Mint Primer | State vs state: What investment summits indicate
Summary
- Between December and February, at least 10 states have held summits to showcase their strengths and attract investors. Mint explains why these events matter in a fiercely competitive world.
Between December and February, at least 10 states—big and small—have held summits to showcase their strengths and attract investors. Tall promises have been made. Commitments, too. Mint explains why these events matter in a fiercely competitive world.
So this is the season of investment summits?
Yes. A series of summits have been held since December as states vie to attract investors. These investments are critical to boost growth and jobs. In December, Rajasthan and Bihar had showcased their strengths and commitments to investors. This was followed by Odisha in January. February saw a series of such events beginning with West Bengal and followed by Karnataka, Kerala, Madhya Pradesh and Assam.
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Unlike other states, Chhattisgarh did not organize a large event but sought investments through investor connect meets in Delhi and Mumbai. Jharkhand did so at West Bengal’s investor meet.
What did these summits achieve?
If the states are to be believed, they have received significant investment commitments (see chart). Rajasthan says it signed memorandums of understanding (MoU) for ₹35 trillion, Odisha ₹16.73 trillion and Karnataka ₹10.27 trillion. Industrially weak Bihar has attracted investments worth ₹1.81 trillion while Kerala, seen till recently as investor- unfriendly, managed to secure investment commitments worth ₹1.53 trillion after its two-day investor jamboree in Kochi last week. These investments, once implemented, have the potential to create over 2.5 million jobs overall, the states have indicated.
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Weren’t some states at Davos too?
Maharashtra, Andhra Pradesh, Telangana, Uttar Pradesh, Tamil Nadu, Kerala, West Bengal and Karnataka participated at the World Economic Forum held in Davos, Switzerland, on 20-24 January. The chief ministers of Maharashtra, Andhra Pradesh and Telangana were at hand to hard-sell their states. India received a total investment commitment of ₹20 trillion.
Do these pledges actually materialize?
Data on conversion isn’t easily available. The success of any investment summit should ideally be measured by the actual conversion which happens over time. Experts say even a 50% conversion is a job well done. Many states setting up high-level committees to ensure these commitments get converted into investments on the ground.
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Critics have also raised questions on whether these investor summits end up drawing investments that were not originally destined for a particular state.
So, how do these events help then?
Investor summits help states to showcase their strengths and commitment to attracting investments. They also sharpen healthy competition. To rank better in the ‘Ease of Doing Business’ index, states enact laws that are investor-friendly. Such summits give them an opportunity to listen to investors and understand their pain points. They also offer investors, both domestic and foreign, a chance to network. To be sure, an investment actually happens only if all the necessary conditions are in place.
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