Vibrant Gujarat summit: High on fanfare, not so high on actual deals

Thousands of MoUs but no investments

The government is often quick to share the number of MoUs signed at the VGGS. For example, after the ninth edition ended in Gandhinagar in January 2019, the then CM Vijay Rupani had stated that a whopping 28,360 MoUs were signed during the summit, which was expected to generate 21 lakhs jobs.

However, Rupani skipped mentioning the specific amount of investments expected from the MoUs that year. There was no information given on the exact investment amount international investors committed to the state at the VGGS 2019.

Later, the then Deputy Chief Minister Nitin Patel had explained, “The figures of the investment are not important. It is still being calculated. But the important thing is that the MoUs will lead to employment generation, and boost economy.” But, what is significant is that there is not much clarity from the government on how many of these MoUs actually materialised.

“Events like this are organised by the government and also steered by the government due to which there is always a greater attempt by each successive government to beat their own targets. Hence, the number of MoUs shoots up each time losing touch with reality,” admitted J Singh, Chief Secretary of Gujarat.

Another Gujarat government official said on condition of anonymity that less than 10 per cent of investments may have fructified since the onset of the summits. This is also because many of them are in large infrastructure projects with long gestation periods, he pointed out.

Projects fail to take off

Multiple projects showcased at various VGG summits through the years have not moved forward. For instance, in January 2009, the then Narendra Modi-led Gujarat government had announced the formation of an industrial city in Dholera, about 100 km away from Ahmedabad. Later that year, MoUs were signed at the VGGS 2009 for projects in the Dholera Special Investment Region (SIR) as the Gujarat Special Investment Region Act 2009 came into effect, and Dholera Industrial City Development Ltd (DICDL) was formed.

Ten years later, when the Dholera SIR was showcased as an investment hub by the Gujarat government at Vibrant Gujarat summit 2019, most of the projects signed in 2009 VGGS were yet to hit the ground.

Similiarly, another MoU signed by an NRI owned company – Prasoon Mukherjee’s Universal Success Enterprise (USEL) – for a township, a 10,000 MW power plant, a port and projects in the Dholera SIR in the VGGS 2011 are yet to see the light of day.

Here’s an another example: there is no sign yet of the water city to be built near Dholera SIR by Hindustan Construction Company. This was the project to come up under the ₹40,000 crore MoU signed during VGGS 2019. Reportedly, HCC has missed the deadline to provide the down payment for the land allotted to the project in Dholera SIR.

Huge expenses

According to the Socio-Economic Report of Gujarat 2017-18, published by the state's Directorate of Economics and Statistics, the VGGS from its inception in 2003 till 2017, had witnessed the signing of MoUs for 76,512 projects.

As on March 31, 2017, out of the total projects promised until the 2015 summit, less than 50 per cent actually fructified. These projects were supposed to generate around 17 lakh jobs.

Yet, the Gujarat government continued to hold the summit with great pomp and fanfare spending lots of money. For example, in 2018, Rupani had informed the Gujarat Assembly that the state had spent ₹150.91 crore on the Vibrant Gujarat summits from 2015 to 2017.

A success story from VGGS

The VGGS, however, has had a positive impact on one sector. After the second edition of the summit in 2007, when Tata Motors set up its manufacturing plant in Sanand, this paved the way for more automobile manufacturers to invest in Gujarat.

After the 2007 summit, a second automobile giant entered Gujarat. After Tata Motors, the automotive tyre company CEAT set up its unit at Halol in 2010 with an investment of ₹700 crore, setting off the state on a journey towards becoming an automotive hub. The state believes the VGGS is closely tied to the growth of its auto industry valued at $3 billion.

Ford Motors invested ₹5,000 crore to set up a plant in Sanand as well in 2011 generating around 3,000 jobs. The company, however, wrapped up its Gujarat operations in 2021, sparking a protest among its workers. In 2022, Tata Motors acquired Ford India’s plant for ₹725 crore.

Last year, the state government asigned an MoU worth ₹13,000 crore with the Tata Group to establish an EV battery plant. In 2014, Suzuki Motors set up a ₹14,784 crore manufacturing plant followed by Honda Motorcycles and Scooters India (HMSI) and Hero MotoCorp in 2016.

In 2022, JCB too inaugurated its 44-acre plant in Halol, Panchmahal district in Central Gujarat. Today, Gujarat annually exports over eight lakh vehicles.

Other key investments at VGGS

As a precursor to the 10th edition of the VGGS, the state government has kickstarted several district level programmes for local traders and a series of curtain raiser events across multiple cities like Mumbai, Kolkata, Delhi, Bangalore etc. In the pre-summit events, Gujarat government has already signed MoUs with six leading industrial houses with a proposed influx of ₹1,360 crore investment into the state.

Among the investments, the state’s textile industry has attracted World Wide Safety Pvt Ltd, a company which manufactures industrial synthetic knitted gloves, is all set to inject ₹294 crores and create employment for approximately 1,800 individuals, as per the state government data.

In the pharmaceutical sector, Bio Genomics Ltd and OMNIBRX Biotechnology Pvt Ltd, is seeking to invest ₹290 crores with an expectation of adding 500 new jobs in Gujarat. Major engineering houses like ArcelorMittal Nippon Steel India Ltd, Ingersoll Rand India Ltd, and Terex India Pvt Ltd have declared an investment plan of ₹775 crore aimed at projects in the Sanand GIDC Phase-II for the years 2024-25.

Besides this, Gujarat government has signed an MoU with Mascot South Asia LLP for establishing an industrial park across 155 hectares in the Mandal taluka of Ahmedabad with a promised investment of ₹288.75 crore and another MoU has been signed for a proposed joint venture project of Pacem Umashree Pvt Ltd and a Brazilian company for the recycling of PET bottles. The project aims to manufacture FIBC jumbo bags and entails an investment of ₹161.78 crore.

History of VGGS

The VGGS was the brainchild of the Narendra Modi government, when he took over the Chief Minister in October 2001, after an earthquake shook the economy of the state. The same year the collapse of Madhavpura Mercantile Cooperative Bank added to the financial crisis.

The collapse had a ripple effect and impacted 133 more banks. The image of an economically crippled Gujarat dipped further after the 2002 communal riots. At that time, many business houses declared their intention to withdraw from the state.

In the backdrop of the crisis, the Vibrant Gujarat Summit was launched in 2003, with its first edition held in Tagore Hall, Ahmedabad. It housed about 700 people. The cost to the exchequer to organise such an extravagant meet has shot up today but also the proposed investments into the state have surged over the years.

Hailed as one of the cherished projects of Narendra Modi, the number of exhibitors and participants hit a record in 2005 and the exhibition area for the summit has been tripled. Two years later, at the 2007 summit, Modi suggested to the Tata Group to move the manufacturing of the low-cost Nano car to Gujarat from West Bengal following protests there.

Japan was the first partner country to participate in the 2009 summit, in which, industrialists Sunil Bharti Mittal and Anil Ambani praised Modi and said they saw a national-level leader in him. Over 600 foreign delegates, including political dignitaries, participated in the 2009 edition.

In October this year at an event marking 20 years of the summit in Ahmedabad, Modi hailed the transformation of the summit as an institution stating that, “the number of participants have grown to over 40,000 from 135 countries”.

A lot of expectations are pinned on this 10th edition as well, which is to be held from January 10th to 12th at Gandhinagar, the state capital.