Thursday, January 22, 2015

Assocham says Gujarat investment declined 54.5% amid Vibrant claims of Rs 25 lakh crore worth proposals

By Our Representative
An analysis put out by one of India’s top corporate bodies, the Associated Chamber of Commerce and Industry (Assocham), has sought to reveal that Gujarat’s industrial investment proposals on year-on-year basis have declined by a whopping 54.5%. The analysis is considered significant, as it seeks to indirectly contrast what happened at the Vibrant Gujarat business summit, where a claim was made that the state had attracted a whopping Rs 25 lakh crore worth of investment proposals, highest ever.
As against Rs 25 lakh crore, Assocham analysis said, during January-September 2014 Gujarat received just about Rs 31,788 crore worth of investment. This is, it added, as against more than double as much -- Rs 69,847 crore – investment received during January-September 2013.
The industry body’s analysis is based on analysis of industrial entrepreneurial memorandums (IEMs), letters of intent (LoIs) and direct industrial licenses (DILs), released by the Government of India’s Department of Industrial Policy and Promotion.
The analysis, significantly, comes amidst Prime Minister Narendra Modi’s effort to strongly showcase Gujarat as the model of development for the country through the Vibrant Gujarat investment summit. Not only Gujarat; India under Modi, Assocham contended a fortnight ago (January 7), has considerably slowed down. Thus, country received investment proposals worth Rs.362,805 crore in January-September 2014, a drop from Rs.451,643 crore in the corresponding period of 2013.
It is not known what made Assocham come up with such a short-period analysis, which is generally not considered advisable for investment proposals. Experts believe, investment proposals may take a stride in a particular year, but may go down in another, depending on the type of projects proposed. Hence, they are not credible. It is advisable to take a longer duration analysis, say of five years, while calculating investments.
Assocham did not stop here. It went ahead by declaring that Chhattisgarh has acquired “lion’s share” of about 45 per cent in the total amount of proposed investments in India, with Rs 1,61,836 crore, during January-September 2014.
This is, it said, nearly 420 per cent over the corresponding period of January-September 2013. “Other states, which registered significant growth in terms of proposed investments, were Punjab (184 per cent), Karnataka (166 per cent), Himachal Pradesh (108 per cent) and Assam (25 per cent)”, it , suggesting Gujarat, on the other hand, registered a decline.
Assocham "analyses" come a week after it officially sharply criticized the Modi Cabinet's decision to peg the reserve price for 900 MHz spectrum above the telecom regulator's recommendation, declaring, “it will not only impact consumers but also affect the government's Digital India initiative.” It wrote a letter to Prime Minister Narendra Modi saying the move would impact growth and expansion of quality networks.
"The industry is deeply concerned with the Cabinet's decision to raise the reserve price for 900 MHz spectrum," media reports quoted Assocham as saying. The reserve prices for the proposed auction of spectrum in the 900 MHz band in 18 service areas was increased by the Cabinet by 32.5% over the reserve prices recommended by the Telecom Regulatory Authority of India.

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