The success of the Vibrant Gujarat Summit has often earned Gujarat the moniker of ‘Davos of the East’, drawing parallels with the Swiss city that hosts the World Economic Forum Summit. This year’s Vibrant Gujarat Global Summit is to be held between January 10-12 and will mark an international celebration of the Gujarat Model, graced by foreign dignitaries including state heads such as UAE President Sheikh Mohamed bin Zayed al Nahyan, top global investors and CEOs of major Indian and foreign businesses.
The enthusiasm is warranted. Two decades ago, before the emergence of the biennial Vibrant Gujarat, the state’s economy was in shambles. Hopelessness had gripped the air with the bludgeoning effect of the Bhuj earthquake in 2001 and later, the Godhra riots which caused tremendous loss of life and property, painting an unwelcome image for investors. At this point, the state was also crippled with droughts, power outages and relatively poor connectivity and infrastructure.
But in the past 20 years, since the first edition of Vibrant Gujarat held under then Chief Minister Narendra Modi, the state’s fortunes have witnessed a jaw-dropping transformation. This dramatic turnaround is evident in almost every aspect of Gujarat’s socio-economic indicators, its impressive industrial output and the state of its infrastructure.
Today, Gujarat is one of the fastest-growing states and the fourth largest state in India in terms of economic size, with the highest ease of doing business ranking. The state’s GSDP shot up from about $11 billion in 2001 to about $272 billion in 2022, marking a whopping 2400 per cent rise. Per capita incomes stand at $3,529, higher than the national average of $2,847. Further, Gujarat accounts for 77 per cent of petroleum oils exports, 33 per cent of drug manufacturing capacity, and at 33 per cent, it is the largest contributor to the country’s total exports. It also accounted for 17 per cent of Foreign direct investment (FDI) flows in India in 2022-23.
In 2023, Gujarat had attracted investments of nearly Rs 8 lakh crore or $96 billion in the four years preceding that year. This time too, leading up to the summit, Gujarat has garnered substantial investment commitments to the tune of $86 billion. Compare this with the first edition of Vibrant Gujarat in 2003 when investments of Rs 66,000 crore were proposed. These agreements involve 58 companies, including a joint venture with steelmaker ArcelorMittal, spanning key sectors like energy, oil and gas, and chemicals. The summit has also acquired a highly effective character as in the two editions of 2017 and 2019, with a total commitment of Rs 20 lakh crore, the average execution rate reported by government officials was 75 per cent, which would not have been possible without systemic overhauls.
With the Vibrant Gujarat Summit and systemic overhauls to facilitate businesses, the government of Gujarat kickstarted what would be one of India’s greatest growth engines. The Narendra Modi government of the day in the 2000s realised that to attract industries, Gujarat needed a major overhaul starting with its power and water woes.
In 2001, the state of its power sector was grim. Power deficits brought upon the state prolonged power outages. Gujarat State Electricity Board faced severe financial turmoil, experiencing a loss exceeding Rs 2,200 crore. During that fiscal year, the GSEB incurred interest costs amounting to approximately Rs 1,227 crore. The government addressed power outages, with a revamp of technology used, which reduced transmission losses. Within five years, Gujarat had turned into a power surplus state and has not looked back since. Gujarat is power abundant with around 45 GW power generation capacity as against the average demand of 25 GW.
Meanwhile, the drought-ridden portions of Gujarat were transformed into hydrated land, increasing industrial and agricultural output. This water scarcity was addressed with massive canal and dam projects like the Narmada Main Canal, the Sujalam Sufalam Yojana, the Sauni Yojana and the Sardar Sarovar Dam covering the length and breadth of the state.
The government proceeded with addressing delays that businesses struggled with. Land acquisition and infamous clearance delays of six months to one year were done away with in a revolutionary manner. The single window clearance system was improved, with a centralised online portal for businesses to apply and various concerned departments would be prompted to process these applications within short timeframes. The government also ensured that businesses were assisted in their endeavour to establish their bases.
Further, the government created a land bank which essentially includes estates of land acquired beforehand to be offered to the industries right away, eliminating the protracted land acquisition-related delays in setting up shop. This revolutionised Gujarat’s standing as a competitive business-friendly destination. A notable instance of this successful approach is exemplified by the Tata Nano factory. In the process of relocating from West Bengal and weighing various options, the factory ultimately chose Gujarat. The swift mobilisation of government support and the efficient transfer of land within days played a pivotal role in sealing the deal.
Gujarat leads in energy infrastructure with a 2,700-kilometre gas grid. On the logistics front, it features extensive road networks and 49 ports including a major port handling 40 per cent of India’s cargo. It also has an enhanced 5,220+ kilometre railway network, and 19 airports, including 4 international ones. Upcoming projects include the Mumbai-Ahmedabad high-speed rail, the famed bullet train project and India’s largest airport in Dholera— a mega project in the works.
The Dholera SIR mega project is another enormous undertaking of the Gujarat government. This special investment region is a greenfield industrial planned city in Ahmedabad with airport and port connectivity along with impeccable metro and road access and is taking shape fast.
Owing to its phenomenal rise, the state has bagged some of the biggest mega projects which are further attracting investors. The most notable mega project is the Gujarat International Finance Tec-City (GIFT), envisioned by PM Modi. This smart city, aiming to be India’s premier financial capital, is rapidly expanding from 1,065 acres to nearly 3,365 acres. GIFT was recently exempted from the state’s liquor ban to attract global investors. Another significant initiative is the DREAM City in Surat, focused on the Indian diamond industry, housing the world’s largest office building, the Surat Diamond Bourse.
Gujarat is also undertaking the Khavda Renewable Energy Park, a massive hybrid renewable energy project with an estimated cost of $2.26 billion. In three years, this project aims to become the world’s largest operational renewable energy park, covering an area almost the size of Singapore, with a remarkable power generation capacity of 30 gigawatts. These projects are set to be a major attraction for investors at the summit.
Vibrant Gujarat has an exceptional legacy and has played an instrumental role in the economic turnaround of the state’s economy becoming a beacon of prosperity. It is home to some of the biggest mega-projects in the country, offering one of the most business-friendly environments among all other Indian states. Based on this success, at the Vibrant Gujarat Global Summit 2024, Prime Minister Narendra Modi will be hard selling not just Gujarat but India to global investors as an irresistible investment destination.
Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.
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