Thursday, February 19, 2009

STATES IN SEARCH OF INVESTORS

Jyotsna Bhatnagar
The Financial Express

Corporate India no longer symbolises only corporates. It now encompasses most states of the country too with each vying for Numero Uno status on the investment sweepstakes. Selling themselves to investors as the ultimate investment destinations in a bid to attract big-ticket projects has become a major business for state governments with chief ministers donning the mantle of the CEO. And in this new marketing arena, Gujarat is emerging as a major gladiator.

Armed with deft media management and high-decibel publicity blitzkriegs, its biennial Vibrant Gujarat Global Investors Summits (VGGIS) have become case studies for all that state governments should do to market their USPs to investors effectively.

And with a deluge of MOUs totaling a humungous Rs 12 lakh crore this year, Modi has become the strongest contender for the Best CEO CM award. In fact, several leading industrialists have raised his bar even higher pitching him as a suitable CEO PM material. Says Kumar Mangalam Birla, scion of the Aditya Birla empire, “The growth in Gujarat is excellent. We would prefer Gujarat for our further investments in sectors like power and cement.”

But if you thought that Gujarat is the only state going the extra step to rake in the moolah, think again. Several states are in the race to bag more and more projected investment. In fact, surveys conducted show that despite the global meltdown, the number of investment intentions including industrial entrepreneur memoranda, letters of intent and direct industrial licences are registering a significant increase.

The number of investment intentions filed during April-October 2008 increased by 16.6% over the corresponding period in 2008. Analysts say it’s because companies do not want to be caught unawares when the good times return after the prevailing sluggishness is over.

Andhra Pradesh is yet another exciting investment destination and is as savvy as Gujarat when it comes to promotion of its USP. The state conducts a regular investment promotion event, the Hyderabad IT Summit. Previously known as Gitex, the objective of the event is to invite investment into IT & ITES sector from across the world. And like Gujarat, the state government, in association with industry chambers, organises various road shows, events and seminars to showcase investment opportunities in various sectors to prospective entrepreneurs.

APInvest, an independent nodal agency for investment promotion, is acting as a single point of contact to facilitate and handhold the investors to extend every possible support. It also conducts road shows across the world and has so far conducted road shows in the US, Germany, Singapore and other parts of the world. The agency works closely with most of the embassy offices of foreign countries in India, and industry associations across the world to showcase Andhra Pradesh as a preferred investment destination.

The efforts of the Andhra Pradesh government to promote itself have borne good dividends as well. While the national growth rate in 2007-08 was recorded at 9.03%, Andhra Pradesh has achieved a GSDP growth rate of 10.64%. The state government has made an inclusive growth encompassing all sectors like IT, pharmaceuticals, biotechnology, rural development, agriculture, irrigation and social security. The state has an enviable number of more than 300 industrial parks and 98 approved SEZs located across the state that offer investment opportunities particularly in sectors like petroleum and chemical.

One state, which has been successful in attracting as much, or perhaps more, mega bucks than Gujarat, however, views investment melas with utter disdain. Downplaying the signing of MoUs by the Gujarat government at the recently held Vibrant Gujarat, the Maharashtra government is instead concentrating on giving finishing touches to its new industrial policy and a revised policy for IT and ITeS to maintain pre-eminence in attracting investments in the state.

Since the declaration of its mega project policy, Maharashtra has, in last three and half years, attracted investment worth Rs 1,40,000 crore in 116 projects largely in the automobile and auto components, textiles and engineering. The government claims that the implementation rate is also high at 78%. Under the mega project policy, the government offers customised incentives to the investors.

The state government is also planning a mega event Maharashtra 2020 to attract more investments. However, according to a senior state government official, “The government is not keen to have a jamboree but a real business like gathering. All details are being worked out.”

To give a big push to its move to attract domestic and foreign direct investment, the state government is also readying a new IT policy, a new Agri Industries Policy and a comprehensive pro-investor land acquisition policy. Maharashtra chief minister Ashok Chavan has also indicated that focus will be on expediting infrastructure development, biotechnology, power generation and upgradation of 22 airstrips in the state.

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