Modi positions investment meet along Davos lines

Modi positions investment meet along Davos lines

Ahmedabad: Gujarat’s chief minister Narendra Modi will once again promote the western state as the best investment destination in India when its capital Gandhinagar hosts hundreds of investors at the fifth edition of the Vibrant Gujarat Global Investors’ Summit next month.

Japan and Canada are partner countries for the 12-13 January business meet, where participants are expected to arrive from 80 countries and a dozen Indian states.

The summit is being modelled on the World Economic Forum at Davos, Switzerland, where business and political leaders from around the world meet annually.

Traditionally a business-friendly state, Gujarat saw companies shying away in the early years of this decade following an earthquake in 2001 and communal riots in 2002. Modi launched the first edition of Vibrant Gujarat in 2003 hoping to revive investor confidence.

The last edition was held in January 2009, against the backdrop of the global economic slowdown. Despite the credit crunch, business pacts, also known as memoranda of understanding (MoUs), worth 12.4 trillion—more than India’s gross fixed capital formation of 11.4 trillion in the first half of the current fiscal—were signed. This was nearly double the investment commitment of 6.5 trillion at the previous three summits put together.

Some of the bigger investors at the 2009 summit included Universal Success Group (Rs 1 trillion), Hindustan Construction Co. Ltd (Rs 40,000 crore), Adani Group Ltd (Rs 30,000 crore), Vadodara-based Sandesara Group (Rs 30,000 crore), Sabeer Bhatia of Hotmail fame (Rs 30,000 crore) and former vigilance commissioner N. Vittal-chaired Gujarat Vittal Innovation City Ltd (Rs 11,300 crore).

In all, MoUs for 1,653 large projects were signed at Vibrant Gujarat 2009. Of these, 627 projects involving an investment of 2.44 trillion are under various stages of implementation, while 867 projects worth more than 8.5 trillion are yet to take off, according to data available with the state government.

Around 132 large projects worth 81,308 crore have been commissioned, of which the total investment flow until 1 October this year has been 21,412 crore. The remaining projects have been dropped.

“The government calculates the success of the summit based on the commissioned project. And data shows 25% success," said a senior state government official, requesting anonymity.

The official said the figure was quite healthy. Modi is planning to go beyond MoUs this time around as the conversion rate of investment proposals is not encouraging, said an industry watcher, requesting anonymity.

Reliance-Anil Dhirubhai Ambani Group chairman Anil Ambani and Bharti Enterprises Ltd chief executive and chairman Sunil Mittal had said at the 2009 summit, held just months ahead of parliamentary elections, that they wanted to see Modi as India’s future Prime Minister.

In the previous summit held in 2007, Tata group chairman Ratan Tata said: “It is foolish if you are not in Gujarat." Less than two years later, protests against land acquisition forced Tata Motors Ltd to shift its facility to manufacture the world’s cheapest car, the Nano, from Singur in West Bengal to Sanand in Gujarat.

The 2011 summit will focus on the power, pharmaceuticals, oil and gas, ports, cement, chemicals and education sectors. The state is planning a 50-100 crore fund for educational institutions in Gujarat.

A special venue known as Mahatma Mandir is being readied in Gandhinagar at a cost of 100 crore. Washington-based lobbying firm Apco Worldwide has been hired to help the state on the road show, especially with international investors.

The United Nations Industrial Development Organization, the Commonwealth Business Council and the Confederation of Indian Industry will be present at the summit. An international buyer-seller meet, involving trade bodies such as the Pharmaceuticals Export Promotion Council and the Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council will also be held alongside.

In all, 36 events and seminars will be held at the summit and in its run-up. Seminar topics range from emerging geographies to urbanization. There will be a young entrepreneurs’ meet, an innovation summit, an Indian Institutes of Technology conclave and an Indian Institutes of Management conclave. PricewaterhouseCoopers Llp is the so-called knowledge partner for the summit.

“If Sri Lanka wants to invest in Nepal, they can come to Gujarat to commit to one another. We will provide a platform for the whole globe in the next summit," Modi had said at the 2009 summit.

The government will also introduce financial services as an investment attraction for the first time.

“Over a period of time, the chief minister aims to have one-third investment into agriculture, one-third into industries and an equal number in services," said the senior government official quoted above.

The biennial meet is complemented by policy changes to facilitate investment. For instance, in a bid to encourage them to part with their land for industrial development, the state recently formulated a new land acquisition policy that makes farmers partners in development.