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made it clear that Gujarat is the state
where they want to be. Consider this:
the inaugural session of the investor
summit alone saw investment
announcements of around `1.96 lakh
crore by India Inc.
The largest investment was
announced by Ahmedabad-based
billionaire Gautam Adani, chairman
of the Adani Group, who said the
group would invest `80,000 crore in
the power, petroleum and port sectors.
Adani Group is planning to construct
two new ports at Hazira and Dholera
in Gujarat.
Anil Ambani, chairman of the
Reliance-Anil Dhirubhai Ambani
Group or R-ADAG, has committed to
investing `50,000 crore in the next
five years for setting up gas and
coal-based power projects and cement
plants at Kutch, Porbandar and
Junagadh in Gujarat.
Prashant Ruia, group chief executive
of the Essar Group of companies said
his group is looking to invest `30,000
crore in power, ports, water
infrastructure and for expansion of its
oil refinery at Vadinar. Gujarat.
AM Naik, chairman of Larsen &
Toubro Ltd, announced an investment
of `15,000 crore in infrastructure
projects. Ajit Gulabchand, chairman
of HCC Group, said HCC would
invest `12,000 crore to set up a
renewable energy park at its proposed
waterfront city at Dholera Special
Investment Region, being developed
on the lines of Lavasa.
Automobile manufacturer General
Motors also said it was investing
$100 million (`450 crore) to enhance
production capacity at its Halol plant
to 1,05,000 units annually from
85,000 units per year at present.
So, what is it that attracts domestic
and global investors to Gujarat?
Corporates say that speedy approvals
is one of the reasons why they are
investing in Gujarat.
“States usually take 90 days to 180
days to give clearances for land and
other issues. When we were in the
process of moving our Nano project
to Gujarat, the state government gave
us the clearances in just three days. It
has never happened before,” Ratan
Tata said in 2009 at the Vibrant
Gujarat Global Investors’ Summit
that is held every two years.
The Tata Group has already invested
`30,000 crore in the state and has said
it will continue to invest there.
Chanda Kochhar, the Managing
Director and Chief Executive Officer
of ICICI Bank agrees with Tata.
“What makes Gujarat so attractive is
that the state has reached double digit
growth rate for many years on a
sustainable basis,” she said at the
summit in January this year.
Companies say the investor-friendly
policy of the Gujarat government,
24/7 power supply, road connectivity,
availability of trained workforce,
large consumer base and a simple and
transparent procedure have lured
them to the state.
Through the state-owned Gujarat
Investment Corporation Ltd, the
government has in fact taken
initiatives to attract investors by
offering beneficial services such as
providing financial assistance to the
investors for diversifying, expanding
their business establishments and
offering different financial packages.
Interestingly, Jamnagar, Surat,
Bharuch, Kutch and Vadodara
districts in the state of Gujarat
account for more than 80% of the
large projects commissioned in the
state from 1st Sept ’07, according to a
state government study, which points
to a skewed development, where a
few districts corner a large share of
the investments.
Jamnagar accounts for 26% of the
large projects commissioned in the
state, Surat (20%), Bharuch (17%),
Kutch (9%) and Vadodara (8%). Each
of the districts has a different reason
for being popular investment
destinations in Gujarat.
Surat has always been an industrial
hub, Baruch is part of the golden
corridor for industry, Baroda is well
connected, Jamnagar is the refining
capital of India and Kutch has a lot of
free land available. This is, however,
typical of development patterns in
most states, where a few districts
attract maximum investment.
A 2009 report by Deutsche Bank said
Gujarat offers the best investment
potential among all the states and
union territories in the country,
measured on socio-economic and
infrastructure factors.
“It seems that economic development
and geographical proximity belong
together, possibly also as a result of
connecting infrastructure links,”
Deutsche Bank said.
The proof of Gujarat’s aggressive
wooing of investments is the fact that
it has toppled Maharashtra as the
leading state as far as domestic
investments are concerned.
According to data released by the
Centre’s Secretariat for Industrial
Assistance, Gujarat has emerged as
the preferred destination for domestic
investors who invested `9,44,417
crore in the state between August ’91
and March ’11.
On the other hand, states like
Maharashtra attracted `8,10,864
crore worth of investments, Andhra
Pradesh- `7,84,066 crore, Karnataka -
Beyond Market 10th Oct ’11 It’s simplified... 17