Industry and investment-friendly policies made it No 1 even amid pandemic and the momentum will only continue
Nilesh Shukla | June 7, 2021
Due to the Covid-19 pandemic, since March 2020 the economy of not only India but the entire world has weakened tremendously and a major factor is unemployment. The challenge before the nation is how to push the economic growth in next financial year. As foreign direct investment can provide a major boost to the economy, the central government has taken several measures for FDI policy reforms. Investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.
In this context, the Government of Gujarat, under the leadership of chief minister Vijay Rupani, has set an example for other states on how to handle both the pandemic and the economy simultaneously. According to official data released late last month, Gujarat has received the highest FDI during FY 2020-21 with 37% share of the total FDI equity inflows, followed by Maharashtra (27%) and Karnataka (13%). Majority of the equity inflow of Gujarat has been reported in the Computer Software & Hardware sector (94%). Despite the health crisis, the country’s inflows grew by 19 percent year-on-year to a record $59.64 billion. Gujarat recorded garnered Rs 1.77 lakh crore among them.
Gujarat attracts investments due to its industrial and investment friendly policy. It is one of the leading industrialised states in India and one of the fastest growing economies in the world. One of the most progressive states of the country, Gujarat and its transformational model today is one of the key contributors towards shaping a New India. The corridors of the government offices during the lockdown experienced the state’s re-strategizing of the industrial growth model.
Gujarat is not only among the pioneers of India’s growth story but also a leader in various sectors including petrochemicals, textiles, pharmaceuticals, automobiles, and gems and jewellery, and now the government is focusing on computer software and hardware.
Although the 2021 edition of the biennial Vibrant Summit had been called off because of the pandemic, the intent is to keep the investment momentum going. The state government has written personal letters to the chairmen and CEOs of over 700 global companies based in over 50 countries, inviting them to invest in Gujarat. The companies which have been approached are those which are looking to expand their operations or shift their units out of China in the post-Covid era. These companies are from about 40 diverse sectors ranging from pharmaceuticals to finance technology (fintech).
The government of India is also partnering with the state government in its endeavour to attract fresh investment. Union ministries and departments like department for promotion of industry and internal trade (DPIIT), department of electronics & IT, and the ministries of textiles, pharmaceuticals and chemicals have assured full support to the latest endeavour by the state government.
Armed with a new industrial policy which offers several incentives to businesses, plug-and-play infrastructure for industries at the special investment regions (SIR) of Becharaji and Dahej and the GIFT city which is a hub for fintech companies, the Gujarat government aims to provide the best business environment to companies from a variety of sectors.
In India, Gujarat has been the most preferred business and investment destination for large multinationals for the past several years. The state government has set out a target to attract at least 10% of these companies who are looking to set up new facilities in the ASEAN region.
Shukla is Joint Director of Information, Government of Gujarat in New Delhi.
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