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The fifth Vibrant Gujarat Summit (VGS) 2011, a biennial event initiated in 2003, was held on January12-13, 2011, at Mahatama Mandir, near Gandhinagar. Institutionalisation of various economic development-related promotional activities under the VGS represents an important innovation deserving much closer study both nationally and internationally.

Since its beginning in 2003, VGS has refined and broadened its aims and vision, particularly in moving beyond pro-actively encouraging investments and promoting Gujarat. The investment commitments have increased in successive VGSs. They were Rs0.66 lakh crore in 2003; Rs1 lakh crore in 2005; Rs4.6 lakh crore in 2007; Rs12.44 lakh crore in 2009; and estimated at Rs20.83 lakh crore in 2011.

Transformation of initial investment commitments into actual implementation and operations has, consistent with international experience, been much lower. The official estimates are that the proportion of projects announced during the 2007 and 2009 VGS that are being implemented is 40% and 60% respectively.

The cumulative figure of the investment flow resulting from the four previous VGSs is officially projected at $370 billion (Rs16.7 lakh crore). A rigorous assessment of this estimate is, however, not feasible without access to the methodology employed, and underlying data. Even with this caveat, Gujarat’s progress and growth performance over the last decade indirectly suggests that the cumulative investments generated by the VGS have been quantitatively and qualitatively significant.

An important feature of governance in Gujarat has been not to regard each VGS as a discrete event, but to integrate it in the broader governance philosophy and day to day administration.
The fifth VGS represents a new evolutionary phase as it has successfully initiated the process of establishing India as a global business, knowledge, technology acquisition and sharing hub.

A robust finding from the growth theory is that acquisition, adaptation and diffusion of knowledge embodied in human resources, capital and equipment, and in organisations and institutions is the primary factor contributing to sustained and broad-based high growth.

The thrust of the fifth VGS is thus consistent with the sophisticated theory of what makes countries grow in a balanced manner, and can therefore contribute significantly to realising the objective of an advanced India. The 21st century national and global challenges require best minds from diverse fields to regularly communicate with each other in a conducive atmosphere, and the VGS has established a track record to be considered one such global platform.

Several features of the fifth VGS lend credence to this assessment.

First, the fifth VGS enthusiastically provided opportunities to other states to promote business opportunities and investments in their states. The vision, therefore, is of VGS as an occasion for promoting India as a country, and not just the state of Gujarat. Such national vision is particularly welcome in the current over-politicised and partisan environment in which the core national interests are not always given due importance.

It is reported that 12 states, including Karnataka, Andhra Pradesh, Orissa, Madhya Pradesh, Chhattisgarh, and the Northeast states (whose further rapid integration with the rest of the country is a national imperative) took advantage of the fifth VGS to promote investments in their respective states.

The absence of Maharashtra, a neighboring state, with many complementarities with Gujarat, and of Rajasthan from the fifth VGS reflects poorly on the state leadership’s understanding of requirements for growth and on their vision.

Second, Japan and Canada were the partner countries for the fifth VGS, along with UNIDO (United Nations Industrial Development Organisation). Japan is arguably the most important strategic partner of India in Asia. Japan’s proficiency in manufacturing technology and practices, and energy efficiency of its economy, including its expertise in ecologically modern cities, is of vital interest to India. In addition, its assistance for India’s railways sector has been significant. This was the second successive VGS in which Japan was partner.

Canada is a resource-rich country, attempting to diversify its global linkages. Its relatively large physical size and comparatively small population (34 million in 2010) complement India’s needs as well, with many mutually beneficial cooperation opportunities.
During the fifth VGS, US, Australia, Rwanda and Mozambique were also officially represented. The remarks of Ron Somers, president of US-India business council, that the two countries could be knowledge partners suggest the potential for US to be a partner country for the next VGS.

The fifth VGS had representations from more than one third of the countries of the world, spanning several continents.

An important new dimension of the fifth VGS was the meetings and seminars of business, political, academic and other leaders to discuss global issues. The topics included solar energy, corporate responsibility and sustainable development and India’s growth trends and prospects.

The above represents a significant international presence and a good beginning in positioning India as a global business, knowledge and technology sharing hub.

Third, there were several novel and innovative initiatives announced during the fifth VGS. For example, the Gujarat Government and TeamLease Services, a private sector human resources firm, will be setting up India’s first vocational educational university, which will have 22 community colleges operating under it.

Projections by the United Nations show that India will need to generate productive livelihoods for 120 million persons, equivalent to 28% of the global total between 2010 and 2020, at an annual average of 12 million. No other country faces such a daunting challenge in generating livelihoods.

Despite this, the emphasis at the centre and in most states has remained on preserving existing jobs and livelihoods, even when they are no longer relevant, rather than on creating new livelihoods.

Providing skills, which are in demand in the economy and helping to bridge the gap between formal education and employability, will ease a major constraint in creating new livelihoods and empower all sections of the society to become self reliant rather than having an entitlement mentality.

Another example concerns the proposal for Asia’s first tidal power plant, with initial capacity of 50 mw. This will be a joint venture between Gujarat Power Corporation and a London-based marine energy developer. This proposal is consistent with India’s national objective of increasing the share of renewable energy in total energy.

Gujarat must aspire to improve its record in transforming initial commitments into operational projects. Greater focus on aspirational rather than entitlement politics could help generate even greater benefits to India from the VGS initiative.