In 10 yrs,state scores high in investments,low in jobs

No. of projects and jobs created during 2003-12 in Gujarat has fallen by over 45 per cent.

Written by Avinash Nair | Ahmedabad | Published:January 3, 2014 5:22 am

The last one decade has seen a real good show in terms of investments in Gujarat. However,data sourced from the Gujarat Industries Department shows these investments has had little impact in terms of commissioning of new industrial projects or creation of new jobs.

Compared to the 1990s,the number of new projects commissioned and the new jobs created during 2003-12 (calendar year) in Gujarat has fallen by over 45 per cent.

The year wise data of Gujarat’s industrial projects (with an investment size of Rs 10 crore and above) sourced by The Indian Express for the last 20 years from Gujarat Industries Department show that the state has done appreciably well in terms of the quantum of investments that have flowed into the state. But the number of projects commissioned over the last decade is not as impressive.

For instance,between 2003-12,the state attracted Rs 1.03 lakh crore of investments. This is 14 per cent more than the Rs 88,700 crore of investments that have come into the state in form of commissioned projects between 1993-2002.

“The projects that are of size Rs 10 crore and above are described as large projects by the state government,” said a state government official requesting anonymity.

However,when the sheer number of projects are taken into the consideration,the investment figures begin to look a shade jaded. During the 10 years between 2003-12,Gujarat saw 1,681 new industrial projects (with an investment of Rs 10 crore and above) being commissioned,which is 47 per cent less than the number of projects (3,127 new projects) commissioned between 1993-2002.

Secondly,the number of new jobs created by these new industrial projects is also on the lower side. Between 2003-12,over 3.12 lakh new jobs were created by these large projects in the state. However,this is 45 per cent less than the 5.66 lakh jobs generated between 1993-2002.

The number of permission issued to new large-scale industrial projects have also surprisingly dipped during the Modi era. The projects to whom the government had issued Industrial Entrepreneur’s Memorandum (IEM),Letter of Intent (LOI) and Letter of Permission (LOP) were 5,236 in number between 2003-12. This is 17 per cent less than 6,254 projects to whom these permission were issued between 1993-2002.

While senior state government officials were tight-lipped about there figures and a questionnaire sent to the Industries Commissioner remained unanswered,an eminent economist from Gujarat,Y K Alagh said,“Gujarat’s industry has never seen the growth rates that it saw during the 1990s,when the size of industrial sector in the state used to double in every six years. The industrial sector in the state grew by 12-14 percent,and this growth was much more striking because,Gujarat was the only state that was growing at this pace.”

Alagh,who is also professor emeritus at city-based Sardar Patel Institute of Economic and Social Research (SPIESR),felt that in the first decade of the 21st century Gujarat’s industry has a similar growth rate,but the state is faces competition from other states like Karnataka,Haryana,Maharashtra and Odisha.

Industry experts point out that large-ticket projects belonging to national and international firms like Reliance,Essar,ONGC,GNFC,General Motors,FAG Bearings,Bombardier,Tata Chemicals,ABB,Siemens,etc. all happened before 2002.

“Gujarat’s industrial history is not a decade old story. It is a over a century old. However,the (state-sponsored) Vibrant Gujarat event has helped promote and market this brand Gujarat that mostly ignored from a marketing point of view. It has provided the local industries with a platform and in turn has helped tell the world and the rest of the country about what all has been achieved by the industrial sector in Gujarat,” said Bhagyesh Soneji,president of Gujarat council of ASSOCHAM while talking about the biannual summit that was first floated to attract investments in 2003.

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