Centre transfers major projects from South India to Gujarat: Report

An investigative report by The News Minute has exposed a shift in major investment projects being redirected mostly from southern states such as Tamil Nadu, Karnataka, Telangana, and Maharashtra to Gujarat since the Modi-led government came into power at the Centre. This trend has raised alarms among several political leaders who accused the Central government of favouritism towards specific regions.

Report details

The report uncovers various cases of relatively big projects initially slated for other states being switched to Gujarat which is also Prime Minister Narendra Modi’s home state.

One notable example involves the case of an American semiconductor firm that was initially interested in setting up equity investment in Chennai in 2022. However, when the company officials returned to New Delhi after meeting with the Union commerce minister Piyush Goyal, they were taken to Gujarat in what they referred to as “helicopter diplomacy”.

This strategy goes well with the roles crunched by the Gujarat government to lure investors to the state.

Opposition leaders voiced concern

The leaders of the Opposition parties have expressed concerns towards this practice. Tamil Nadu chief minister MK Stalin alleged that Rs 6,000 crore investment planned for his state was forced to shift to Gujarat.

Similarly, Telangana’s former IT Minister KT Rama Rao (KTR) and Karnataka’s incumbent IT minister Priyank Kharge have accused the Union government of pressuring companies to relocate their projects. Political leaders of the Maha Vikas Aghadi (MVA) coalition in Maharashtra have recently stepped up their tirade against the Narendra Modi-led Union government claiming that large projects such as the Tata Airbus facility were deliberately shifted from their state to Gujarat.

The report identifies several strategies employed by the Modi government to facilitate this redirection of investments such as.

• Substantial Capital Subsidies: The Union government provides financial incentives which are quite often unreachable for other states.
• Commitments to Reduce Import Duties: This is because to gain entry firms are offered the assurance of proper trade conditions.
• Assurances of Government Orders: Manufacturing businesses are assured procurement contracts from the government agency.
• Promotion of Investment Destinations: Lavishing major publicity in undeveloped areas such as Dholera and GIFT City as some of the best places for investment.

Critics argue that these tactics not only undermine federalism but are also meant to tilt the balance in favour of some states and against others in the race to attract developmental resources. These allegations have attracted attention due to concerns regarding the fairness of growth in the context of India. The debate over investment allocations highlights the complexities of regional dynamics in India’s economic landscape.