Gujarat No. 1 in getting FDI, says CM but figures don’t add up

“As a new team in Gujarat, when we toured foreign countries in connection with the Vibrant Gujarat summit, people wanted to start business in India because of Prime Minister Narendra Modi. In India, Gujarat is the preferred location for starting a business. Since the last three years, Gujarat has been number one in FDI,” Patel told the gathering of businessmen.

While the chief minister’s claim on FDI was received with applause by the audience at the event, the official figures, however, tell a different story. The DPIIT figures show that Gujarat has traditionally lagged behind Maharashtra, Karnataka and Tamil Nadu in attracting FDI.

In the past three years, the only time Gujarat topped was in 2020-21, when it accounted for 35 per cent of the total Foreign Direct Investments (FDIs) in the country. The Covid pandemic notwithstanding, Gujarat attracted investments worth Rs 1,62,830 crore, beating the leader Maharashtra that got investments worth Rs 1,19,734 crore. During financial years 2019-20 and 2018-19, Gujarat stood fourth, trailing Maharashtra, Karnataka and Delhi in attracting FDI (see table).

The latest figures from DPIIT also show that the glory attained in 2020-21 was short-lived as the state failed to sustain the interest of foreign investors. In the first nine months of 2021-22, Gujarat attracted investments worth just Rs 15,321 crore and slipped to the fifth position on FDI list, behind Karnataka (Rs 127,565 crore) , Maharashtra (Rs 71,858 crore), Delhi (Rs 47,343 crore) and Tamil Nadu (Rs 17,696 crore).

Compared to the Rs 1.58 lakh crore FDI during April-December 2020-21, the investments in Gujarat during the same period in 2021-22 dipped by 10 times. If the cumulative FDI inflow into India is taken into account for the last two decades, then the DPIIT figures show that Maharashtra accounted for 30 per cent FDI inflow between April 2000 and 2020. During the same period, Gujarat accounted for only 5 per cent of the FDI inflows, well behind Karnataka (9 per cent) and Tamil Nadu (7per cent).

Addressing the BNI event, Patel said education, health and security were important parameters to attract businesses. “Even for skill development, there are a number of small courses in Gujarat, including those for electricians, fitters, plumbers and all other areas. We get the best skilled labour in Gujarat,” the chief minister said. Talking about startups, Patel said his government was promoting job creators by supporting startups. The state government has disbursed Rs 51.83 crore to 342 startups in the state till now, he said. There are 150-odd startup incubators in Gujarat. “There are more than 8,000 startups functional in Gujarat and with the help of the state government, 125 patents have been filed by them,” Patel added.