Gujarat has been achieving a double-digit growth rate, registering an average rate of 10.14% in the last 5 years.
Gujarat has taken great strides in developing a resilient, responsive and vibrant society over the past two decades. One of the most progressive states of the country, Gujarat and its transformational model today is one of the key contributors towards shaping a New India. The corridors of the government offices during the lockdown experienced the state’s re-strategizing of the industrial growth model. On April 23, in a remarkable announcement, the state of Gujarat allowed opening of the export oriented industrial units to fulfil the existing orders. This step alone benefited nearly 5,000 export-oriented units in the state. Additional initiatives such as exemption from labor laws and MSME Ordinance widely contributed to restoring normalcy.
Gujarat is known for its resilience and dynamism. It is one of the most industrialised states in India. So, when the PM announced his vision for an ‘Atma Nirbhar Bharat’, Gujarat immediately took cues from it and re-engineered its strategy for industrial growth. The state since then has increased its investment in technological advancements for higher value addition across the supply chain.
Multiple meetings have been held with industry leaders and associations to identify areas and means for indigenous production. As part of its support to the industry, a team of government officials has been formed to monitor and fast track investment grounding in the state. The Chief Minister reviews the work of this team regularly and provides prompt decisions to avoid any time-lapse. Gujarat’s proactiveness is evident from the amount of FDI the state has attracted. Nearly 100 Fortune 500 companies are already present in the state. Gujarat’s FDI saw a massive surge of 240% for FY 19-20, which is the highest amongst any Indian state. This number stands at 14% for rest of India. Other majors such as BASF, Arcelor Mittal, Nayara, etc. have already announced their expansion plans.
In addition to the FDI numbers, Gujarat also accounted for 51% of the total share of the investment proposed under IEMs (Industrial Entrepreneur Memorandum) in the year 2019. While India saw an increase of 48% in the proposed investment in 2019, Gujarat recorded a growth of 333%. The investments have also been in diversified sectors including textiles, chemicals, auto & auto components, plastics, energy & power, food processing amongst others. What is more astonishing here is that the IEMs were received for setting up units in 28 out of the 33 districts in the state. This symbolizes the state government’s effort for inclusive and balanced regional development.
The investments have also been in diversified sectors including textiles, chemicals, auto & auto components, plastics, energy & power, food processing amongst others.
So, what makes Gujarat unique? Simple, the government’s raison d’etre is to work towards the prosperity of its citizens through forward-looking regulations and initiatives. Gujarat provides a conducive industrial ecosystem, transparent and investor friendly policies, robust industrial infrastructure and relentless support to the enterprises in doing business. Over the years, the state has been ranked amongst the national leaders in Ease of Doing Business for its business-friendly and investment-encouraging environment. It is because of this reason that Gujarat has been constantly achieving double digit growth rate. In the last 5 years, the state registered an average growth rate of 10.14% at constant price.
Gujarat is strategically located with easy access to India’s hinterland and to MESA. A company which sets up operations in Gujarat naturally gets access to these growing markets. In order to support business growth, the state has developed 48 ports along the 1600 km coastline and a widespread network of railroad connectivity. In terms of the industrial infrastructure within the state, Gujarat has established Special Investment Regions and Smart Industrial Cities, through projects like Delhi Mumbai Industrial Corridor, almost 40% of which passes through Gujarat; and a Dedicated Freight Corridor which will ease the pressure on passenger tracks and facilitate goods transfer enormously. The DMIC artery will help develop Special Investment Regions like Dholera, Mandal Becharaji, PCPIR. Some of the marquee infrastructure projects are highlighted below:
- The USD 90 billion Dedicated Freight corridor between Delhi and Mumbai out of which 36% passes through Gujarat connects major industrial nodes of the state. Today, 67% of the work is already complete and part of it will be operational in coming months.
- India’s largest industrial Greenfield development of over 920 sq. km at Dholera Special Investment Region. The entire region has a blanket environmental clearance which allows land allotment to be completed to an industry in 17 days. The region is expected to attract investment to the tune of over USD 13 billion. The World’s largest Solar Park (5 GW) is now being developed at Dholera SIR.
- Spread across 453 sq. km, India’s first dedicated Petroleum, Chemical and Petrochemical Investment Region (PCPIR) in Dahej has already attracted investments worth USD 11 billion creating employment for 1.32 lakh people.
