Thursday, March 10, 2016

Gujarat No 1 in Govt of India pushed report? Not in labour, infrastructure, economic conditions, governance

By Rajiv Shah
A report by a top Delhi-based think tank, National Council of Applied Economic Research (NCAER), prepared under the direct leadership of Amitabh Kant, ex-secretary, Department of Industrial Policy and Promotion (DIPP), Government of India, has claims that Gujarat ranks No 1 in the NCAER State Investment Potential Index (N-SIPI), though there is a dig.
N-SIPI has been divided into two separate indices. The first one includes five “pillars” based on which the index has been arrived it. These pillars are: labour, infrastructure, economic conditions, political stability and governance, and perceptions of a good business climate. It is called N-SIPI 21, as it includes a survey of 21 states out of 29.
The second index, called N-SIPI 30 (29 states and one union territory), is based on an index arrived at on the basis of four of the five pillars, labour, infrastructure, economic conditions, political stability and governance – but excludes the “perceptions of a good business climate”, as seen by top Indian business executives.
Funded by the Foreign and Commonwealth Office, British High Commission, India, the report finds that in N-SIPI-21, Gujarat ranks No 1 in two of the five pillars, which are -- political stability and governance, and perceptions of a good business climate. As for N-SIPI-30, Gujarat is nowhere near No 1 in any of the four pillars analyzed to arrive at the ranking.
To quote from the report, “In N-SIPI 21, Kerala, Tamil Nadu and Karnataka top the list under the labour pillar. In the infrastructure Pillar, Delhi tops followed by Punjab and Gujarat. In the economic climate pillar, while Delhi comes out top again, it is closely followed by Andhra Pradesh and Maharashtra.”
As for N-SIPI 30, where only secondary data has been analyzed, and perceptions of businessmen have been excluded for analyzing any of the four pillar, Gujarat ranks No 4 in the first pillar, labour, with first three rankings going to Kerala, Tamil Nadu and Karnataka. In the second pillar, infrastructure, Gujarat again ranks No 4, with Delhi, Goa and West Bengal occupying the first three positions.
In the third pillar, economic conditions, Gujarat ranks No 5, and the states which rank above Gujarat are Delhi, Goa, Andhra Pradesh and Maharashtra. And in the fourth pillar, governance and political stability, Gujarat again ranks No 5, with four states ahead of the state – Tripura, Mizoram, Nagaland and Tamil Nadu.
The report states, it provides “a single composite investment rating of how the 29 Indian states and the Union Territory of Delhi are positioned to encourage and attract investment”, adding, it also provides “an entry point in thinking about new investment for domestic and overseas firms and encouraging a more competitive ethos among India’s states.”
Revealing Government of India hand in preparing the report, it states, “We are grateful to DIPP Secretary Amitabh Kant for his leadership in our consultations with his department officers during the course of this work. We also greatly welcome the enthusiasm shown by Kant’s successor, Ramesh Abhishek, in the work at NCAER for N-SIPI, and for Kant’s continuing interest in N-SIPI as the new CEO of the NITI Aayog.”
Analysing performance of two industrial sectors, pharmaceuticals and automobiles, the report does not find Gujarat No 1 in either of them. It says, “In terms of profitability in the pharmaceutical industry, Maharashtra, Andhra Pradesh (including Telangana), and Gujarat appear to be the top players followed by Karnataka and Uttarakhand.” It adds, “In terms of the market demand for pharmaceutical products, Kerala, Punjab and Karnataka top the list followed by Jammu and Kashmir and Tamil Nadu.”
As for automobiles, it says, “The dominant states in the automobile sector, on the other hand, are Delhi, Maharashtra, and West Bengal, followed by Haryana and Goa. In the retail sector, Delhi, Goa, and Kerala come out as the top three states with the highest potential for growth, followed closely by Maharashtra and Karnataka.”

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