The Hindu Business Line : Engineering a makeover for Gujarat

FOR the Gujarat Chief Minister, Mr Narendra Modi, the last couple of months have been all about re-engineering, restructuring and reinventing the business outlook of his State.

The orchestrated effort of Mr Modi and his Government was to create a bullish sentiment for the State as an investment destination as the last two years or so had seen a distinct slump in demand for Gujarat among potential investors.

Therefore, the recently concluded `Vibrant Gujarat' global investors' summit was all about optimising the synergy between culture and commerce as also trade and tradition. True, the debate continues as to what percentage of the Rs 65,000-crore worth of Memorandums of Understanding signed will get translated into investment on the ground and also whether many of these proposals were not old hat. But Mr Modi is convinced that he has done a good job of leveraging the glamour and gaiety of Navratri to showcase Gujarat as an investment destination of choice to the outside world.

Talking to Business Line, Mr Modi, in his role as the CEO of Gujarat Inc, outlined his plans to spearhead the State into the New Economy era, even while keeping his feet firmly planted on the comfort zone of Old Economy sectors such as petrochemicals and pharmaceuticals.

This includes a 10.2 per cent growth rate by March 2004, on the one hand, and the lifting of some one lakh families that are handpicked from 20,000 villages from below the poverty line.

While the doubling of per capita agriculture income from Rs 8,000 to over Rs 15,000 over the next three years is but a natural corollary, Mr Modi plans to set up five agro export zones across the State. The culmination of this process would be the erection of Asia's largest cold storage zone in the Dahej Special Economic Zone (SEZ) in south Gujarat, so as to create a link from the farmgate to the international customer for mangoes and other horticulture produce. "The Vibrant Gujarat meet was just the beginning and the floodgate of investments to the State have been opened. We had a Chinese company firming up plans to put up a ceramic tile manufacturing plant in Gujarat at an investment of Rs 55 crore on Monday. Later this week, Mr Lawrence R. Klein, a 1988 Nobel laureate in economics, is coming to meet me along with Mr Polk Carey, Chairman of the leading US investment banking firm, WP Carey & Company. Clearly, it is not merely a courtesy call as they also would be talking business," Mr Modi said.

For those who have been picking holes in the investment proposals worth Rs 65,000 crore that were signed at the Vibrant Gujarat meet, Mr Modi's response is that there is nothing non-global about Indian companies investing in Gujarat. On the other hand, two more Chinese firms that are mulling fresh investment in Gujarat including a two-wheeler company and a machinery manufacturer for the ceramic tiles industry, the latter considering an export-oriented plant along the coast in Kutch district.

Mr Modi argues that Gujarat does not necessarily have to stay in the Old Economy zone just because it is still striking gas and oil at will, and some of the State-owned enterprises such as the Gujarat State Petroleum Corporation (GSPC) having struck gas even in the faraway Krishna-Godavari basin.

He admits that historically the State could venture into downstream petrochemical businesses such as chemicals, plastics and pharmaceuticals on the strength of the oil and gas fields discovered by Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC). At the same time, Mr Modi is quick to point out that the intricate pipelines being laid across the length and breadth of the State will lead to cheaper availability power, and therefore to more business ventures.

"Meanwhile, Gujarat is laying a sound infrastructure base for IT-enabled industries with 35,000-km of optic fibre cable network. True, we are not a powerhouse in software development, but the State is looking at knowledge-based projects with longer shelf life such as bio-informatics and R&D hubs for the pharmaceutical industry. And it is also about using IT as tool in e-governance as we are set to make the entire pool of revenue data available on the Internet quite soon," Mr Modi said.

The downside is that the two concerted foray made by the State in the field of IT backfired with the Gandhinagar-based electronics estate going to seed and the lately developed Info-City making a name for itself more by converting its allocated space into apartments and restaurants. Despite these setbacks, Mr Modi has managed to cull out an image of an IT-savvy chief minister, with intranet messages flying thick and fast within the Secretariat these days. And reports have it that Mr Modi was instrumental in many of his bureaucrats ordering fresh visiting cards for not carrying their e-mail addresses in their earlier business cards.

Clearly, Mr Modi is in an image make-over mode, both for himself and Gujarat, the endgame being a fresh in the eyes of the constituents, in this case its potential business partners. His detractors may argue that there is a huge divide between his vision for the State and the more mundane aspects of reality such as a bludgeoning fiscal deficit. Mr Modi's plea to the global investors to sow in rupees and reap in dollars may also get derided as a part and parcel of his dreams of `Gujarat unlimited'.

"Yes, I visualise many things, but then I also do my homework. Thus, when I ask you to imagine a futuristic Gujarat, I do not speak in vague terms but with my feet planted on the ground," countered Mr Modi. And it is Gujarat that has taken a leaf out of India Inc's new mantra by putting into motion an ambitious debt swap plan that has already whittled down its costly Central borrowings that carried an average coupon of some 14 per cent to only 11 per cent. And Gujarat is now pleading with the Centre to allow it to buy back costly debt from financial institutions as well. At the end of the day, as the bureaucratic machinery in the State unwinds after a long haul that ended only on the Dussera day, it may have reason to believe that it did a reasonably good job with the Navratri business summit. At the same time, it may be early days yet to liken the `longest dance festival' with either the Rio Carnival or the Munich Beer Festival as the Chief Secretary was emboldened to do on the eve of the business summit. The absence of both the beer and the Samba dancers may be a distinct disadvantage in luring the global tourists to Gujarat to witness the Garba dance but, then, Mr Modi may already have achieved his goal.

He may or may not be successful in marketing the State as a favoured investment destination in the days to come. What is a certainty is that he has leveraged the good will of a festive season to negate a negative image that both the State and he himself had acquired over the past couple of years.

And therein lies a marketing lesson for the academic minded. As the occasional Chinese businessman or the odd Nobel laureate would vouchsafe.

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