Why Gujarat is among the best places to invest in India

Gujarat has been accused by many of hiding information on many counts in the anti-Muslim violence of 2002.

Yet, a reality check of the state administration puts it among the most conducive places to do business in India.

Gujarat holds around 30 per cent of India's stock market capitalisation, contributes 22 per cent of total exports and about 9.5 per cent of the country's total work force.

The gross state domestic product (GSDP) was Rs 3,31,633 crore (Rs 3.31 trillion) at factor cost at constant prices (2004-05) for 2009-2010, up 10.2 per cent from the Rs 3,00,847 crore (Rs 3 trillion) of 2008-2009.

The GSDP growth rate has fluctuated, the peak being 14.95 per cent in 2005-06. It fell to 8.4 per cent in 2006-07 and jumped to 11 per cent in 2007-08, then slipping in 2008-09 to about seven per cent.

Per capita income at constant prices has shown robust growth in past five years.

For 2005-06, it was Rs 36,102 and for 2009-10, estimated at Rs 49,030, up 9.3 per cent from Rs 44,816 in 2008-09. This is far more than the national per capita income of Rs 33,731 estimated for 2009-10.

Concerns on the social order have resurfaced in the past couple of years. The high profile Sohrabuddin Sheikh encounter case, an allegedly fake encounter by the state police, has cost the government the junior home minister, jailed last year for his alleged role.

The ghosts of the 2002 riots have been haunting the ruling Bhartiya Janata Party (BJP), which has seen a Supreme Court-appointed Special Investigation Team interrogating chief minister Narendra Modi on various allegations regarding a particular massacre.

It was the reputation on governance and project implementation that helped the government remain in office despite the political tremors.

The government claims to have expedited construction work on the Narmada Canal project.

In the state budget for 2011-12, it has doubled the investment in Sardar Sarovar from Rs 3,500 crore (Rs 35 billion) to Rs 7,010 crore (Rs 70.10 billion).

There is also a major thrust on infrastructure. The development of ports and port-based investment activity is an instance.

There is also a plan for shipbuilding parks along the coastline.

Gujarat has had a stable government for over a decade. Investment commitments made in the much-reported Vibrant Gujarat Global Investors' Summits (VGGIS) seem to have opened scope for faster industrial development.

The past five years saw three such events, in 2007, 2009 and 2011.

The combined value of the memorandums of understanding signed in the three events is said to have crossed the Rs 35 lakh crore mark.

The last five years of the Modi administration has also succeeded in garnering some big-ticket projects for the state, including Tata Motors' much-hyped Nano car factory at Sanand near Ahmedabad.

A leading tyre making company, CEAT, has established a unit near Vadodara.