Anil Ambani, the chairman of the Reliance Group, who had announced in a Global Investors Summit at Khajuraho that his group will be investing Rs 2.5 crore per hour in Madhya Pradesh (MP), has been allotted the last parcel of land of 4.29 acres for his Sasan Ultra Mega Power Project last month. It took seven years for the government to allot the land since the project was committed in 2007.
Industrialist Kumar Mangalam Birla had committed an investment of Rs 7,700 crore, in 2006, to set up one of India's largest alumina smelter projects in Singrauli village.
Although the investment has reached Rs 13,000 crore in the last eight years, the project has not started commercial production yet.
Infosys had announced to establish a Rs 600-crore project in 2012. The project is yet to come up.
But, what gave Chief Minister Shivraj Singh Chouhan and his government the confidence to sell the state's potential in domestic and global markets is the state's performance. MP recorded an economic growth of 11.9 per cent and a historic 24.99 per cent growth in agriculture - the highest among Indian states.
Soon after winning 165 of a total 230 seats in the state Assembly elections for his party, followed by 27 seats of the total 29 in the recent general elections, Chouhan faced the heat of a multi-crore entrance examination scam that had already reached his doorstep. Some of his former Cabinet colleagues and state government employees are already languishing in jail for their role in the scam.
But an unfazed Chouhan visited countries such as South Africa to market MP for the next Global Investors Summit to be held in Indore next month.
The Global Investors Summit was first launched by Digvijaya Singh, when he was the chief minister of the state. His government, in association with Confederation of Indian Industry, tried to lure foreign investors, primarily power companies such as Power-Gen, Ogden and Siemens to invest in the state. But the initiative never went beyond the signing of memorandums of understanding (MoUs).
There were allegations of irregularities against the Congress government, as some officials of the state Industrial Development Corporation disbursed government-secured loans to an influential industrialists in the form of inter-corporate deposits. They later turned "wilful defaulters". The state police's economic offences wing probed the matter and the case under sub judice.
Chouhan revived the Global Investors Summit in association with a new partner, the Federation of Indian Chambers of Commerce and Industry, in 2007. But these summits have failed to inspire confidence among the industry.
Replying to a question in the Assembly, the state government had said it had signed 31 MoUs worth Rs 74,210 crore at Khajuraho Global Investors Summit in 2007, while 71 MoUs of Rs 61,521 crore were signed in the second edition of the summit at Khajuraho in 2010. The summit at Indore witnessed 159 deals of Rs 1,17,418 crore. Besides, the summit received 998 proposals of Rs 3,76,980 crore.
Interestingly, the state government in July this year told the Assembly that it had signed 102 MoUs during the Indore summit in October 2007, 109 MoUs in the Khajuraho summit in 2010 and 425 of them in the Indore summit in 2012.
Earlier this month, Chouhan had said in New Delhi: "Out of the MoUs inked for investment of Rs 2,00,000 crore, MoUs worth Rs 1,15,000 crore have already materialised in MP so far."
However, the MP Trade and Facilitation Corporation website says: "Due to untiring efforts of the state government, 324 MoUs worth Rs 4,51,474 crore have been signed for setting up of various industries in the state. Of the 324 MoUs, 12 MoUs have been implemented and 18 MoUs involving Rs 38,845 crore are being implemented. The remaining 255 MoUs costing Rs 3,81,902 crore are in the process. The state government has rejected 16 MoUs involving Rs 24,000 crore for different reasons."
Assocham recently released a report, which says, "Poor execution of 134 investment projects in MP has resulted in serious cost-push worth about Rs 97,000 crore as of financial year 2013-14 - about 27 per cent of their actual costs of Rs 3.6 lakh crore."
"Of about 399 investment projects that are under different stages of implementation in MP, about 224 projects have recorded either a time overrun or cost escalation."
But government officials immediately clarified and said the state has attracted Rs 34,675 crore during 2013-14 vis-à-vis Rs 37,000 crore investment proposals attracted in 2012-13.
Chouhan had envisioned making MP a power hub, but the absence of coal allocation, environment clearances and land allocation issues have put a dampener on his plans. The focus is now on developing infrastructure.
What can be expected of the forthcoming summit? Chouhan has said there will be no MoU-signing ceremony. The focus will be on serious business. But nobody knows what "serious business" means. "If I would have had an answer, I could have given it," quips a senior executive, whose company has made a significant investment in the state.
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