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Actual investment not matching with claims in U’khand

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By ARUN PRATAP SINGH

DEHRADUN, 31 Aug: Last year it was in the month of October that the Uttarakhand Government had organised Investors Summit in Dehradun with much fanfare, and which was addressed even by Prime Minister, Narendra Modi himself. Soon after the summit, the government had started claiming signing of Memorandums of Understanding (MoUs) with the industrialists to the tune of Rs One lakh crores. By the end of the summit itself, the government was claiming that proposals had been received for investment worth Rs 1,24,000 crores. However, the ground reality is not as rosy as had been claimed by the Government through all these months since the Summit. In the recent investors meet held (Invest North Summit) in Bengaluru, Chief Minister Trivendra Singh claimed that MoUs for investment to the tune of Rs 1.24 lakh crores had been signed since the first ever Investors Summit of Uttarakhand. However, sources within the government admit that much of the promised investment is yet to come. They further admit that since the summit held last year, the actual investment made on the ground is close to only Rs 17,000 crores so far. Indirectly, the CM too admitted this in Bengaluru, adding that the government was targeting an investment of close to Rs 40,000 crores in near future. So, in reality, the actual investment may not reach anywhere near the claimed promised investments. However, to be fair to the government, it would be appropriate to say here that Uttarakhand did not seem to have potential and scope for mega investment in industry due to various reasons. It is a small state and has many limitations. Therefore despite good and sincere efforts on part of the government and its officials, the actual investment has not been able to match the claims. Some promised investment takes time to actually fructify. But it is a fact that there is a huge gap between the claims and the actual on ground investment. There are many factors responsible for this. It would have been better for the government and its officers concerned to realise the limitations of the scope and the potential of industrial growth in the state, before claiming mega investment promises. The biggest obstacle is the limited land availability for industry in the state. Two thirds of the geographical area of the state falls under the forests, even when a significant part of that is not actual forest. Big industry needs huge land, which is simply not available. One reason why the state was able to attract huge investment of more than Rs 30,000 crores during the ND Tiwari Government’s rule was the special status granted to Uttarakhand and the tax holiday that was part of the special package granted to Uttarakhand, by the then Atal Bihari Vajpayee Government. Such tax holiday and the special status do not exist now, though some minor subsidies on purchase of equipment and promise of minor other rebates and claims of single window clearance system are still there. At the time of formation of the state, Uttarakhand was a power surplus state and not only this, the power tariff was among the lowest in the country which attracted industry in a big way then. At present however, the state is neither power surplus nor the power is cheapest anymore here. Despite huge potential, power generation has not grown much in recent past. Many of the under construction hydropower projects are held up due to various reasons and new projects are not coming up. Connectivity is key factor for attracting capital in a state. Connectivity remains a critical issue in Uttarakhand. The government has been giving special impetus towards investment in the hills, but road and good internet connectivity are presently not adequate for huge investment in the hills. Infrastructure plays a major role in attracting and sustaining industrial setups in any state. The infrastructure in Uttarakhand needs much faster growth to be able to turn promised investment into reality. Dehradun, Haridwar, Nainital and Udham Singh Nagar districts hold greater scope of medium to large scale industrial setups but the road, rail and air connectivity must improve tremendously for large scale investment. Cities and peripheral areas of these cities also need better road, power and internet connectivity. Then there is the question of a mechanism in place towards ensuring the fructification of promised investment. Of course, presently, the Chief Secretary is ostensibly monitoring the process but political and certain decisions are not possible from his level. The investors facing difficulties prefer quick redressal and faster political decisions, and with the much overburdened CM also holding the charge of Industry, they are never sure who else to meet for redressal of their problems. There is a need to constitute some top level task force consisting of not only top officers but headed by easily approachable ministers whom the investors can easily approach for resolution of their problems. As far as investment in the hills is concerned, the government has rightly declared tourism and food processing as key focus areas. However, to sustain large scale food and fruit processing industry in the hills, one also has to ensure good, large scale production of agriculture and horticulture produce. For this the horticulture and agriculture also require out of the box approach and investment to ensure required growth rate in agriculture sector. So far, no such focussed initiative has been taken to promote this. Tourism sector certainly has very good potential, and this is one sector that can receive huge private sector investment. However, the government still needs to create right kind of environment and human resource skills to ensure growth. This is not happening. In Uttarakhand, everyone likes to mention tourism as key sector, but the way the government manages the sector and its failures on this count are evident from certain facts. The government has two corporations, namely Garhwal Mandal Vikas Nigam and Kumaon Mandal Vikas Nigam working primarily in the tourism sector and both are running in huge losses. They are incurring so much loss that the government has recently given out many of the guest houses and hotels belonging to Garhwal Mandal Vikas Nigam including Hotel Drona of Dehradun on long term lease! Finally, there is another huge challenge staring at everyone still hoping for mega investment in the state. With economic recession in play in Indian economy at present, it would be even bigger challenge to attract fresh investment or to ensure fructification of the MoUs signed after the Investors Summit of last year.