Gujarat's growth story crumbles, ranked below UP in investment

Gujarat, the home state of Prime Minister Narendra Modi and portrayed as ‘growth engine’ of India has witnessed a steep fall in new investments for the second quarter of 2014-15 compared to the first quarter of the same fiscal.

According to the analysis done by the India’s premier independent research body, Centre for Monitoring Indian Economy (CMIE), while Tamil Nadu topped the states with highest announcement of new investments, Gujarat ranked 8th even below Uttar Pradesh and Rajasthan. 

It further said that announcement of new investments in Gujarat was lower in the September ended quarter at Rs  6,530 crore against Rs  17,650 crore in quarter ended June 2014.

Analyst Pradnya Deo has stated that Gujarat ranked 8th in terms of new investments during the second quarter of FY15.

“Investments worth Rs  28.5 billion were seen in the shipping transport infrastructure segment alone. Adani Ports & Special Economic Zone Ltd announced development of a fourth container terminal at the Mundra port at a cost of Rs 2,100 crore, with 1.3 million TEUs (twenty-foot equivalent unit) handling capacity. 

Reliance Industries Ltd also announced expansion of the Jamnagar Liquid Jetty Project, by setting up an additional berth having capacity to handle 8 mtpa of liquid products and petrochemicals. The Rs 750 crore project is awaiting Terms of Reference (ToR) from the Ministry of Environment & Forests (MoEF),” Deo stated in the report.

Giving an overall view the CMIE analysis stated that new investments in India grew by 95.4 per cent y-o-y to Rs  217,400 crore in the quarter ended September 2014, highest in the last nine quarters. 

“These were largely led by announcement of investments worth Rs 104,800 crore in the power sector,” the report added.

Tamil Nadu topped the charts with new investments worth Rs 37,320 crore (Rs 373.20 billion), highest for the state in the past four years. 

Important contributors for this include Ministry of New & Renewable Energy (MNRE) that announced setting up a 4,000 Mw Tamil Nadu Solar Ultra Mega Power Project (UMPP) at Rs  26,000 crore and State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) that would set up a thermal power project at Tuticorin, with an investment of Rs  3,200 crore.

With a capacity of 800 mw, the plant will be a part of the Madurai-Thoothukudi Industrial Corridor. 

Andhra Pradesh stood second with substantial new investments worth Rs  33,900 crore. Of which, Rs  17,050 crore (nearly 50 per cent) belonged to the solar energy sector. 

Third in the list was Maharashtra with new investments worth Rs  26760 crore. This includes announcement of a dry port at Aurangabad by Jawaharlal Nehru Port Trust (JNPT), with an investment of Rs  15000 crore.

JNPT has also announced to develop a dry port at Wardha. Goods from these two dry ports shall be sent to the JNPT port for further exports by rail network. 

Karnataka which ranked fourth saw new investments worth Rs  126.9 billion, mainly in the steel industry.

Interestingly, Uttar Pradesh at fifth place saw the highest amount of new investments in the quarter in the past four years, at Rs  12,610 crore. This includes approval of the Rs 5,280 crore Meja Phase II Thermal Power Project by the state government, entailing two units of 660 Mw each. 

In Rajasthan (sixth place), new investments worth Rs  12590 crore were also led by the power sector mainly by Adani Power which announced to expand the capacity at its Kawai Coal Based Thermal Plant by 1,600 mw (two units of 800 mw each) to 2,920 mw, at a cost of Rs  9100 crore. New investments in Telangana at 7th position were comparatively lower than Andhra Pradesh at Rs 10,740 crore.