India Inc. can't shake off ghosts of Gujarat strife

Friday, 07 February 2003, 20:30 IST
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NEW DELHI: A communal conflict in Gujarat that killed about 1,000 people last year continues to plague India Inc., with business captains and industry watchers still voicing concern over the safety of investments in the state. Even as the Gujarat government has embarked on an aggressive campaign to woo investors, industrialists warn that the state's business future is at stake in the absence of any guarantee of trouble-free business environment. While officials of the Confederation of Indian Industry (CII) were not immediately available to comment on Gujarat Chief Minister Narendra Modi's outbursts at an interaction with the CII, other business lobby groups said instead of blaming industry the state government should focus on improving the business sentiment. "(Modi's comments) may impact the sentiment of prospective investors," warned Jayant Bhuyan, secretary general of the Associated Chambers of Commerce and Industry of India. "The investors basically look at three factors before firming up investment decisions - government, infrastructure and overall law and order situation. "And if there is any doubt on one of these fronts, the state government should try to address it in a positive manner so that all the hurdles are removed and investment starts flowing in," Bhuyan added. A senior official of another prominent industry lobby group said the domestic and foreign investors were closely tracking the steps the Gujarat government was taking to ensure "disruption free" business in the state. "There seems to be anxiety in businesses' mind even after a year of the communal violence because of the state government's perceived inaction in building a positive business environment," said the official who didn't want to be named. "As a general rule, very few investors are prepared to set up projects in communally volatile environs, and Gujarat tops the charts for being a communal hotbed these days," said Arun Goyal of Academy of Business Studies. "The investors go to any place with a long-term view and therefore they need security and comfort. If there is any doubt on this front, they would never rush with their business plans," Goyal said. The anxiety of industrialists over investing in Gujarat came to the fore in a dramatic fashion at a conclave organised by the Confederation of Indian Industry (CII) here Thursday. Leading industrialists questioned Gujarat Chief Minister Narendra Modi about the law and order situation and investment climate in the state, inviting the latter's wrath. Former CII president and Bajaj Auto Ltd. managing director Rahul Bajaj asked Modi to spell out the steps his government was taking to improve law and order in the wake of last year's sectarian violence that began in February 27, 2002, and lasted for almost three months. It claimed around 1,000 lives, rendered thousands homeless and caused widespread destruction. Fresh industrial investments in Gujarat, one of India's most industrialised states, were badly hit in the aftermath of the orgy of violence. Activists and rights groups accused Modi of turning a blind eye to the violence. Modi, in his response, came down heavily on industrialists who he said were defaming his state, claiming "vested interests" were trying to ruin the image of Gujarat as an investment destination. "There is no need to malign Gujarat. Others have a vested interest in doing so, why do you want to join them?" Modi screamed at the CII meet, stunning everyone. "It has been one year since they have been defaming us. It should stop now," he went on. "Gujarat is the most peaceful state and is moving towards overall economic development through an integrated approach." Added Goyal of Academy of Business Studies: "Given the current image of Gujarat, I don't think the investor perception will shift dramatically over the next few years."
Source: IANS
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