Domestic Firms Head Investment Rush in India’s Fastest Growing State
DELHI – A multitude of big Indian companies have this week announced plans to invest in Madhya Pradesh. The state, which recently overtook Bihar to become the fastest growing in India, is set to see investment in a variety of different sectors, providing a further boost to its already rising GDP.
The largest investment is to come from Reliance Group, a multi-industry conglomerate that is India’s biggest private sector enterprise. On Thursday, Reliance’s chairman Anil Ambani announced that the group will invest Rs. 60,000 crore into Madhya Pradesh’s coal, power, cement, and telecom businesses by 2020, doubling the amount it is currently investing. The stated target of the massive firm is to make Madhya Pradesh India’s “digital capital” by the middle of next year.
Other companies promising to invest include fellow multi-service conglomerates Essar Group and Adani Group, with each pledging to inject around Rs. 20,000 crore, collectively creating a slew of new jobs for the state’s 75 million strong population.
The announcements for investment in Madhya Pradesh come in the wake of Narendra Modi’s ambitious ‘Make in India’ campaign, which aims to oversee a comprehensive increase of investment in India.
Speaking at the state government’s mega investor conference, Anil Ambani stated that his company’s activities in Madhya Pradesh are indeed directly related to Modi’s new campaign, remarking that Reliance Group are “not only going to ‘Make in India’” but also “make in ‘Madhya Pradesh’”.
Why Madhya Pradesh?
Madhya Pradesh is itself a very exciting new business prospect. Earlier this week, the state’s Chief Minister Shivraj Singh Chouhan announced that it will begin to gradually move away from an agricultural-based economy to an industry-based one, largely because the farming sector alone could no longer sustain its massive population. As a result, the door has effectively been opened for both domestic and foreign investors to establish a personal footprint in Madhya Pradesh.
Speaking at the Global Investors Summit, Chouhan noted that China, Japan and South Korea – Asia’s first, third and fourth largest economies respectively – all have only a small amount of their population currently dependent upon agriculture. He said: “If we have to have a developed state, we need a wide network of industries, particularly MSMEs [micro small and medium enterprises].”
Madhya Pradesh’s MSMEs, which number around 500,000, only contribute roughly nine percent to the state’s GDP, whilst its agricultural industry accounts for approximately 23 percent. Chouhan, and the companies that are now planning to heavily invest, are intent upon altering those figures in Madhya Pradesh’s near future.
Speaking at the same summit, Narendra Modi heaped praise on Chouhan and Madhya Pradesh’s plans to attract investment. Lauding how effectively India’s individual states can work with the central government to achieve progress, the prime minister said that he was sure Madhya Pradesh would be “a driving force in India’s economy” and could “cater to the entire nation”.
Noticably, the firms that have promised to invest in India’s fastest growing state have all been domestic. Looking to the future, foreign companies should also seek to make the most of the state’s business-friendly policies and begin ‘Making’ in Madhya Pradesh.
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