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Corporate Jan 10, 2013

Vibrant Gujarat: Why is Modi secretive about pledged investments?

By Firstbiz Staff

Even as the Congress claims the past six Vibrant Gujarat Summits have not brought any concrete investment in the state, chif minister Narendra Modi remains undeterred. He is all set to address around 50,000 investors on Friday at the Vibrant Gujarat Summit, inviting them to set up shop in the state.

The six-day global trade show spreads over 1 lakh square metres and is being touted to receive a whopping 15 lakh visitors.

The sixth edition of Modi's prized summit is taking place at the Mahatma Mandir in Gandhinagar. According to the Modi administration, over 50,000 delegates from other states and 1,800 from more than 100 countries will attend the summit. Besides signing MoUs with investors, the Modi government is aiming at bringing the industry, local as well as global, foreign diplomats and government authorities from different states together on a never-before-seen common platform. However, this time around it has decided not to make public the numbers of deals signed or the amount of investment that will be pledged.

Modi addressing the audience on the eve of Vibrant Gujarat Summit 2012. Courtesy: VibrantGujarat2013 website.

Maheshwar Sahu, Principal Secretary, Industries Department of Gujarat, told CNN IBN, "We are not interested in lakhs and crores. Our only aim is that people should sign their intent to invest here and we will facilitate that."

According to a report in The Business Standard, this summit will also see the participation of the US India Business Council (USIBC) and the British High Commission as a partner. Twenty two Indian states, including some of which are governed by Congress, are also participating in the summit.

The report also said that top industry captains, including the Ambani brothers are expected on the inaugural session on January 11. The newly-appointed Tata Sons Chairman Cyrus Mistry could be present too.

Howver, not everything seems to be going well for the Vibrant Gujarat summit. Only about 15 percent of the total investment pledged during the first four summits actually materialised. There has been a steady dip in the commissioning of large scale projects of over Rs 10 crore in the past few years. While in 2005, a phenomenal 422 projects worth 16,500 crore began commercial production, the number dipped to 75 projects in 2011.

Another DNA report points out that "40% projects, for which MoUs were signed at Vibrant Gujarat Summits from 2003 to 2011, have been commissioned as of December 2012, more than 20% projects have failed to fructify and have been shelved."

The Congress says not only has fresh investment slowed down since the first version of the summit, employment generation too has been sliding. GPCC President Arjun Modhvadia said, "As of today, there has been a 70 per cent decline in projects being commissioned as compared to 1995. Modi is a master at creating a lot of noise."

by Firstbiz Staff

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