Proposed industrial investments in Gujarat declined by over 50% between Jan and Sept 2014: Assocham

The state had attracted 280 investment proposals worth Rs 31,788 cr during Jan-Sept, 2014 which had decreased from Rs 69,847 cr

Despite the tall promises of investment intentions during the biennial Vibrant Gujarat Summits, industry body Assocham today claimed that total amount of proposed industrial investments in Gujarat has actually declined by over 50 per cent year-on-year(yoy) between January to September 2014. These include industrial entrepreneurs memorandum (IEMs), letter of intent (LOIs) and direct industrial licenses (DILs) received by the state in various sectors.

"Gujarat had attracted 280 investment proposals worth Rs 31,788 crore during January-September, 2014 which had decreased from Rs 69,847 crore thereby registering a year-on-year decline of 54.5 per cent vis-à-vis proposed industrial investments received by the state in the corresponding period last year," according to analysis of figures from Department of Industrial Policy & Promotion (DIPP) under the Union Ministry of Commerce and Industry conducted by The Associated Chambers of Commerce and Industry of India (Assocham).

"With a share of 8.8 per cent, Gujarat had ranked third in attracting total number of such foreign direct investment (FDI) proposals during January-September, 2014 which had declined from 15.5 per cent in the corresponding period last year," said DS Rawat, national secretary general of Assocham while releasing the chamber's analysis.

"Gujarat has significant potential to attract FDI in a wide variety of sectors like information technology, biotechnology, chemical, petrochemical, dyes, pharmaceutical, education and others," he added at the same time.

With a share of 47 per cent, Mauritius topped amid countries that invested FDI equity inflows in Gujarat as on December 31, 2013 followed by United States of America (13 per cent), Singapore (11 per cent), Cyprus (five per cent) and United Kingdom (four per cent).

Telecommunications attracted maximum FDI equity inflows in Gujarat with 18 per cent share followed by power (14 per cent), metallurgical industries (nine per cent), petroleum and natural gas (eight per cent) and services (eight per cent) as on December 31, 2013.

"There has been a sharp decline of about 20 per cent yoy in total amount of proposed industrial investments comprising industrial entrepreneurs memorandum (IEMs), letter of intent (LOIs) and direct industrial licenses (DILs) received by states across India in various sectors," according to the analysis carried out by the Assocham Economic Research Bureau (AERB).

India received 1,421 industrial investment proposals worth Rs 362,805 crore in this calendar year till September which had declined significantly from 1,906 proposals worth Rs 451,643 crore in the corresponding period last year, noted the analysis.

Interestingly, Chhattisgarh has acquired lion's share of about 45 per cent in the total amount of proposed investments with 24 investment proposals worth Rs 161,836 crore which had increased from Rs 31,067 crore thereby clocking a yoy growth rate of over 420 per cent, it added. Maharashtra (8.9 per cent), Gujarat (8.8 per cent), Odisha (5.9 per cent), Karnataka (5.4 per cent) and Andhra Pradesh (5.1 per cent) are other leading states in terms of share.

However, Madhya Pradesh, Odisha and Gujarat have registered significant decline in their share in total investment proposals.

Amid other states that registered significant growth in terms of proposed investments included - Punjab (184 per cent), Karnataka (166 per cent), Himachal Pradesh (108 per cent) and Assam (25 per cent), highlighted the analysis.

Services, construction development, telecommunications, computer software and hardware, drugs and pharmaceuticals, automobiles, chemicals (other than fertilizers), power, metallurgical industries, hotel and tourism are amid top 10 sectors attracting foreign direct investments (FDI) into India, the analysis further noted.