In 2019, Gujarat ranked number one in terms of investments committed among all Indian states, with a 330% growth in domestic investments over the previous year. The pandemic has failed to dent either that exuberant growth or robust planning for future development.
Gujarat means growth. That tagline has stuck to India's economic powerhouse thanks to several extraordinary achievements the state has been able to accomplish in the past two decades - with only 6% of India's land mass and barely 5% of its population, it has managed to account for more than 8% of India's GDP, 22% of its exports and 17% of the country's total industrial output.
In 2019, Gujarat ranked number one in terms of investments committed among all Indian states, with a 330% growth in domestic investments over the previous year. Its annual Gross State Domestic Product (GSDP) growth from 2001 to 2013 averaged nearly 10 per cent and then from 2013-19 it was around 13% - consistently faster than India's. According to economists, if Gujarat were a country with a 10 million-plus population, it would boast the third-fastest growth rate in the world on average.
“An agricultural turnaround - with growth rates as high as 11.1% between 2000 and 2013 - was accomplished despite water scarcity. Gujarat knows the art of turning every calamity and tragedy into an opportunity,” said noted economist Dr Surjit S Bhalla. “Despite the plague in Surat and the earthquake in Kachchh, the state′s economic growth rate has surged in the last one-and-a-half decades,” he wrote in India Today.
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But those numbers look too stunning to sustain, and with the onset of the coronavirus pandemic, there were apprehensions over how the ensuing slowdown will impact the Gujarat growth story.
But with a slew of development packages and projects adopted during the pandemic, the state government has not only ensured that Gujarat remains the synonym for investments in India, but also prepares the foundation for a solid trajectory of growth in the months and years ahead. Here's a quick snapshot of three key sectors that continue to attract record investments and attention:
With infrastructure giant Larsen & Toubro (L&T) emerging as the lowest bidder for constructing a 237-km section of the Mumbai-Ahmedabad High-Speed Rail project last week, this is one of the largest infrastructure tenders that India has ever seen, and marks a new high in the development of Gujarat as a modern state. According to Economic Times, the National High-Speed Rail Corporation (NHSRCL) has accepted financial bids submitted by three infrastructure development firms for the project, which comprises 46.66% of the main-line making it the longest amongst all, and runs elevated from Zaroli village on the Maharashtra-Gujarat border to Vadodara through Vapi, Bilimora, Surat and Bharuch in Gujarat. The government has facilitated the project by helping acquire more than 83 per cent of the land.
The foundation stone for this ambitious bullet train project, which is being developed on Japanese E5 Shinkansen technology, was laid by Indian Prime Minister Narendra Modi along with then Japanese PM Shinzo Abe in September 2017.
It′s not just such headline-grabbing projects that the government has helped develop amid its admirable focus on infrastructure and industry.
Last week, Gujarat Chief Minister Vijay Rupani launched development projects worth more than $5 million in Bhavnagar - including an ultra-modern Bhavnagar Range IGP office and three new police lines. The aim is to focus equally on developing human capital and services sectors to provide adequate jobs to Gujarat's younger population as well as ramp up the security infrastructure across the state.
A further boost for industrial investment came when the Gujarat government published the new Industrial Policy 2020. With the new policy, the state has shared benefits in terms of Fixed Capital Incentive (FCI) put by the company and favours incentives pertaining to projects who need relocation incentives if they intend to set up in Gujarat - becoming perhaps the only state in India that boasts industry-specific policies and incentives.
As a Top 5 economy in India with a GSDP of nearly $220 billion in the financial year 2020, real estate forms the backbone of Gujarat's economy. The vibrant and dynamic nature of the sector has helped Gujarat command a 17% share of India's total real estate investments.
Since the formation of the Gujarat Real Estate Regulatory Authority (GURERA) in 2016, nearly 7,430 projects with investment pledges of $28 billion have been registered - making Gujarat one of the top three states in India as far as registration of projects are concerned.
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The good news is that despite the pandemic, registration of real-estate projects in the state have picked up - nearing pre-lockdown levels. According to officials, until March 2020, nearly 200 real-estate projects used to register with GUJRERA every month on an average. According to official figures, 48% of the projects registered during the past couple of months are in the residential category, while mix (residential and commercial) projects have a 32% share and commercial projects are around 19%.
A major driver of commercial and industrial real estate also lies in Surat - where the government has recently approved a massive Draft Development Plan-2035. As one of the fast-growing cities in India, Surat is known for its flourishing diamond polishing and textile industries - with nearly 80% of diamonds sold in the global market being cut and polished in the city. With the clearance of the development plan for the next 15 years, nearly 850 hectares of land would be available for development. The industrial growth corridor proposed in the development plan, in view of the industrial development happening in Hazira area, would provide a major boost for industrial development in this region.
Dholera in Gujarat is all set to develop one of the world's largest single-location Ultra Mega Solar Power Park, with Tata Power last week laying the foundation of the 400 MW Solar Power Project. The move coincides with the Dholera Industrial City Development Limited implementing the Bhimnath-Dholera Rail network to ease the movements of goods and logistics from Dholera to across the nation. Close to 11,000 hectares of land parcels have been dedicated to the park with an estimated capacity of 5000 MW renewable energy generation. Of this, currently Phase 1 of 1000 MW is being developed in which a 700 MW bid was recently awarded to five companies - Vena Energy Renewables, Tata Power, ReNew Power, SJVN Limited, and TEQ Green Power. The remaining 300 MW from the bid issued in the year 2019 was awarded to Tata Power.
The development is a huge shot in the arm for the Dholera Special Investment Region (DSIR) project - which is one of India's largest Greenfield Smart cities that aims to provide superlative infrastructure and sustainable environment through the application of smart solutions.
Combined with the fact that Gujarat has more than 40 active ports across its 1600-km coast line that helps the state handle more than 40% of India's cargo movement, the state is thus well on its way to create a new benchmark in industrial and commercial investment opportunities in India.