Wednesday, July 19, 2017

Vibrant Gujarat? Employment generation drops to 1 job per crore investment from 5 jobs per crore investment

By Our Representative
A recent analysis in a top business site has suggested that the Gujarat government has messed up data on the “successes” it claims to have achieved in the high-profile Vibrant Gujarat world business meets, with the state’s own data revealing that the summits have failed to generate jobs, which has been one of the proclaimed aims.
The analysis by Ravi Nair says that the government claims, 57% of the memorandums of understand (MoUs) “are either implemented or under implementation”, and “we have no option but to believe this claim as no concrete data is available in any of the Gujarat government websites including www.vibrantgujarat.com.”
However, the Gujarat government, says Nair, “forgot to remove the data from one place, the website of the Commissionerate of Industries, government of Gujarat”, whose figures show that from January 1, 1983 to September 30, 2016, a total of 6,251 projects were implemented in Gujarat with a cumulative investment of Rs 2.76 lakh crore, generating 10.67 lakh jobs.
The official data further state that another 4,033 projects are under implementation with a total investment of Rs 951,980 crore, which is projected to generate another 9.30 lakh jobs.
Comments the analyst: “Note the stark difference… In the already implemented projects, every one crore rupees invested generated approximately four jobs, whereas the projects under implementation (for which MoUs were possibly signed) will generate less than one job for every one crore rupees invested.”
“Historically, as a state, which was more into trade and commerce because of its geography and arid climate, Gujarat had better growth rate compared to other states, except for a brief period of four years from 1998”, Nair underlines, adding, “Towards the end of this period, Modi took over as CM of the state and within two years came the first Vibrant Gujarat summit.”
In all the eight editions of the Vibrant Gujarat summits, the Gujarat government has declared that it has signed 51,378 MoUs worth a whopping Rs 84 lakh crore.
Ironically, says the analyst, India’s GDP “currently stands at nearly Rs 170 lakh crore, and the government claims that “57% of these signed MoUs are either implemented or under implementation”, wondering why it doesn’t find reflected in the country’s GDP.
Checking on the type of MoUs signed by the Gujarat, in the road and railway tab, Nair says, he found (click HERE and HERE) a subsidiary of an infrastructure development group with a paid up and share capital of Rs 5 lakh each had signed an MoU.
On further investigation it was found that the company with such “small paid up capital” that was to make in roads and railways was none other than the National Highway Authority of India (NHAI), adding, “NHAI is the nodal agency, which takes care of the development and maintenance of national highways” and “never invests directly in any project.”
In fact, he elucidates, “NHAI, once it identifies the area for either re-development or new construction, auctions the project and invites tenders. Technically and financially qualified bidders get the contract for the construction.”
In yet another fact-check on urban development MoUs, Nair found, on checking with 14 out of 37 companies over phone, he found that these were all “small-time builders who have been asked by officials to sign up MOUs for the small-scale housing or commercial buildings.”
“One gentleman, requesting anonymity, said almost all the builders in Ahmedabad signed up MoUs, irrespective of the size of the company. And whether they sign up these MoUs or not, that is the business they are into since years”, he adds.

No comments: