KHAJURAHO, Dec 20: Minus an industrial culture and modern infrastructure, Madhya Pradesh Chief Minister Digvijay Singh has been desperately trying to sell his state to Indian and foreign investors. The response has been below expectations. And, given the ground realities, the investors have been wary.

Nevertheless, investment has started trickling in. Whether it gathers momentum remains to be seen. But, it goes to the credit of Singh that he is not leaving any stone unturned to convert Madhya Pradesh into an industrial powerhouse.

Singh's hardsell was visible at Intechmart '97, the international investment jamboree, held in the temple town of Khajuraho between December 10 and 12. Singh's allies in this effort were the Confederation of Indian Industry and the United Nations Industrial Development Organisation (UNIDO). To the 240 Indian and foreign businessmen, who descended on Khajuraho to mix business with pleasure, Singh offered industrial peace, a responsive administration, stable economic policies and transparency, besides sales tax exemptions or deferral, no limit on quantum of tax concessions, plethora of sops for small, rural and cottage industries. A new captive power policy will be announced by the month-end.

At the end of the three-day marketing blitzkrieg, the Madhya Pradesh government claimed that deals worth more than $2 billion had been firmed up and 36 MoUs and LoIs signed with direct and indirect benefits for small and medium enterprises. Though keen on doing business in the state, the concerns uppermost in the mind of businessmen were poor infrastructure and red tape.

"Redtapism and lack of infrastructure are the major bottlenecks. Punctuality is also missing. The mechanism through which contracts can be enforced is not in existence. There should be some method which can give a guarantee to foreign businessmen that their money is safe on the lines of Lloyds Bank of London which provides insurance to the business contracts," said Baruch Gross, president of the Indo-Israel Chamber of Commerce, Israel.

Notwithstanding the problems, Gross felt that there is tremendous scope for business between the Israeli and Indian companies. "Small and medium companies are the backbone of Israeli economy. There is no reason why India cannot achieve the level we have achieved, if they work sincerely".

Impressed with the promises made by Singh, an optimistic Gross said: "If the promises are kept, Israel can open a window of opportunities for the Indian businessmen."

Outlining the possible areas for co-operation between Israel and Madhya Pradesh, Itzhak Rozen of Israel Export Institute, added: "Transfer of agriculture techniques, bio-technology, seed-processing, mining and telecommunication are the areas in which Israel can help. Besides, we have the technology for producing clean geo-thermal power produced from hearth."

Another country, well represented at Intechmart, was Japan. According to Masayoshi Matshushita of UNIDO's Investment Promotion Service, Japan, the possible areas of co-operation are automobile and high-tech products. "India's advantage lies in having a highly skilled manpower base. If the Indian companies adopt the Japanese mode of management, the scope of co-operation will grow further."

T Tamota of Marubeni India Private Limited, a company which signed an MoU with the MP Small Industries Corporation (MPSIC) for marketing the products manufactured by small-scale industries in the state, felt that tourism, jute, leather and soyabean products are the areas where lot of opportunities exist in MP. "These products can be developed and marketed in Japan and India both." Soyabean is another potential item for trade between Japan and MP, felt Tamota. "It is a rich source of protein. Sadly, soyabean in Madhya Pradesh is mostly used for producing oil. In my talks with MPSIC, we have suggested making soya card and other soya products for consumption." Anil Srivastava, managing director, MPSIC, agreed with Tamota. "We will identify the potential soyabean product makers in the state and then chalk out the modalities for its development and marketing."

George Giesecke of IPS, Vienna, felt that if Austrian companies come to India, their cost of production could decrease substantially. "India has cheap and highly-skilled manpower besides cheap raw material which we can use." Not only government bodies but private agencies too got going in the match-making process at Intechmart '97. Aparajita Chaudhuri of Alliances Strategiques International SA of France was a case in point. "We act as consultants for the French and Indian companies. French people are interested in agro-processing with special emphasis on dairy. In telecommunications sector too there are very good small and medium companies in France. Bio-technology is another potential area. And as far as MP goes, we have got enquiries for mining and electronics sector," said Chaudhuri.

Piera Fagioli of Associazione Intel, an industry association from Italy, felt that meetings during Intechmart '97 were very fruitful. "Electronics and high-tech products are the areas where Italian and Indian companies can work together. Our association organises exhibitions and seminars and we would like the Indian companies to participate in these." However, a section of foreign delegates felt that there is room for improvement on the organisational front. Representatives of UWP Limited from Germany and Holland had to fend for themselves. "Small companies from the automobile component sector were conspicuous by their absence. We had to organise business meetings by ourselves," they said.

Local entrepreneurs felt that the small sector gained a lot of exposure vis-a-vis the international business community. Said J H Bhojwani of Precision Engineering Components, Bhopal, who supplies equipment to the defence sector, "We are thinking of importing channel sections from Canada which we don't get in India in the required form. The Israelis too are keen for co-operation in the field of electronic relays used in the defence sector."

Shakun Kharb of Devika Herbal Products, Bhopal, entered into a joint-venture and buy-back arrangement with Remedina SA of Greece for producing vitamin C and plant extracts. "We have developed our products keeping in mind the availability of local raw materials. We have also developed pesticides from neem seeds. We are now searching for investors as the project cost is around US $ 1.6 million," said Kharb.

Then there were some who were not much enthused by the presence of foreigners. Nainesh Sanghvi of STL Exports Limited, a 100 per cent EoU-producing galvanised tubes GI pipes, said that the timely follow-up of policies is lacking in the state. "The state government is not willing to purchase the amount of products which we want to supply. Further, forty per cent of power-cut is normal during the agriculture season which comes twice.

We want to set-up our own captive power plant," said Sanghvi.Vijay Kumar Gupta of Beekay Engineering Corporation Limited felt that there is not much attraction for foreigners in the existing situation. "MP requires long-term planning and fast disposal of cases. Foreigners won't come here till these impediments are removed," said Gupta.

Gupta said that though power and infrastructure are the major impediments in the state, there are certain advantages too. "There is no son-of-the-soil feeling and the law and order situation is better in comparison to the other states." However, one thing almost all entrepreneurs agreed on is that Intechmart '97 has opened a window of opportunities for them. With the assurance from the Chief Minister to improve the situation and from the organisers to come up with specific follow-up programmes, the delegates felt that in the final analysis the success of the present endeavour will depend on how far the parties engaged in the exercise work together. Added an optimistic M P Rajan, MD, MPState Industrial Development Corporation,"Intechmart `97 will have a long-term effect on state's industrial development".

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.