Gujarat’s success stories on the development and good governance front under Narendra Modi’s leadership have been applauded by leaders, economists and intellectuals in all corners of the country. At present, no leader from any party can match his achievements. Moreover, he has openly challenged the UPA government to compete with his government on development of various sectors.  While corruption and inefficiency have become a big headache for the UPA government, Modi chants the mantra of development and good governance. Our nation definitely needs a dynamic leader like him. Modifying the famous quote of Netaji Subhas Chandra Bose, Modi says “Give me support, I will give you development.”

Modi has now focused his vision globally. The state government, along with Infrastructure Leasing & Financial Services Ltd. (IL&FS), has set up a company called Gujarat International Finance Tec-City Company Limited (GIFTCL) for developing a global financial hub in Gandhinagar. Last year, this company signed a memorandum of cooperation (MoC) with Singapore Cooperation Enterprises (SCE), a Government of Singapore agency. SCE is a nodal agency to promote international cooperation between Singapore government agencies and private enterprises with development agencies in other countries.

The Gujarat government has developed a system under which Indian corporate houses looking for mergers and acquisitions overseas or financial institutions do not have to tie up with foreign banks any longer just for funding in foreign exchange – all such facilities will be available in Gandhinagar from GIFTCL. The union ministry of commerce and industry has already given its nod to this company.
 

The last decade has seen an unprecedented growth in India’s financial services sector. It employs over three million people, constitutes about 5% of the GDP and has an estimated market capitalisation of over $200 billion. As India experiences continued economic growth, the financial sector could generate about 10-11 million jobs and a GDP contribution of $350-400 billion by 2020. With a sustained growth and rapid development in technology and infrastructure, an increasing share of financial services would get centralised. McKinsey & Company’ s market assessment report estimates potential of about 6 million centralised jobs across multiple service roles.

Several developed countries have successfully established hi-tech financial hubs, which over time have functioned as international financial services centers. These centres provide suitable regulatory regimes and create a business environment to promote talent and increase capital flow. As they develop they create significant economic value for their domestic economies, e.g. London and New York account for 10% of the GDP and about 5% of jobs. Emerging financial services centres like Singapore and Hong Kong have achieved similar levels of concentration of economic activity over short periods of time.

Talking about the proposed global financial hub at Gandhinagar, Modi has said: “The vision of Gujarat would be incomplete without capitalising on the in-house financial business acumen. To tie-up with technology, to create a meet the needs of modern Gujarat, modern India and to create a space in the global financial world… that is my dream.”

Gujarat aspires to cater to India’s large financial services potential by offering global firms, world class infrastructure and facilities will attract the top talent in the country by providing the finest quality of life.

According to a senior officer of the Gujarat government, the work on the proposed Rs 78,000-crore nano city has already started, and the first occupant may move in by March. GIFT will create leading-edge infrastructure services and platforms that will offer financial services enterprises a significant competitive advantage to operate regionally and globally.

A number of companies have took interest to invest in GIFT and signed MoUs of approximate Rs.12,000 crore during the 5th Vibrant Gujarat 2011 Global Summit.

The total built-up area of this project will be 62 million square feet while land area of GIFT city is spread over in 673 acres.

Mumbai, the financial capital of the country, may soon have serious competition from Gandhinagar as a number of industrialists, from India as well as countries like Japan, China and Sweden have shown interest in establishing their business in Gujarat as the state government is not only providing sufficient infrastructure but is also creating positive environment for overall growth. 

India is not able to fully realize it vast potential in financial services because our cities do not have the required infrastructure. If India wants to compete with International financial hubs, our cities will have to provide global standards in infrastructure, office space, internet and telecom connectivity and lifestyle opportunities which would attract talent. Gujarat is the only state which has taken the initiative and is now capable of providing all these services. The state government has explored these opportunities by setting up GIFT, which would become an alternative to Hong Kong for providing International Financial services in Asia.