According to industrialists, more than 30% of Gujarat’s chemical-based units, which form a major hub of income for the state, have shut down already since the November 8 announcement. They expect the situation to get worse—Financial Express
According to all indications thus far, the summit is expected to be rather lacklustre this time around, with a majority of exhibition stalls yet to be booked.
US a Partner Country at the Vibrant Gujarat Summit, 2016
As reports of severe impact of demonetization on industry, small and big, production fall and freeze in the formal and non-formal sectors keep pouring in, while a distanced government continues in its mode of rigid denial, media reports suggest that there there appears to be an unofficial diktat within the corridors of power to sweep any discussions on the impact under the rug, ahead of the eighth edition of the Vibrant Gujarat Summit, scheduled to be held between January 10 and 13.
Talking to sections of the media on strict conditions of anonymity, a prominent Ahmedabad-based industrialist said, “There is pressure from the government to not talk about demonetisation. It is the Ahmedabad-based Gujarat Chamber of Commerce and Industry (GCCI), which is responsible for several events to be held at the summit, that had earlier planned to hold a discussion on the post-demonetisation scenario for industries at the Micro, Small and Medium Enterprise (MSME) Conclave, scheduled to be held at the summit. Inexplicably, that event has now been cancelled.
The international business magazine, Forbes, in its new year (2017) edition has literally torn apart the Narendra Modi government's irrational decision of demonetization. Steve Forbes has written,
"India's awful act underscores another piece of immorality. Money represents what people produce in the real world. It is a claim on products and services, just as a coat-check ticket is a claim for a coat left at the coat check in a restaurant or a ticket is for a seat at an event. Governments don't create resources, people do. What India has done is commit a massive theft of people's property without even the pretense of due process–a shocking move for a democratically elected government. (One expects such things in places like Venezuela.) Not surprisingly, the government is downplaying the fact that this move will give India a onetime windfall of perhaps tens of billions of dollars."
According to the Financial Express that broke this story, a prominent Ahmedabad-based industrialist said, “There is pressure from the government to not talk about demonetisation. They will not focus on demonetisation at all. We believe it will directly or indirectly affect the summit, of course. There will be lesser people attending the summit, lesser stall bookings, and there will be a lesser number of Memoranda of Understanding (MoU) signed than before.”
According to industrialists, more than 30% of Gujarat’s chemical-based units, which form a major hub of income for the state, have shut down already since the November 8 announcement. They expect the situation to get worse.
Another prominent industrialist said, “The situation is going to get much worse. Earlier, there were expectations that it would normalise in a month but it does not appear to be so. Textile units and other labour-intensive sectors like chemicals and plastics have suffered the most, but we expect the situation to get about 30% worse.”
Government officials, however, seem to be adamant on not allowing the woes of demonetisation to creep into the international summit, which this time around, has 12 partner countries namely the US, the UK, UAE, Australia, Canada, Denmark, France, Japan, Netherlands, Poland, Singapore and Sweden.
Addressing mediapersons last week, JN Singh, chief secretary in the Gujarat government had said, “I see no impact of demonetisation on the summit. On the other hand, there might be a positive impact. There might be people interested in digital economy and services sector who might come forward (for signing MoUs). The people coming to the summit are usually looking for long-term impact, and demonetisation will not be a problem in the long-term.” Singh added that this edition of the Summit will be the “biggest so far”.
To emphasise the push on moving towards a cashless economy, the summit this year is also expected to witness signing of MoUs online. The scrutiny for companies expressing interest in investing in Gujarat is also expected to be greater than was seen in earlier versions of the summit.
According to all indications thus far, the summit is expected to be rather lacklustre this time around, with a majority of exhibition stalls yet to be booked.
Interestingly, the Gujarat government has always been rather tight-lipped regarding the MoUs signed at the summit and the quantum that actually translate into investment on ground. At the recent press conference, state government officials had claimed a success rate of 66% success ratio for MoUs signed at the previous editions of the summit. According to chief secretary Singh, 51,738 MoUs or investment intentions have been signed in the earlier editions of the Summit, which began in 2003.
Singh had added that of these, about 34,234 projects have either been completed or are currently under implementation. Government officials said they were constantly reviewing as to why others had not worked out.
And though the state government is pulling all stops to create hype ahead of the Summit, the biennial investment blitzkrieg is expected to be a shadow of its former editions.
WATCH THIS VIDEO -Steve Forbes
Steve Forbes speech on Demonetization: What India Has Done To Its Money Is Sickening And Immoral