Not so Vibrant Gujarat

By Rajiv Shah
In case Gujarat chief minister Narendra Modi wins the forthcoming assembly polls – which he is likely to with a comfortable margin, if one goes by pollsters’ predictions – we will witness yet another biennial Modi show, the sixth Vibrant Gujarat global summit. Gujarat’s bureaucrats, sure of Modi victory, haven’t left any stone unturned to make preparations for the show, to take place at Mahatma Mandir, a convention centre not very far from Sachivalaya in Gandhinagar. Industrial Extension Bureau, propaganda wing of the state industries department, has printed thousands of folders “welcoming” investors at the “Vibrant Gujarat global business hub”, asking them: “Block your diary for January 11-13, 2013.” Partner countries have been declared – Japan and Canada; and partner organizations are Japan External Trade Organization, US-India Business Council and Australia-India Business Council. A folder, carrying a Modi photograph, quotes him to say: “Gujarat is emerging as a globally preferred place to live in and to do business.”
All of this didn’t amuse me as much as the “highlights” of the last show, which took place in 2011, especially its “outcome” section in the folder. It proudly declares that 8,380 memorandums of understanding (MoUs) were signed with “prospective investors”, more than “100 political leaders, senior diplomats and captains of industry” were on the dais, and “around 460 tieups with leading institutions from across the globe for knowledge exchange” took place. Further, there were 150 B2B (business to business) and B2G (business to government) “meetings.” Good enough. But what’s singularly missing is the amount for which MoUs were signed, something which Modi personally took pride in declaring at the end of the last show. I remember how principal secretary, industries, Maheshwar Sahu, who wounded up the show with all the data, left it to Modi to declare the MoU amount. Modi stood up, and amidst a huge applause from his supporters, who had thronged the occasion, declared it was Rs 21 lakh crore!
I was at a loss. Why is the folder, prepared so meticulously, quiet about the amount? The MoUs amount had been rising by geometrical proportions. It was 14 billion dollars in 2003, 20 billion in 2005, 152 billion in 2007, 241 billion dollars in 2009, and finally 463 billion dollars at the last show. What a grand success, one would wonder, considering that the total amount for which MoUs have been signed up almost equals the Planning Commission’s outlay for India in the 11th five year plan! I decided to informally chat with some of those who were involved in the past shows and, also, with those who are preparing for the next show, in January, in order to get a feel of what was happening. One of them, apparently, joked, “There’s going to be a target – one trillion dollars, just go and find out. Modi will win the polls and distribute it to us all. Am giving you inside info, about which industries department people are not aware of.” He looked straight, smiled, kept me guessing, and we parted ways.
I posed a question to another bureaucrat. What will be the highlight of the next summit? And this is what he said: “Last time, we covered an exhibition area of 35,000 sq metres. This time it will be 1 lakh sq metres.” I asked: “And what will be the amount for which MoUs will be signed?”, to which he replied, “There’s no focus on MoUs. Discussions will take place on different issues, tie-ups may happen, but no MoUs.” I asked him further, “Why this? Change in strategy?” And he became frank: “There was a rat-race during the past summits to sign MoUs. Targets were given, which we had to fulfill, whether we liked it or not. Industrialists didn’t choose the amount for which MoUs were to be signed; we would suggest it.” He added, “The ports department, for instance, was given the target of Rs 90,000 crore for the 2011 summit, which was over-fulfilled, reaching Rs 1.10 lakh crore, and same was the case with other key sectors like power, petrochemicals, automobiles and engineering. Invitations were forwarded to only those who had told us in advance about their desire to sign up MoU. If the targets seemed difficult, we would ask the investor to add a zero or two. Rs 300 crore, for instance, would easily become Rs 3,000 crore.”
Indeed, I was personally witness to how it all happened in the past. Invitations were a gateway to sign MoUs and stand next to Modi. Higher the amount, closer you would be standing with Modi for the photo session, which would happen at the end of each MoU signing ceremony. The ceremonies would invariably happen in the midst of seminars. Modi would enter in for MoU with a grand announcement, reminiscent of the sultan of the olden days stepping into the durbar with “hoshiyar, khabardar”. The top expert lecturing the seminar would be asked to stop, allow the MoUs to happen. The total amount of MoUs would be announced. Once MoUs and the photo session would end, Modi would move out, giving a successful smile, taking along with him most of the crowd that attended the seminar. The organizers would be forced to end the seminar midway. “Be assured, nothing of the sort will happen this time”, the bureaucrat tried to convince me, adding, “The focus, instead, would be on knowledge tie-ups – on manufacturing, sustainable development, R&D, human capital, service sector, renewable energy, ports, agribusiness.”
Why this sudden stop to the target-based approach? This is how he explained: “The target-based approach had its own negative points. Even in case the investor had implemented the project, the amount for which it was implemented would be quite small. An investor would sign a MoU for Rs 3,000 crore, but would invest just Rs 300 crore, reflecting his real capacity. It’s a strange predicament: 70 per cent of the investors who had signed up MoUs at 2009 summit have already invested in Gujarat, but for just 15 per cent of the total amount!” Another bureaucrat, who was a key person monitoring MoUs during all past summits, informed me, “I had personally advised the government to stop the target-based approach after the 2005 summit. But nobody cared. Everyone, including the then chief secretary D Rajagopalan, insisted that things should look big, even if they are not. We invited lot of negative publicity, though we had reason to rejoice.”
Yet another bureaucrat revealed, “Monitoring of MoUs has come to a standstill today.” At the past three review meetings on Vibrant Gujarat in Sachivalaya, held over the last six months under the captainship of Gujarat chief secretary AK Joti, “there was no discussion on the progress made at the summits, because the achievement in value terms looked extremely pathetic.” Why this? I wondered. And he answered, “Previously I was involved in monitoring the progress of each MoU, asking departments concerned to send the progress report regularly. I used to get good response. This helped keep keen investors alert. My role has changed. Instead of monitoring, I directly deal with investors, and know what’s the problem. My interaction with investors suggests that many of those who had signed up MoUs saw it as the government promise to give them cheap land. Some of them would just give a phone call, telling me to reserve a particular piece of land. As for the project per se,
few seemed to care.”

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