Why indusries don't want to come to MP

NK SINGH

One of the endearing images of the Global Investment Summit at Indore in 2014 was the electrifying speech made by the founder of the Jaypee group, Jaiprakash Gaur, at the fag end of the conference attended by 7,000 persons. 

The octogenarian doyen of the industry captivated his audience by narrating his fascinating rags to riches story, the mesmerising story of the rise of a lowly irrigation department overseer as head of one of India’s biggest infrastructure conglomerate.

The wily businessman, ranked as the 48^th richest person in India by Forbes in 2010, shared details about his strong bonds with Madhya Pradesh and announced an investment of Rs 35,000 crore in the State. (Jaypee group enjoys excellent rapport with politicians and top bureaucrats of MP and UP.) 

The CEO and lesser mortals assembled for the event gave a standing ovation to Gaur.

There was a slight problem.

Gaur simply did not have any money. He certainly did not have Rs 35,000 crore. Fact is he did not have even Rs 35.

Even as he was making this announcement, his loss-making companies owed to the market about Rs 58,000 crore and were on a spree to sell their assets to save the sinking enterprise. Since then it has already sold a large chunk of its assets. Now its flagship company, Jaiprakash Associated Ltd, may change hands!

The Jaypee group was not the only one to make tall empty promises at the MP Government’s GIS. The list is huge. That has induced the opposition Congress party to allege that the GIS has become an opportunity for unscrupulous companies for buying land at throwaway prices.

Global investment summit

Starting in 2007, GIS has become a mega event in MP, organised at considerable cost to the state exchequer. The Chief Minister and his top officials trot the globe to invite investors. Lots of people turn up. The government machinery works round the clock to make it a success. Expenses are no consideration.

But it has turned out to be like a shopping mall that receives footfalls in hundreds, but few actual buyers.

Ever since the economy started opening up in mid 90s, the States have been scouting for investments. Politicians go abroad, meeting anyone who has a few dollars in his pocket. Bureaucrats have discovered a new opportunity for undertaking foreign junkets with tax payers’ money.

During Digvijay Singh’s regime once even journalists were included in an “investment” junket.

But the results are nowhere in sight. According to a recent study by Associated Chamber of Commerce and Industry, investment in MP actually declined by 14 per cent in 2015. An enormous 85 per cent of the 53,000 crore investment announced in 2015-16 remained on paper.

On the other hand, the farming sector has shown tremendous progress over the last decade, thanks to a host of subsidies provided by the state government.

MP has everything that an industry needs ---- a huge land bank, surplus power, plenty of water, and good connectivity. The Government is making equal efforts for both ---- the industry as well as agriculture.

Bureauucracy, a stumbling block

Then why does industrialisation lag behind?

Chief Minister Shivraj Singh Chouhan has revealed the reason. He told a meeting in 2016 that his government had created a single window for industries, but he discovered that multiple windows had opened in that single window!

The bureaucracy is the biggest stumbling block for investment in the state. Talk to any industrialist and he will tell you a horror story.

ITC chairman YC Deveshwar, one of India’s longest serving company bosses with two decades at the helms, told the last GIC publicly that his Rs 10,000 crore worth investment proposal could not take off in MP because they did not get the Promised Land even after three years.

Has the head of any bureaucrat rolled in ITC case?

Comparisons are a tricky business. In Narendra Modi’s Gujarat, an industrialist had to only drop a hint that he wanted to invest and he would get all clearances within a matter of days. Bureaucracy was made to facilitate, not obstruct.

I still remember Vibrant Gujarat investor’s summit that I covered as a journalist in 2007. Everyone was there, a virtual who-s-who of industry, with fulsome praise for the State and its Chief Minister who had come to be recognised for his CEO style of functioning.

Declared Ratan Tata, “You are stupid if you are not in Gujarat”. Gujarat had earned that remark because it had abolished all “windows”, and opened the road to prosperity.

The role model is there. MP has to just follow, if it means business.

Powers That Be, my column in DB Post of 23 Oct 2016.

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