Narendra Modi’s corporate pals didn’t keep Vibrant pledges

Guess who is spoiling chief minister Narendra Modi's Vibrant Gujarat report card? It is not the Opposition Congress or the media, but the large corporates - many of who are close friends of the chief minister —  that have failed to make good on the investment promises made by them while signing MoUs during Vibrant Gujarat Summits from 2003 to 2011.

MoUs proposing investment of a staggering Rs18.77 lakh crore were signed at the biennial event from 2003 to 2009. However, investments worth only Rs2.88 lakh crore, i.e. 15.35%, have materialised so far. In 2011, MoUs proposing investment worth Rs20.83 lakh crore were signed, while actual investment has been Rs29,815 crore.

A success rate of just over 15% is mainly because the big industrial houses, which are alleged to have benefited the most under Modi's rule, have fared poorly in implementation of MoUs.   

Take for instance, the Anil Ambani Group, which had signed MoU for a Rs35,000 crore power project. However, the project is yet to take off. In all, the younger Ambani had announced investments of Rs50,000 crore for Gujarat, of which a very small portion has been invested so far.

The Hindustan Construction Company had signed MoU to invest Rs40,000 crore to create a Lavasa-like city in the state at the 2009 Vibrant Gujarat Summit. Little progress was achieved, and two years later, the company again signed a MoU for the same project, proposing similar investment.

Country's richest man, Mukesh Ambani had announced Rs50,000 crore investment at its Jamnagar refinery, while billionaire Gautam Adani announced investment of more than Rs80,000 crore in port, power generation and infrastructure.

Details of exact investments made by Reliance and Adani Groups were not available, but a senior official accepted that it is much lower than the mind-boggling amounts announced.

Experts say that lower realization of investment when compared with the announcements could be due to window dressing, i.e. due to companies making inflated investment commitments.

"It is possible that there is some kind of window dressing in the case of many MoUs," Abraham Koshy, Prof of Marketing at IIM-A, said. However, he added that Gujarat had managed to create a niche for itself as an attractive investment destination because of the Vibrant Gujarat Summits.

Prof Ravindra Dholakia of IIM-A, however, attributed the lower conversion rate of MoUs into actual investment to the long gestation period of mega projects.

"It is normal for a mega project to require at least seven to eight years to take shape. Considering this, it would be premature to gauge the success of MoUs signed at Vibrant Gujarat 2007 and later editions at this point of time," Prof Dholakia said, adding that the number of projects withdrawn also needs to be considered. There are a host of other corporates and industry bigwigs, including some of the country's biggest names, who have also faltered in meeting their commitment.

After the Godhra taint, the biggest allegation against the chief minister is that he has been favouring industrial houses at the cost of state's resources. But, as far as the success of Vibrant Gujarat Summits is concerned, these very industrialists seem to have failed the number one chief minister!!