Though Jharkhand has successfully attracted 341 live projects worth over `seven lakh crore which could generate over three lakh direct and indirect employment opportunities, the State needs a one-time special package as well as higher budgetary assistance to transform it into a major investment destination, apex industry body ASSOCHAM said.
“The need for the special package has been necessitated to bring Jharkhand at par with the national average in both social and physical infrastructure,” DS Rawat, ASSOCHAM National Secretary General said in a note on Monday.
“Despite being endowed with abundant natural sources, Jharkhand is underperforming due to low value addition and is also losing attractiveness as an investment destination, as such the state needs to adopt a better strategy for both growth and fiscal management," said Rawat. "Another significant worry is that Jharkhand's overall contribution in terms of its share in the Indian economy has remained stagnant at two per cent during the course of past nine years to March 2014 due to various factors including insurgency," he added.
Highlighting the current state of investments in Jharkhand, the ASSOCHAM noted that as of June 2014, the state has about 341 live investment projects worth about Rs seven lakh crore with manufacturing sector accounting for lion's share of over 53 per cent followed by electricity (35 per cent), mining (six per cent) and services (four per cent).
However, almost 93 per cent of these investment projects attracted by Jharkhand have remained non-starter as about 44 per cent are in implementation stage while about equal amount of investments were in announcement stages and projects with about five per cent share have been stalled due to various reasons.
“The state of Jharkhand needs to create and maintain world-class infrastructure to attract private capital in large numbers," added the National Secretary General of ASSOCHAM.
live investments attracted by Jharkhand as of June 2014 have witnessed a fall of about five per cent year-on-year (y-o-y) ie by `36,000 crore, while live investments in manufacturing sector declining about nine per cent, further noted ASSOCHAM.
“However, value of live investments attracted by services and mining sectors have surged 7.5 per cent and about four per cent respectively”.
Of the total investments attracted by Jharkhand, the state has a combined share of about five per cent in total value of investments worth about `145 lakh crore announced by both public and private sectors across India as of June 2014.
While private sector accounted for over six per cent share in total investments attracted by Jharkhand, public sector accounted for about three per cent share in this regard.
Considering that Jharkhand has almost 12 per cent share in mining and quarrying activities across India, ASSOCHAM has suggested the state to reform the coal sector like Karnataka and Kerala in which blocks are allotted for captive mining to steel industries.