It asked Goa to facilitate ease of doing business in the state to infuse confidence in investor community in wake of falling investments. “Goa has virtually failed to attract investments as year-on-year growth rate for inflow of new investments dipped to about nine per cent in 2015-16 from a level of over 91 per cent in 2014-15, probably due to a fluid economic situation prevailing in the state,” the ASSOCHAM study titled ‘Goa: Economic & investment scenario,’ stated.
The Goa industry, its government and the Goa Chamber of Commerce and Industry (GCCI) has reacted sharply, by immediately going into the defensive mode to bring down the ASSOCHAM report.
The main line of GCCI’s defence is that the ASSOCHAM report did not elaborate on its findings. Let’s look at GCCI’s line of argument against the ASSOCHAM report “The report states that the new investment pattern in Goa indicates that the growth rate has shown a great sense of volatility and that the annual growth rate for 2015-16 stands at 8.8 per cent whereas in 2014-15 it was 91.3 per cent. However, the report does not cite any factual data or base/reference figures to support this claim.
The report further states that current status of about 75 various investment projects in the State, worth about Rs 15,000 crores, indicates that the under implementation rate in the state is high at 58.2%. Again there are no concrete figures/data given in the report to support this claim.
The report goes on to assert that Goa is underperforming and thereby also losing attractiveness as an investment destination to some of the other states in the country. It says that investment is one of the principal drivers of growth and the state must therefore pay special importance to identifying the lead factors that would stimulate private investment.
While the GCCI’s need for elaboration is fine, isn’t it surprising that GCCI should need further elaboration on its own investment scenario? The spirit of ASSOCHAM’s report seems to have been given the go by here. The GCCI should examine the Goa Investment scenario on the touchstone of this observation and come back on whether this is a touchstone of merit. “Predictability and stability is an important condition for continuous flow of investments and looking at this trend, it seems both are seriously lacking in Goa,” said the study prepared by the ASSOCHAM Economic Research Bureau (AERB).
GCCI has responded with its own set of investment figures. It states “In November 2014, Goa-IPB has cleared 114 projects worth Rs 9620 crores, with an employment potential of 20,740 jobs. This is in tune with the Government’s resolve to attract investments worth Rs 25,000 crores and generating 50,000 jobs in five years. The only figure that needs to be studied here is the one for jobs — 20,740. There needs to be a detailed presentation by each company on the specific number of jobs it will create including the breakup of the kind of jobs and the average pay for these jobs. Till that happens this crucial figure will only be a random one.
GCCI itself admits that stagnation in manufacturing is affecting growth and investments. It states in its rejoinder to the ASSOCHAM report that “Goa Chamber, on several occasions in the past, has pointed out that the growth of manufacturing sector is stagnating, particularly after the tax incentives to industry under 80IB were withdrawn in 2004 and after similar incentives were offered to industries set up in Northern Hilly states. Besides the tax incentives, the flip flop on SEZ, lack of transparency in allotment of plots by GIDC and also to some extent the local opposition to many developmental projects had contributed in shaking investor confidence in Goa and that is why Goa could not attract any sizeable investments in the State.”
This in itself is GCCI’s very honest assessment, which the state of Goa needs to look at very seriously, rather than focussing on every figure and line in the ASSOCHAM report. It needs to work with the ASSOCHAM and not see it as an unfair critic.
