Industry welcomes govt continuity in Gujarat, seeks more reforms

Economists say BJP should focus on socio-economic indicators, fiscal burden

The BJP government retaining power in Gujarat after the party’s seventh consecutive victory in assembly elections is good for the economy and strengthens its hand for reforms, said businesses on Thursday.

“It is a pro-development verdict and a reflection of the good work being done by the incumbent government. The industry too didn’t want the momentum to be lost which would have come as a jolt for us in case of a regime change,” said Pathik Patwari, president, Gujarat Chamber of Commerce and Industry (GCCI).

Rajiv Gandhi, chief executive officer and managing director of Ahmedabad-based animal vaccine company Hester Biosciences, said that the BJP’s victory would mean “continuity in all reforms, plans and programmes” that would benefit industry and create employment.

“After Covid pandemic, the economic trajectory is set to now go up and with the same government with a higher majority, it would only lead to a surge in industrial growth. Even we are bullish about our capacity expansions planned for next year,” said Gandhi.

The BJP government implemented economic reforms and a new regime would have found it to carry out the industry’s pending demands and deal with the state’s fiscal burden, said Patwari.

Business demands include power and land reforms for micro, small and medium enterprises (MSMEs) and reducing non-utilisation charges for Gujarat Industrial Development Corporation (GIDC) industrial estate plots.

“While power reforms could save MSMEs Rs 30 lakhs per annum, the non-utilisation charges currently levied are a bit heavy and could be reduced, especially in GIDC’s industrial estates that are unsaturated with several unsold plots,” Patwari.

Economist Hemant Kumar Shah raised concerns about indicators that seem to have taken a backseat in favour of “more visible development”.

“Gujarat’s fiscal debt is almost Rs 3.5 trillion and is estimated to be Rs 4.5 trillion in 2 years, as stated in the fiscal policy statement. The incumbent government’s fiscal prudence is not visible. In its election campaign, the BJP government itself said that seven million poor families were given ration, which means roughly 35 million people are poor.

Poverty and unemployment, particularly in the rural areas is highly visible. Road infrastructure barring districts is also still missing. The current elections are being won solely on the basis of visible infrastructure development such as urban roads, flyovers, metro rail, and high speed rail, among other things,” said Shah.

Sunil Parekh, an economist and strategic industrial advisor to companies, said that the continuity in government would ensure new investments and address socio-economic indicators.

“The government is geared towards economic development and is also far better placed than other states. The state’s GST figures have also improved in recent times. However, certain challenges remain such as socio-economic indicators which might now need to be looked at with the same government continuing. Otherwise, a new regime would have tried to mostly undo what the previous government did,” said Parekh.