MP govt tries to improve FDI flow through roadshows, infra boost

Roadshows by chief minister Shivraj Singh Chouhan abroad are seen as consistent attempts to improve the declining curve of foreign investment Madhya Pradesh has received from the Global investment Summits since 2012.

Roadshows by chief minister Shivraj Singh Chouhan abroad are seen as consistent attempts to improve the declining curve of foreign investment Madhya Pradesh has received from the Global investment Summits since 2012.

The government has declared to develop infrastructure on 1,200 acre land in Pithampur at an estimated cost of about Rs 360 crore. (HT file)

To set the ball rolling, the state government has declared to develop infrastructure on a 1,200 acre land in Pithampur at an estimated cost of about `360 crore. “We will be opening booking of plots during the GIS. Both foreign and domestic investors will be eligible to apply,” Audyogik Kendra Vikas Nigam (AKVN) Indore managing director Kumar Purushottam said.

Over the three financial years, the state had attracted FDI of Rs 708 crore (US $119 million), Rs 601 crore ($100 million) and Rs 518 crore ($80 million) in 2013-14, 2014-15 and 2015-16 respectively. As a percentage of total investment inflows to Madhya Pradesh in the past four years, the FDI inflow is only about 0.8%.

To reverse this trend, the state government had tried to emulate Rajasthan’s model of setting up exclusive industrial zones for Japanese and South Korean companies in Alwar district, also involving Chinese investors in MP in 2015. The government had also organised an investment seminar in Indore earlier this year for Japanese companies with the help of Japan External Trade Organisation (JETRO). However, the response remained lukewarm so far despite a slew of concessions announced by the government as the proposed site remains undeveloped.

The Confederation of Indian Industry (CII) is of the opinion that infrastructure development will help the state bag foreign investments. “The key will be development of social and other infrastructure such as shopping complexes, schools and health centres,” former CII state council chairman Girish Mangla said.

The state government has blamed economic slowdown and other commercial factors for foreign investors shying away from MP. “We have big projects in the pipeline. The state government has come out with a policy for defence sector and we are confident that it would attract foreign companies in future,” a state industry department official said.

Industry experts, however, remain sceptical. “Foreign investors look at multiple factors including world-class infrastructure and logistics. The SEZs have failed to take off in the state and this is one indication that MP is not a very attractive destination except for companies in pharmaceutical sector,” Dewas Industry Association president Ashok Khandelia said.