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Make in Maharashtra: Conversion rate of MoU’s into reality less than 50%, says data

Of the nearly 800 companies that had promised to set up new units in the industrial estates of Pune two years ago under the Make in Maharashtra initiative, only 175 have finished the construction of plants, while 284 have just started production.

pune Updated: Feb 27, 2018 14:44 IST
Parth Welankar
Parth Welankar
Hindustan Times, Pune
make in maharashtra,magnetic maharashtra,devendra fadnavis
Dignitaries during an MoU signing ceremony at Magnetic Maharashtra Convergence Summit 2018, in Mumbai on Tuesday.(PTI File Photo)

According to figures released by the Directorate of Industries in 2017, of the nearly 800 companies that had promised to set up new units in the industrial estates of Pune two years ago under the Make in Maharashtra initiative, only 175 have finished the construction of plants while 284 have just started production. This is a cause for concern as the city has received a significant amount of investment on paper at the recently concluded ‘Magnetic Maharashstra: Convergence Summit’, which would go in vain if not implemented efficiently.

Though figures released by the Directorate of Industries show that Pune is far ahead of other districts in converting the promises into actual investments, in reality, the conversion of the memoranda of understanding (MoUs) amounts to less than 50 per cent every year.

On the investments that will flow in to the Pune wing of Maharashtra Industrial Development Corporation (MIDC) following the Magnetic Maharashtra Summit 2018, an MIDC official, on the condition of anonymity, said, “Less than 50 per cent of the investments are actually converted into reality every year. The cost of the land given to companies might come in but it is merely around 10 to 15 percent of the total investment. This is followed by a prolonged process of converting the investments into reality.”

This year, of the 4,106 MoUs signed during the recently concluded ‘Magnetic Maharashstra: Convergence Summit’, 278 MoUs worth ₹5,233 crore have been proposed in various industrial estates in Pune district.

When questioned on how many of these MoUs will translate into actual investments, Fadnavis said, “The state had realised 63% of the 2,984 MoUs it signed during the Make in India week in Mumbai in February 2016. We would better this strike rate to implement all the investment committed at the Magnetic Maharashtra summit,” he added.

Anant Sardeshmukh, director general of the Maharashtra Chamber of Commerce Industries and Agriculture (MCCIA) said, “The number of MoUs that were signed in the Magnetic Maharashtra Summit is indeed commendable. However, signing MoUs is just not enough as converting them into reality is the more difficult task. It needs lot of effort and follow up with the companies which have signed the MoUs.”

However, the figures released by the Directorate of Industries show that Pune is far ahead of other districts in converting the promises into actual investments. According to the report, Pune district leads the way in competition in terms of realisation of MoUs signed with the state government during the Make in India week in 2016.

As a part of foreign direct investment (FDI), 16 companies had signed MoUs worth ₹3,771.14 crore between October 2014 and October 2017.

Maharashtra signed 4,106 memorandums of understanding (MoUs) involving an investment of more than ₹12.10 lakh crore during the three-day Magnetic Maharashtra global investor’s summit, chief minister Devendra Fadnavis announced at the valedictory press conference of the business conclave.

However, launching a scathing attack on the chief minister and the government of Maharashtra, former chief minister Prithiviraj Chavan said, “Due to poor vision and planning of the Bharatiya Janata Party (BJP)-led government, instead of Maharashtra, many industries are going to Gujarat for investment. Prime Minister Narendra Modi is shifting the projects to Gujarat and the chief minister did not dare to question him over the issue.” The economic and industrial growth rate of Maharashtra came down in the last four years, he added.

First Published: Feb 27, 2018 14:43 IST