Ahmedabad: What do Jamnagar, Surat, Bharuch, Kutch and Vadodara have in common? These five districts in Gujarat are the popular destinations of Indian corporations when it comes to investment.
According to a recent state government study, these five of the total 25 districts account for more than 80% of the large projects commissioned in the state through 1 September 2007.
Red-hot: Production at an Essar Steel plant in Hazira. The Jamnagar, Surat, Bharuch, Vadodara and Kutch districts lead in terms of both large projects commissioned and those being implemented.
Jamnagar accounts for 26% of large projects commissioned in the western state, followed by Surat (20%), Bharuch (17%), Kutch (9%) and Vadodara (8%).
Jamnagar has attracted investments worth Rs37,607 crore; Surat Rs28,648 crore, Bharuch Rs24,894 crore, Kutch Rs13,459 crore and Baroda Rs11,580 crore.
These districts lead the pack not only in terms of number of large projects commissioned, but also in projects under implementation. And once all projects in the pipeline are implemented, Kutch will surge ahead of other four districts. It has projects worth Rs74,688 crore in the pipeline.
Bharuch has projects worth Rs38,200 crore under implementation; Surat Rs25,220 crore; Jamnagar Rs14,601 crore and Vadodara Rs4,668 crore.
Known for diamond and textiles businesses, Surat in south Gujarat has been a traditional industrial centre. ABG Shipping Ltd, Essar Steel Ltd, Essar Power Ltd, Royal Dutch Shell Ltd, Larsen and Toubro Ltd (L&T), Reliance Industries Ltd (RIL) and NTPC Ltd are all based at Hazira in Surat.
Arvind Kapadia, president of South Gujarat Chamber of Commerce and Industry, attributes industrial peace and easy access to Surat’s success in attracting large industrial houses to set base there.
Surat is located midway between Mumbai and Ahmedabad and also on NH8 that connects Mumbai to Delhi. “Good road and rail connectivity makes transportation of raw material and finished products easy and it makes economic sense to locate industrial units in Surat,” says Kapadia. Shell’s liquefied natural gas (LNG) terminal at Hazira is now doubling up its capacity from 5 million tonnes and L&T is setting up a shipbuilding yard here.
Bharuch forms part of the so-called “golden corridor” for industry that lies between Vapi town on Maharashtra-Gujarat border to Mehsana in north Gujarat. Dahej, an industrial town in Bharuch, boasts of India’s first LNG terminal Petronet LN‘Developed regions continue to recieve more investment and in turn grow faster.’G Ltd. The existing capacity of Dahej LNG terminal is being raised from 5mt to over 12.5mt.
Besides, a Rs13,500 crore integrated petrochemical complex is being set up by ONGC Petro-additions Ltd. And a multipurpose cargo port is being built—a joint venture between Petronet LNG and the Adani Group.
Boroda houses Gujarat State Fertilizers Corp. Ltd, Gujarat Alkalies and Chemicals Ltd, Gujarat Industries Power Co. Ltd among others. “Like Surat, Bharuch and Ahmedabad, Baroda, too, is well connected both by road and railways. This is one of the key reasons behind these places turning into industrial hubs,” points out a senior official in state industries department.
Jamnagar, in contrast, is located in one of the most backward industrial regions, Saurashtra. Known as the refining capital of India, it houses two of the biggest refineries—RIL’s 33mt petroleum refinery and 12mt refinery of Essar Oil Ltd.
The district that has seen the biggest surge in investment in recent times is Kutch. Kutch was a vast stretch of barren land with little industry except salt units and Kandla Port, developed as an alternative to Karachi Port that went to Pakistan post-partition.
What swung the fortunes in Kutch’s favour was the earthquake of 2001. Both Union and state governments announced a series of financial incentives in the wake of the natural disaster and a host of companies rushed to this district to set shop. The new port of Mundra also added to the advantage of the industrial units for transporting raw materials and finished goods. Kutch refines over 60% of India’s edible oil and has many steel pipe-making units, tiles and cement units. The commissioning of the power project by Gujarat Mineral Development Corp. Ltd at Akrimota here is also helping the cause of industry.
According to T.T. Rammohan, a professor at the Indian Institute of Management in Ahmedabad, this is a reflection of skewed development. “We could find a similar pattern of investment in India and it may well be that five or six states are cornering the major share of investments.”
This is partly understandable as industrial development happens in clusters and they continue to receive more investment and growth. This, he says, leads to a vicious circle wherein developed regions continue to receive more investment and in turn grow faster. Earlier, fiscal sops were extended by way of backward area development to bridge the gap and decrease disparity.