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Foreign investment: Gujarat third most favourite

28-Aug-2012

 

Amid biz gloom, state still shines

Investment Proposals Of 85K Cr Drawn Since May

Ankur Jain | TNN 


Ahmedabad: While investments are squeezing and industries are shying away from expansion across the country, Gujarat seems to be driving in a different way. Data shows that the state has attracted maximum number of expansion and investment interest applications this year. In fact, till May this year, proposed investments in Gujarat has crossed Rs 85,000 crore, which is more than half of proposed investments last year. 
    In 2011, Rs 1.42 lakh crore worth of investment was proposed in the state. 
    However, 2012 doesn’t seem to be as rosy for other states, which have seen a sharp decline in their investments and number of applications for industrial 
licenses. States like Madhya Pradesh, Karnataka and West Bengal have seen the maximum decline in proposed investment and applications for fresh industrial licenses. 
    An industry body recently found that of the total 227 PPP projects worth over Rs 68,000 crore under oper
ation in India as of December 2011, Gujarat accounted for about 31 completed PPP projects worth over Rs 24,000 crore. The state has attracted the maximum investments in the power and manufacturing sectors. 
    “Investments in mining and manufacturing have contracted across the coun
try. However, Gujarat continues to attract investments in these sectors due to easy availability of land and power and professional running of state industry bodies, where political intervention is lesser compared to other states,” said Sebastian Morris, economics professor at Indian Institute of Management, Ahmedabad. 
    Morris, however, added that gross capital formation for the country has fallen drastically and one would have to watch closely the materialization of investments in the Gujarat. 
    An Assocham report titled ‘Investment & Growth Patterns’ said that the project implementation rate in Gujarat was way below the national average and was marginally ahead of Jharkhand. “Gujarat is lagging behind with 41.9 per cent project implementation rate, much below the national average of 53.9 per cent,” the report said. 
    Industry experts believe that the difference Gujarat brings on table compared to other states is the pro-active approach. “The response time for business queries is much lesser in Gujarat. The state has also has been able to modernize its infrastructure with time which makes it a stable place of investments both in manufacturing and services sectors,” said Chandrajit Banerjee, director general, CII. 

Foreign investment: Gujarat third most favourite 
    
With over 11 per cent share in the proposed foreign direct investment (FDI) in 2011-12, Gujarat has emerged as the third most favorite investment destination for overseas investors. An ASSOCHAM report released on Monday said that Gujarat got the second highest number of 131 FDI proposals attracting proposed investment worth Rs 20,258 crore during 2011-12. With over 27 per cent share, Odisha has emerged as the top investment destination followed by Andhra Pradesh for the period.