18% VGS 2011 projects dropped: Govt

Financial crunch, global recession reasons for projects not taking off, claims minister

The Gujarat government on Wednesday said that over 18 per cent of the projects, for which memorandums of understanding (MoUs) were signed during the 2011 Vibrant Gujarat Summit (VGS), have been dropped mainly because of financial crunch faced by the firms and global recession.

In 2011 investment commitment of staggering Rs  20.83 lakh crore ($450 billion) were committed during the biennial investor meet. This investment pledged by national and international corporate giants far higher than Rs  12.37 lakh crore proposed during VGS 2009.

Giving details on the status of MoUs signed during the 2011 VGS, state industries minister Saurabh Patel told the state assembly on Wednesday that 1,542 projects out of the total 8380, for which MoUs were signed during VGS 2011, have been dropped. The minister was replying to a question raised during question hour by Congress MLA Manilal Vaghela from Vadgam, Banaskantha.

"Of 8380 MoUs signed in 2011 VGS, 18.40 per cent projects have been dropped as on December 31, 2012. In numbers it comes to 1,542 projects," Patel said in the House.

He elaborated that of the total 2,905 (34.60%) projects have been commissioned that is they have begun operations, while 1417 (17%) projects were under implementation which means the firms have bought the land and are in the process of setting up the facility. As many as 2,516 projects were in its preliminary stage, that is firms were scouting for land on were yet to finalise their land, he added.

Minister however, ducked the question on the total cost of the projects commissioned. Explaining the reasons for projects being dropped Patel said, "There are many factors because of which the project could not materialise and were dropped. This include change in business environment or plan of the company, financial crunch, global recession to name a few."

In 2011, during the valedictory session of VGS, Gujarat chief minister Narendra Modi had said the investment pledged would provide employment to 52 lakh people. As many as 1400 foreign delegates from 101 nations had participated in the summit that year. However, in the 2013 edition of the VGS, the Modi government refrained from announcing the value of investments pledged and only declared the number of MoUs signed which was 17,790 against 8,380 in 2011.