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Almost every thinking state in the country now hosts an event to attract investment. Usually it is a global summit. The Chief Minister of the state ensures that a clutch of global CEOs and domestic industry leaders are paraded. Agreements worth billions of dollars are signed. Though a fraction are implemented.
The latest in the list is Emerging Kerala Summit. Other states like Gujarat, Maharashtra, Karnataka hold such summits regularly.
The states hope that global and domestic corporations will be suitably impressed. That the investors will set up factories, create jobs and help the state prosper. Single window clearances are offered. Tax breaks and lucrative financial incentives are offered. The great pool of human talent of the state is presented as must have for all companies.
Year after year, state after state, it is the same story. There is a lot of razzmatazz at the “Let’s lure the investor Summit.” When the party is over the headaches set in for business leaders. Headaches, not from hangovers. But headaches caused by the daily frustration of negotiating the nasty rules of government processes. Foreign investors watch in shock as state based companies tell them tales of horror. They speak of the number of licenses required to start a factory. They speak of the clearances needed for expanding a business. They fret over labour laws that hurt workers as much as the employers.
The ease of doing business in states has not improved despite scores of such summits.
Most states put more effort in managing the event than in changing their rules and regulations. Basic rules of governance are missing.
Most Chief Ministers are happy to lay a red carpet for investors once in a year or so. But what they don’t realise is that investors need a red carpet every day, in every government department. The government has to set clear and transparent rules of business. They officials have to take time-bound decisions. But this is tougher to do than hold an occasional summit.
Successful branding of a state as an investment destination does not depend on a slickly managed investor event.
The branding depends on more prosaic issues. The reputation depends on how a state is run. The reputation depends on how easy it is to live in its cities.
A recent survey on location branding done by Hong Kong based company PublicAffairsAsia lists the attributes that an investor seeks in a destination.
The top attributes were business operating environment, political stability, infrastructure, qualified labour and quality of life.
The survey was done for cities in the Asia Pacific region. Singapore was ranked as the city with best location branding. Mumbai and Delhi were at the bottom of the ranking. No amount of “summiteering” can change the quality of personal and work life in Mumbai and Delhi.
What state chief ministers need to do is to make their cities cleaner while improving the ease of doing business. According to the PublicAffairsAsia survey, most reputations are built on word of mouth recommendations.
This means that people and companies that experience the change will do more for promoting a state or city than needless conferencing.
Chief ministers should realise this.
(Pranjal Sharma is a senior business writer. He can be contacted at email@example.com)
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