NEW DELHI: Discussions have started in the highest level of government to come up with ways to ensure that the Memoranda of Understandings (MoU) signed by states at grand investor fairs do not just remain agreements on paper but are followed through with action on ground.
Government is concerned that while grand announcements are made in the MoUs signed between states and Centre and with private sector entities, most of them do not bear fruit.
“A lot of money is spent on the investment promotion events by states these days. The Centre is keen to take whatever steps it can take to put a mechanism in place so that MoUs are taken more seriously and result in investments,” a senior government official told ET.
A meeting will soon be held with the concerned government departments at the Centre that have signed such MoUs with states to understand the status and problems faced in successful execution of the projects. Thereafter, the Centre will consult with the states to decide a course of action. The Department of Industrial Policy and Promotion will be the nodal department to coordinate the exercise.
Madhya Pradesh, which organised its Global Investor Summit in October 2016, had in attendance all the leading industrialists of India. Several MoUs announced by the state in previous investor summits failed to get off the ground.
“We have stayed away from announcing grand MoUs since people tend to say big numbers in excitement,” chief minister Shivraj Singh Chauhan had then told ET. The state, however, received investment commitments worth Rs 5.63 lakh crore across sectors.
The first-ever Make in Odisha conclave held in December 2016 saw investment intentions of over Rs 2 lakh crore by companies including by National Thermal Power Corporation, Steel Authority of India Limited, Tata Steel, Adani Exports and Indian Oil Corporation. Odisha will now organise the event once every two years and is also investing Rs 370 crore for a convention centre to host the investor meet.
Officials have cited lack or poor availability of funds and delay in clearances as the major reasons for the failure of MoUs from materialising. West Bengal, for instance, claims to have received investment proposals of over Rs 2.43 lakh crore in the 2015 edition of its investor summit and Rs 2.6 lakh crore in 2016. Only 40% of the proposed investments is under implementation.