roads, rail facility, enough water, etc in the region.

Believe it that the biggest industrial growth centre in the State is not connected with rail network. The condition of Indore-Ratlam and Indore-Jhabua road is the less said the better. These roads are important in industrial point of view as these are connecting roads for ferrying the goods to ports and railway stations.

The housing sector is much worse as the workforce in Pithampur and Kheda are forced to settle in Indore, traversing a long distance daily. Still, there is no planning on this front. Situation will become grave once the SEZ is made fully operational as there will be an added load of more than 50,000 workforce.

The main reason for the lack of interest among the investors is the lack of infrastructure development for which the government has not shown any enthusiasm so far.

The story of Greenfield project SEZ coming up in Pithampur is a glaring example of the government’s apathy towards infrastructure development as it has miserably failed to find a strategic partner for developing the more than 1,000 acres of land worth more than Rs 1000 crore.

As the government is not in a position to arrange such a large sum, the government should have shown some urgency to find a strategic partner for this purpose. There are rumours among the industries that there are some vested interests in Madhya Pradesh State Industrial Development Corporation (MPSIDC) who are not interested in handing over this ‘goldmine’ to any private agency so soon.

The role of AKVN, the government agency for infrastructure development in the industrial growth centres, was not praiseworthy in providing a conducive atmosphere in industrial growth centres. In fact, the agency is on the verge of a fund crisis due to the interference of its holding company MPSIDC. Frequent changing of its managing director also affected the working of the agency.