Local Goa News

Wednesday, September 14, 2016

Goa not an investor’s paradise: industry body

ASSOCHAM study finds new investments’ growth rate has dipped to 9% from over 91%; suggests government take urgent corrective measures and facilitate ease of doing business to infuse confidence in investors

PANJIM: Inflow of new investments in Goa dipped to nine percent in 2015-16, a study by industry body ASSOCHAM has found.
“Goa has virtually failed to attract investments as year-on-year growth rate for inflow of new investments dipped to about nine percent in 2015-16 from a level of over 91 percent in 2014-15, probably due to a fluid economic situation prevailing in the state,” highlighted the ASSOCHAM study titled ‘Goa: Economic & Investment Scenario’.

ASSOCHAM has suggested that the government urgently take corrective measures and facilitate ease of doing business to infuse confidence in investor community in wake of falling investments.
Reacting to this, Officer on Special Duty with the Investment Promotion Board (IPB), Tulasidas Pai, said IPB has already achieved its target of attracting Rs 5000 crore worth of investments each year since its inception. “We have approved more than 100 projects so far and more are in the pipeline. With the TechStartup scene across the State, ESDM Park in Tuem, international airport at Mopa and Defence Ministry’s mega order to GSL shaping up well, future prospects remain buoyant and the concern raised by ASSOCHAM is unfounded,” Pai told Herald. He expressed confidence that the BRICS Summit will provide a platform for Goa to promote itself as an ideal investment destination.
Shekhar Sardessai, Chairman CCI, Goa Chapter said, “I am unaware about the source of statistics and data used to prepare such a report. However, the Investment Promotion Board (IPB) is making efforts to bring in investment. A normal gestation period for the promised investment to materialise on the ground takes about 18 months. Also, IPB started functioning regularly only in 2014-15.”
The study prepared by the ASSOCHAM Economic Research Bureau (AERB) says, “Predictability and stability is an important condition for continuous flow of investments and looking at this trend, it seems both are seriously lacking in Goa. A region with better economic growth and more policy initiatives with effective implementation can encourage more investors.”
This is further endorsed by Manguirish Pai Raikar, Chairman, National Council of SME, ASSOCHAM who said, “The government’s initiatives in developing infrastructure need to speed up besides policy implementation should showcase dynamism. The implementing authorities lack the will, which does not rub well on the investor. The investor today needs prompt response and ready infrastructure. The government has to build up its image through proper promotion. Its words should match its action. The report is just giving guideline as the figures have been relied upon from government data and its economic publications.”
As of FY16, Goa had attracted outstanding investments worth about Rs 26,000 crore, which includes projects under various stages of announcement or implementation; however the growth in outstanding investments has not been able to pick up.
During 2011-12 and 2015-16, barring 2014-15, there is no other year wherein the outstanding investments growth has been able to touch double digits. “Outstanding investment growth rate had fallen to 7.5 per cent in 2015-16 from over 23 per cent in 2014-15,” the study highlighted.
Though outstanding investments attracted by Goa have grown at a compounded annual growth rate (CAGR) of 9 percent during 2011-12 and 2015-16, only services, construction and real estate sectors have recorded positive growth rate of about 12 and 11 percent respectively.
“Declining investments in power sector can dampen the spirits of investor community as energy consumption is positively linked to economic growth, especially manufacturing constituents like cement and steel,” noted the study. Besides, importance of power can be judged by the fact that it is required by agriculture, industrial and domestic household sectors for their functioning.
Implementation of investment projects is also a worrying factor, as projects with over 58 percent of investments are under different stages of implementation.
ASSOCHAM feels that Goa needs to adopt a better strategy for growth and fiscal management. The State must pay special importance to identifying factors that would stimulate private investments as it is one of the principal drivers of growth.
The industry body also suggested that the State identify bottlenecks, roadblocks and take speedy measures to rectify the same. The immediate challenge for Goa is to cultivate a vibrant entrepreneurial ecosystem in the State.
Considering that tourism is the mainstay of Goa’s economy, ASSOCHAM has suggested that the State come up with more inclusive tourism policies and programs to take the momentum forward and derive better synergy of tourism and development.

Herald Goa News

No comments:

Post a Comment