NT NETWORK
PANAJI
Even as the state government has been talking of achieving success in attracting investment through the Investment Promotion Board, a study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) Wednesday criticised Goa for its failure to attract new investment.
According to the study, Goa urgently needs to infuse confidence in investor community to attract investment. New investments have virtually failed to come in due to a fluid economic situation prevailing in the state, says the study.
The study, which is blight on Goa’s economic situation, says that predictability and stability are important conditions for a continuous flow of investments and “it seems both are seriously lacking in Goa.”
The growth rate of inflow of new investments dipped to about nine per cent in 2015-16 from a level of over 91 per cent in 2014-15. As of 2015-16, Goa has attracted outstanding investments worth about Rs 26,000 crore, which include all projects under various stages of announcement or implementation. However, the growth in outstanding investments has not been able to pick up.
During the four-year period between 2011 and 2016, barring 2014-15, the outstanding investments growth has not been able to touch double digits, reveals the study prepared by the economic research bureau of ASSOCHAM. It suggests that the government “take urgent corrective measures and facilitate ease of doing business to infuse confidence in investor community in the wake of falling investments.”
Though outstanding investments attracted by Goa have grown at a compounded annual growth rate (CAGR) of nine per cent during 2011-12 and 2015-16, only services, construction and real estate sectors have recorded positive growth rate. The CAGR of important sectors of manufacturing and electricity have recorded negative growth of about eight per cent and 32 per cent, respectively.
“Declining investments in power sector can dampen the spirit of investor community as energy consumption is positively linked to economic growth, especially manufacturing constituents like cement and steel,” notes 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 in Goa as projects with over 58 per cent of investment are under different stages of implementation. “There is a need to adopt a better strategy for growth and fiscal management and special importance must be given to identify factors that would stimulate private investments as it is one of the principal
drivers of growth,” says the study.
ASSOCHAM periodically brings out state reports and ‘Goa: Economic and Investment Scenario’ is its latest report. It throws light on the sectoral growth pattern and their contribution to the economy. Agriculture and industry have been worse off in the four-year period. The industrial share in the state GDP has seen a decline from 45.9 per cent in 2009-10 to 33.2 per cent in 2013-14, reveals the study.