MP: KAMAL NATH MEANS BUSINESS
The new government is in a hurry to get business going in the state, and the recent summit has rekindled hope
Aware that his reputation as a business facilitator will be put to the test, Madhya Pradesh chief minister Kamal Nath organised the first investor summit of his 10-month-old government at Indore on October 18. ‘Magnificent Madhya Pradesh’ was meticulously planned and marketed as a ‘different’ kind of event— and so, the standard-fare MoU signings were avoided. “I wanted this meet to be unorthodox and unconventional, so I will tell you what this meet is not, rather than what it is,” Nath told captains of industry and delegates at the inaugural. “It is not a jamboree, nor a mela nor an MoU-signing spree. We have something to offer to you, which is why we called you,” he added.
While the MoU-based approach makes for good optics, past records show that actual investment is often just a fraction of what is promised. As per the industries department records, the Global Investor Summits of 2007, 2010, 2012 and 2014, organised under the Shivraj Singh Chouhan government of the BJP, saw more than 2,300 MoUs
signed; only about a hundred have been commissioned so far while about 500 were cancelled. A number of companies were also allotted land, which still remains unutilised.
‘Magnificent Madhya Pradesh’, in contrast, had about half a dozen leading industrialists and some 800 delegates. Among the top names were those who have already invested in MP, including Adi Godrej, N. Srinivasan of India Cements, Sanjiv Puri of ITC, Vikram Kirloskar, Dilip Shanghvi of Sun Pharma, Ravi Jhunjhunwala of HEG and Rajinder Gupta of the TridentGroup. And they spoke as brand ambassadors of MP. Mukesh Ambani of Reliance Industries said, in a recorded video message, that he would set up distribution centres at 45 locations in the state, covering 10 million sq. ft of land. Firm investment proposals for Rs 31,500 crore, with the potential to employ 103,000 people, have been received
in the past 10 months, said principal secretary, industries, Rajesh Rajora. By evening on October 18, investment proposals to the tune of Rs 74,000 crore were discussed, say sources.
In a bid to woo industry, the Nath government introduced a number of concessions in the run-up to the meet. There are now sector-specific policies for real estate, housing, energy, tourism, retail, logistics and even AI. To inject life into the moribund real estate sector, which offers substantial employment, circle rates of land were slashed by 20 per cent. The number of documents required for licences have been reduced from 27 to five and a pilot land-pooling policy has been introduced at the Pithampur industrial area near Indore.
More importantly, Nath has made it clear that his doors are always open to business if any issues have to be resolved. There are already reports float
ing around of how the CM has got the state’s gargantuan bureaucracy to speed up work on projects. “The concern in our company is that the government is moving faster than us,” said India Cements’ Srinivasan at the summit. “We cannot keep pace with you because your decision-making is so good. I am under pressure to set up this facility (a new cement plant with an investment of Rs 1,200 crore) fast.”
While top industrialists were effusive in their praise, the ones not in the spotlight seemed a little more guarded. “We are exploring many states looking for a place to set up another manufacturing facility. We read about the summit and decided to see things for ourselves in MP. We are still considering all options,” says R.K. Dua, MD of Relaxo Footwear.
The MP government made the most of a report on employment, released around the same time as the summit. The latest report from the Centre for Monitoring Indian Economy (CMIE) said that joblessness at 7 per cent was at its peak in MP in December 2018 and had dropped to 4.2 per cent by September 2019. Flatteringly for him, this corresponds with Kamal Nath’s term in office.
But can his government make legacy issues like the state’s bureaucratic aversion to business go away? The negative business sentiment in the country and the difficulty in securing finance from lending institutions could also be roadblocks. There is also concern within the permanent executive that the chief minister, under pressure to prove himself, is giving more concessions than MP can afford. The opposition is also unimpressed. BJP state president Rakesh Singh says MP is magnificent only because of the “hard work” put in by the BJP government over the past 15 years.
Nath says the plan was to introduce MP to potential investors and that it will take two years for results to show. “I have a roadmap for how MP will look five years from now, and I’m working backwards from it,” he says.