- Emerging as world’s largest Auto Hub, Mandal Becharaji Special Investment Region (MBSIR), is a hotbed for Japanese automobile and auto component manufacturing industries. Companies such as Suzuki Motor Corp., Honda Motorcycles and Scooter India Pvt. Ltd, and Toyota Tsusho India have established their units within MBSIR. India’s 1st Lithium-Ion Battery Plant is being planned to be set up within MBSIR, by a consortium of Suzuki, Toshiba and Denso.
- India’s first Financial Tec City (GIFT) in Gandhinagar. The first phase of the project alone has attracted investment commitments of USD 1.57 billion and has a work force of 10,000+ employees working in around 225 companies. GIFT SEZ is the only IFSC in India and the average daily volume traded through the IFSC on the international exchanges stands at USD 4 billion. The London Stock Exchange and the National Stock Exchange of India signed an MoU for dual listing of masala bonds to promote bilateral trade and mutual investment.
- Diamond Research & Mercantile City being built on 2,000 acres of land in Surat. DREAM City will be a hub for diamond polishing and allied industries.
- It is to this fact that several locations from Gujarat have been included in a recently released report on ‘Great Places of Manufacturing in India’ by Invest India.
A conscious effort on the part of the government has been to constantly enhance and upscale the skill of the manpower. The government has been investing in education, skilling programs and women employment initiatives to create a pool of directly employable resources. With focus and belief in the need for a sustainable growth, Gujarat is planning to increase its renewable energy capacity to 30GW which is nearly the current power consumption of the state. In this state of the pandemic, Gujarat is not only ready to ground more investment, but is determined to strengthen itself further to catalyze the revival of its enterprise. Gujarat based industries have already started to consume 80% of their average monthly gas. This indicates restoration of normalcy in doing business.
Indicating a steady revival of industrial activities, the power consumption by the industrial estates in Gujarat is now inching towards the pre-lockdown levels. On 31 March 2020, the aggregate consumption had drastically fallen to 30.27 MUs. At that time, only those units were allowed to operate, which dealt with essential commodities, such as food and medicines, or pertaining to continuous manufacturing processes. After a month of lockdown, industrial activities resumed in Gujarat from 20th April 2020. Adhering to central guidelines, Government of Gujarat decided to relax the lockdown in select areas of the state with regards to industrial activities. On 7 May 2020, the power consumption was 145 MUs and as the lockdown was relaxed in several industrial areas the power consumption rose to 189.2 MUs. After relaxations were given power consumption in the state reached 87.91% of the normal time.
Over the past three months, Industries and Mines Department along with the state’s nodal agency for investment promotion -Industrial Extension Bureau (iNDEXTb) have had successful interactions through webinars and video conferences with potential investors, leading national & international trade bodies, embassy /consulate officials and government stakeholders to provide business support to companies. The investors were informed of the key value propositions offered by Gujarat which include proactive and forward-looking policies, robust framework of ease of doing business and hand-holding.
Within a short span of approximately six months, 30 companies from countries such as the USA, UK, Germany, South Korea, Japan, Taiwan etc. have shown interest in establishing their business presence in the state. With the new Industrial policy coming soon, the state is looking to unlock a diverse range of high impact & employment generating investment opportunities. The policy aims to specifically target industries with a high value addition potential and also give a thrust to companies for boosting exports. Gujarat inclusive as well as exclusive. Walking the tight-rope of economic progress with great capability, Gujarat is maintaining the perfect balance when it comes to opportunities and exposure, no matter which part of the society or income strata one comes from. Huge emphasis is being laid on strengthening our foundations in all dimensions of life such as quality education, affordable housing, accessible healthcare and world-class sports facilities.
Gujarat is a progressive state and believes in maneuvering its way through no matter what jolt may hit its economy. It rests on the zeal of its people, the faith of its partners and the hard work of its government. Gujarat is turning into a land of infinite opportunities. The number of businesses is rising and so is the number of jobs created, every year.
By 2030, Gujarat will achieve our big target of Zero Youth Unemployment Rate. With a new vision firmly held in sight, the state is perfectly positioned to accelerate India’s growth in the 21st century. It is propelling India to the global stage of becoming a superpower. This is the moment to invest in Gujarat’s future.
Sudhir S. Raval is a veteran journalist and columnist from Gujarat and Consulting Editor of iTV Network, New Delhi