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Business wanted Modi as PM. It’s time to back up.

Well ahead of other sections of society, business leaders recorded their preference for Modi as Prime Minister.  Modi’s biennial Vibrant Gujarat Global Investors’ Meet (VGGIS), always had a flurry of business leaders congregating. At VGGIS 2009  Airtel’s  Sunil Mittal famously led the chorus for Modi. Earlier, in 2007, Ratan Tata had said: “you don’t have to attract people to Gujarat. You are stupid if you are not here.”

Remember Tata’s discomfort with Mamata? The latter’s tantrums had Tata shifting the Nano car plant from Singur to Sanand. While many a state competed for winning the location, Modi took just 10 days to clinch the deal. This speed paved the way for other large global manufacturers like Ford and Suzuki to set up large capacity plants in Gujarat.

In the VGGIS, several developed countries joined as partners and sent large industry delegations. In these meetings Modi led from the front and involved the entire Gujarat policymaking machinery. Business was impressed by the total involvement of the chief minister and his government, more importantly by the speed and efficiency of clearances, free from corruption. This track record should have its impact in reviving the confidence of business at the national level. Recent years have witnessed a steep decline in interest to invest in India, both by Indian businessmen and by international players.

India has been ranking low on ease of doing business. With the multitude of clearances and attendant delays several projects mooted with great fanfare have been languishing. The most striking ones relate to POSCO’s investment of around Rs 50,000 crore on a 12 million tonne steel plant in Odisha. Similar large investments on steel plants planned in Karnataka, Jharkhand and elsewhere have remained non-starters for decades.  Paradoxically, large Indian industrial houses have been making huge investments in other countries.

Business should now stand by Modi and redeem their promise of support to him. The best way to do that is to help him with large investments. They can expect the Gujarat model written large on the nation as a whole. Business leaders should come out with short term and medium term plans for stepping up large scale investments, guiding the government on cutting out delays and removing the cobwebs that come in the way of quick decisions. 

 

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