Global Investors’ Summit – India Inc. Makes a Beeline to Madhya Pradesh

Global Investors’ Summit

Global Investors’ Summit

Madhya Pradesh just concluded the Global Investors’ Summit in Indore, leaving the Chief Minister, Shivraj Singh Chauhan, a very happy man. The meet saw leading captains of the industry praise the Chief Minister for consistently ensuring that MP remained India’s foremost State in growth rate.

A perennial BIMARU State for decades, MP has emerged as the only State to continue delivering a growth rate over 10% for the last three years and that’s no mean achievement.

This has been rewarded with the India Inc. responding to the call for the Global Investors’ Summit by making online filing of an ‘Intent to Invest’ and committing a total investment of over Rs 4 lakh crore over the next five years in the State.

It’s raining investments

Leading the pack was Anil Ambani of ADAG who stated that ADAG had already invested over Rs 30,000 crore in the last five years in core areas like power, cement, coal and telecom and was now ready to commit another Rs 30,000 crore over the next five years.

RIL’s Mukesh Ambani too was very positive on the business environment in the State. He said that RIL had invested Rs 20,000 crore in the last two years in energy and various consumer sectors and was now bullish on investing further to make MP a leading digitised State. The group is driving the digitization backbone with the hope to accelerate development in the State.

Another major focus area for the group is coal-based methane exploration which will attract further investment from the group. RIL has also been working closely with farmers in the State and now the group is planning to focus on the MSME sector and provide all necessary mentoring to spur economic growth in the State.

Tata Group Chairman Cyrus Mistry spoke about the group’s plan to bring MP onto the IT map once their major IT campus in Indore is launched, which will provide jobs to over 10,000 IT professionals. In addition, the group is also in the process of establishing a mechanical skill development centre in the State Capital and also step up its investment in the agro-processing industry.

L&T’s AM Naik too spoke about L&T’s existing relationship with the State and with the defence sector opening up to private players, the group was looking forward to investing in that, especially around the Jabalpur area, which is already a major defence equipment production centre.

The Adani Group led by Gautam Adani is poised to invest Rs 20,000 crore over the next five years which includes a top class grain storage facility.

Other companies announcing plans to invest were ITC, Essar, Future Group, Godrej, among a host of other companies.

So why has India Inc. suddenly discovered love for MP?

The industry is attracted by the backdrop of MP’s emergence as a rapidly developing State.

For decades, MP has been a poorly administered State, where the political masters never took development of the State as a focused agenda. Elections were fought on vote bank politics and development took a backseat.

When Chhattisgarh was hived off as an independent State, most of MP’s natural resources and existing power plants went to Chhattisgarh. Post State partition, MP continued to struggle with severe power shortage, minimal industrial development, high level of unemployment and languishing agricultural production. This is what Shivraj Singh Chauhan inherited when he took over as the Chief Minister.

After taking some time to settle in, Chauhan decided to focus on development of infrastructure and agriculture as starting points to transform the State. The strategy turned out to be the right one. This year, MP grew at 11.08% while the national average stagnated at 4.7%. Despite the nation witnessing recession and dropping growth rates, MP has consistently been delivering the highest growth rate, with agriculture growing at around 20% for the last three years and Shivraj Chauhan can take full credit for it.

Power generation on the rise

At the time of Chouhan’s taking over the chief ministership, the State was generating only 2,900 MW of power and it had to face a major power crunch. Today, the MP is generating 14,000 MW of power with another 4,000 MW to be added shortly. That’s no mean achievement for a State that was languishing for decades. By 2018, the State is expected to raise the power generating capacity to 20,000 MW and turn surplus.

Agriculture taking the lead

Agriculture was stagnating, with only seven lakh hectares of irrigated land, at the time Chouhan took over. With increased focus on developing irrigation projects, the State currently has over 28 lakh hectares of irrigated land and this has been the single biggest reason for MP to consistently achieve growth rates of 20% for the last three years, in agriculture.

The massive increase in agricultural production has brought increased prosperity to farmers and also increased cash transfers from the Centre. These additional funds have been wisely invested in various infrastructure related projects that further accelerated economic development.

Industrial development the laggard

Unfortunately, the significant increase in agricultural development has not been replicated in the manufacturing sector, which saw only 4.9% and 2.8% growth in the last two years, respectively. Shivraj Chauhan realizes that if he wants to carry forward the growth rates achieved so far, he will have to step up industrial activity in the State.

Changing gears

It is in this backdrop that the recently held Global Investors’ Summit in Indore holds significance. The Chief Minister has successfully been able to attract significant investment into the manufacturing and skill development in the State and the results will show as the process of project implementation gets underway.

He has rightly focused on developing the MSME sector in manufacturing and towards encouraging the same, he has announced a Rs 100 crore Venture Capital Fund and a separate department to focus on developing the MSMEs. Taking cue from Modi, he has given a call for ‘Make in Madhya Pradesh’.

With major thrust on manufacturing and services, Chouhan is also focusing on addressing the problem of high unemployment rate in the State. To keep pace with the forthcoming industrial activity, the Chief Minister has rightly involved the private sector for initiating major skilling programmes and with the TCS Campus to be launched shortly, over 10,000 additional IT jobs will be created in the State.

With industrial investment and activity picking up pace and agriculture continuing to grow as it has so far, the State is well positioned to remain an attractive investment destination.