Announcements of investments invariably present a conundrum. When it comes to the state of the nation - and its many states - they serve the purpose of enhancing the feel-good factor, but sometimes couched under layers of economic guile don't really tell the entire story. While it is tempting to declare that states which regard the potential investor as king have forged ahead, it is also equally true that investment proposals are required to traverse some distance before they assume fruition. Very often projects end up being abandoned or shelved. Therefore, an announcement of development intent, say possibly made in 2012, while reflecting well on the prospective prosperity quotient of a state, doesn't really mean anything of substance until it reaches a level of implementation.
That largely is incumbent upon the approach taken by the minders towards development. And indeed that is the crucial zone where most states slip.
A classic case is that of Maharashtra post Enron. The state once regarded as the country's financial powerhouse and a beacon for the best of the business world, the strength also bolstered by RBI rankings of FDI announcements in the state, has found itself increasingly losing favour with investors - both local and foreign - who have shifted their attention to other more industry and business savvy states like Gujarat. With greatness embedded in its name from birth, it is natural for Maharashtra to carry the burden of ensuring that the trait remains in place. There is also a tendency to take such tags for granted, states become complacent.
Constant international glare, as in the case of high profile Maharashtra, also has its perils. It can seduce leadership to paint an inflated economic picture - one that could be at odds with reality.
Brand Maharashtra, has for a few years now, faced that dilemma which it is finding difficult to resolve. The state's slippage on various parameters is largely owing to rising competition from various states, not to mention administrative, implementation and regulatory roadblocks. Today Maharashtra finds itself trapped between the devil on top (as Gujarat) and the deep blue sea represented by the aggressive Southern trio of Andhra Pradesh, Karnataka and Tamil Nadu. Even the so called BIMARU states - Bihar, Madhya Pradesh and Rajasthan - have overtaken the state in certain areas of development. Like piranhas in a feeding frenzy, these other once-upon-a-time lesser states are now breathing down Maharashtra's neck.
Admittedly there being not much of a distance between the state and the others, there is very obviously a growing threat to Maharashtra's position of preeminence. Embarrassed government minders, loath to acknowledge the debacle have time and again sought refuge in the display of the catalogue of investments announced in between trips to Davos, and gung ho declarations of "All is well."
Thankfully enough there is now a sense of urgency as witness the recent announcement of the state's new Industrial Policy, as also the decision to find a new label to market itself: Magnetic Maharashtra. Indeed, Maharashtra has everything going for it such as social, industrial, commercial, financial and geographical clout but there is a need to temper a sense of history with a healthy dose of realism. The western state cannot consider itself 'maha' anymore and its minders need to relinquish the complacency that seems to be have seeped in. CW's cover story this month has as its focus the snakes and ladders growth game being played out by the states of the Indian Union, followed by the tale of Maharashtra's loss of preeminence and its more recent attempts to regain its former numero uno status.
Have a wonderful read!