As per the latest reports, in all the eight editions put together, the Gujarat government
has declared that it has signed 51,378 memorandums of understanding (MOU) since the first summit in 2003, worth a whopping Rs84 lakh crore. The government in initial years used to publish the data, but of late no such efforts are made and mere statements are given.
It will be apt to remember, the GDP of India
currently stands at nearly Rs170 lakh crore. The government claims, 57% of these signed MOUs
are either implemented or under implementation. We have no option but to believe this claim as no concrete data is available in any of the Gujarat government websites including www.vibrantgujarat.com. But they forgot to remove the data from one place, the website of the Commissionerate of Industries, government of Gujara
It gives an honest picture by putting out the actual data. From 1 January 1983 to 30 September 2016, a total of 6,251 projects were implemented in Gujarat with a cumulative investment of Rs2.76 lakh crore. It generated 10.67 lakh jobs. Further, it states, another 4,033 projects are under implementation with a total investment of Rs951,980 crore, which is projected to generate another 9.30 lakh jobs. Note the stark difference in the generation of employment. In the already implemented projects, every one crore rupees invested generated approximately four jobs whereas the projects under implementation will generate less than one job for every one crore rupees invested!
Let us go back to www.vibrantgujarat.com
and check the tab, which says approved projects. Approved projects are those, which have signed LOIs and MOUs committing to start a new business in Gujarat with fresh investments. Once opened, a lot of different heads can be seen like urban development, road and railways, etc. Just for a fact check, open the road and railway tab and you will see a lot of construction companies’ names with address. I checked one particular company.
Let us check then how come the Gujarat government is projecting so many MOUs and letters of intent (LOI), which is in stark contrast with the actual figures? This is a very interesting story.
Out of curiosity, I went to www.zaubacorp.com
to check the details of this particular company, which turned out to be a new one (three years old), formed as a subsidiary of an infrastructure development group with a paid up and share capital of Rs5 lakh each. I was wondering what kind of investments a company with such small paid up capital will make in roads and railways. Then this name caught my attention – NHAI. Wow!
NHAI signed an MOU with the Gujarat government! That was the eureka moment. Just visit www.nhai.org and check “establishment” and “vision” to get a clear idea.
National Highway Authority of India-NHAI is the nodal agency, which takes care of the development and maintenance of National Highways. There are two things to be noticed here –
a) National Highways are a central government subject under Ministry of Road Transport & Highways and b) NHAI never invests directly in any project. NHAI, once it identifies the area for either re-development or new construction, auctions the project and invites tenders. Technically and financially qualified bidders will get the contract for the construction.
Then how come NHAI signed an MOU with the Gujarat government to invest in the state? The answer is that NHAI is not investing anything. Technically and financially sound engineering construction companies who already won the contract from NHAI after bidding will offload their big projects to small companies like the one mentioned earlier. NHAI gives funds to start a project, called mobilisation advance. With that the sub-contractor starts the work and submits his bills monthly and claim the dues in a stipulated time till the project is finished. In a nutshell, what the Gujarat government is projecting as investment generated through its much hyped Vibrant Gujarat Summit is a central government funded highway development project, which has nothing to do with either Gujarat government or the Summit.
To clarify the unusually high number of MOUs, let us check one more head – Urban Development. Check the name and details of the companies mentioned. After checking more than 37 companies mentioned and speaking to 14 companies over phone, we can say these are small-time builders who have been asked by officials to sign up MOUs for the small-scale housing or commercial buildings they are developing in their respective localities. One gentleman, requesting anonymity, said almost all the builders in Ahmedabad signed up MOUs, irrespective of the size of the company. And whether they sign up these MOUs or not, that is the business they are into since years!
The state government says all investments came to Gujarat through foreign direct investment (FDI)
route. That is what Mr Modi claimed as Gujarat CM, “Gujarat is the growth engine of India, which attracts maximum FDI.”
In case of GDP, with Rs10.94 lakh crore, forget other states, Gujarat is even behind UP.
The Gujarat’s public debt has grown nearly 3.6 times since 2006 and almost five times since 2001. The State is paying Rs44.15 crore per day as interest on outstanding debt, which is again public money. The latest available data on this is the Government budget document. The total interest outflow (http://financedepartment.gujarat.gov.in/Documents/Bud-Eng_716_2017-2-23_167.pdf
) and the interest Gujarat is paying on its debt is one of the highest in the country. Interest payment on public debt as percentage of revenue receipt stands at 14.32% on 2016-17. And total liabilities stands at Rs2.43 lakh crore as on 31 March 2017.
Mr Modi had a dream to clean up India when he became Prime Minister. A state in which he was the Chief Minister for more than 13 years stands at 21st place in the country when it comes to in-house latrine facility. Small and poor North Eastern states are much ahead of Mr Modi’s home state. Interestingly, all the states where Bharatiya Janata Party (BJP) was in in power for long are lagging much behind. And the states where BJP was in power at some point of time is the worst in this count.
The same report shows that the state has just 8.8% of population owning a computer or laptop and Gujarat stands at 19th position in the country in this parameter. And the same state stands at 13th place in the number of households, which uses computers or laptops with internet connection. In mobile and fixed line, Gujarat is at 20th place. Fifteen states are ahead of Gujarat when it comes to families owning a car. If one counts the number of families who owns all of the things mentioned here, 18 other states are richer than Gujarat.
Developed Gujarat stands at 16th place when it comes to electricity as the primary source of lighting in households. Remember, the three biggest corporate houses have put up massive power plants in the state for which Mr Modi gave them the land at such a price that was never heard of before, besides other tax soaps.
Literacy rate? A proud 17th place in overall literacy rate (Population of 7-plus age group). And the amazing fact is that in his first 10 years as Chief Minister, Mr Modi managed to bring down the overall literacy rate from 79.31% to 69.14%. About 87% of the male population was literate in 2001. It came down to 79.66%. And females? It fell from 70.73% to 57.8%. A good 12.75% reduction. (http://niti.gov.in/content/literacy-rate-7years
About 112 out of every 1 lakh women die in Gujarat during child birth.
July 20, 2017 at 9:21 pm
The Gujarat model has been projected as a ‘ model ‘ to be followed by other states. But there are many flaws as Amart