Gujarat most investor-friendly state in India

Vol 3, PW 22 (24 Nov 99) People & Policy
     

If you didnt know it before, you know it now: Gujarat is the most investor-friendly state in India, and the figures below prove it.

A major complaint of foreign investors in India is the length of time it takes to see investment proposals translate into bricks and mortar. Figures from the countrys Ministry of Trade reveal that on average only 40% of all Foreign Direct Investment (FDI) proposals make it to the project stage.

For investors in Gujarat, the problem is less acute than elsewhere. See below:- All figures in RsCr (Rs1cr = $232,558) State Investment Aug 95 Aug 96 Aug 97 Oct 98 Apr 99 Proposed 58,756 79,794 94,158 106,752 10,475 Implementation 26,165 31,088 38,760 32,506 38,268 Andhra.

P (%) 44.53% 38.96% 41.16% 30.45% 36.98% Proposed 73,980 110,840 123,803 110,259 103,662 Implementation 26,353 31,502 44,203 42,964 51,134 Karnataka (%) 35.62% 28.42% 35.70% 38.97% 49.33% Proposed 63,118 84,957 127,492 139,142 141088 Implementation 15,743 23,901 24,444 23,798 26,240 Tamil Nadu (%) 24.94% 28.13% 19.96% 17.10% 18.60% Proposed 90,788 111,851 133,786 137,896 146,870 Implementation 62,673 69,564 75,740 70,791 77,603 Gujarat (%) 69.03% 62.19% 56.61% 51.34% 52.48% Proposed 91,813 105,609 134,128 139,189 152,375 Implementation 43,806 48,828 60,186 75,087 75,145 Maharashtra (%) 47.71% 46.23% 44.87% 53.95% 49.32% The most disappointing findings are from Tamil Nadu, which projects itself as the powerhouse of southern India. By the end of the last financial year, Tamil Nadu received proposals for Foreign Direct Investment (FDI) totalling $32bn.

Of that only $6bn, or 18%, found its way into actual projects. Gujarat emerges the star performer.

Project implementation in the last financial year was 52.48% of promised FDI, significantly down from the 1995 figure of 69.03%, but leagues ahead of other states.