Yet, the city and the state remain an irresistible magnet for investors. Chief Minister Bhupinder Singh Hooda says: “There is Rs 70,000-crore of investment in the pipeline.” He claims that the last three years have seen some Rs 28,000 crore being invested in the state.
No surprise then that Hooda expects the state to post an 11 per cent economic growth during the Eleventh Five Year Plan period (2007-2012). There is clearly enough going on for the state (see Infrastructure Projects in Haryana below).
The chief minister recounts how one of the oldest corporate denizens of Gurgaon, Japan’s Suzuki Motors, has voted with its money for Gurgaon and for Haryana by investing more than Rs 9,000 crore over the last two years. “Osamu Suzuki told me that any penny that Suzuki invests in India will be invested in Haryana,” Hooda says, before adding that Haryana has been the recipient of more than 70 per cent of all Japanese investment in India. Such vote of confidence has now prompted Hooda to aim for a $130-billion (Rs 5.2-lakh crore) economy over the next decade.
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Clearly, the state which abuts Delhi from three sides has an unbeatable locational advantage. And in case of Gurgaon, that advantage is heightened because it is close to the Delhi airport. That allowed the initial pioneers in Haryana to set up base in Gurgaon. “The state, bordering the National Capital from three sides, offers excellent location to start any industry. Gurgaon and Manesar, where many of the manufacturing units of various companies are located, are in the proximity of the international and domestic airports,” says Pawan Munjal, MD & CEO, Hero Honda Motors. Lured by these advantages, Hero Honda set up the first motorcycle manufacturing plant at Dharuhera in 1984-85.
Ashok Kapur, Chairman and Managing Director, Krishna Maruti, an auto parts supplier to Maruti Suzuki, agrees. Kapur, who has since 1985 set up around 20 companies in Haryana, says: “I have managed to set up these companies without ever having really met a single government official. That speaks for the state.”
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Haryana also ends up scoring over neighbouring Uttar Pradesh due to commonly held perception of better law and order situation.
And this virtuous cycle continues with the SEZs. “Haryana is amongst the leaders in most of the new technology and export-oriented industries such as auto and auto components, apparels, IT and ITES services and other knowledge-based industries,” says Shrivallabh Goyal, President, Reliance SEZ Haryana.
For Haryana, success seems to have bred a sense of complacency and also aggressive competitors who have come up with far superior infrastructure and lower costs to woo investors. Read: neighbour Uttar Pradesh with Noida and Greater Noida, Rajasthan with its Bhiwadi option and a score of other states with interesting tax benefits.
Add to it the high land prices which increase the cost of setting up business for the small entrepreneur, and Haryana seems like an increasingly expensive destination. “It is almost like killing a business by outpricing the infrastructure,” says Samir Chopra, Founder Director of call centre Cybiz, and President, Business Process Industry Association of India. He cites Ireland as an example. Ireland, despite its inherent advantages in the BPO space, lost its edge to low-cost destinations such as Eastern Europe and, eventually, to India mainly due to exorbitant costs. These constraints are showing themselves up in investment decisions too. Despite considering Haryana, Honda Siel Cars India (HSCI) moved to Rajasthan as it did not get a large enough plot of land at good location. “There has been considerable improvement in infrastructure development, especially in Uttar Pradesh and Rajasthan, where we have our plants,” says a Honda spokesperson.
Notwithstanding these glitches, most of the investors and businesses which have ever been in Haryana are willing to be patient. It still remains by far the best destination in India. Though chief minister Hooda promises the metro, the road linkages and the 5,000-MW capacity in three years, among other things, it is quite clear that all this and more will have to come very quickly. Clearly, the benchmarks are rising. The global investors who are still keen on making Haryana their home cannot and will not take anything less than absolutely the world’s best. So when Chief Minister Hooda says, “It is my passion and ambition to make Haryana the #1 state,” it cannot just be in the country. Here, international benchmarks are in order.
— Additional reporting by Shamni Pande
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