October 07, 2008

Jharkhand industrialization remains mostly on paper

Although Jharkhand government has signed MoUs with 52 companies in the past 4 years but most projects have failed to take off and in the past 3 years, only 7 companies started their first phase of operation. The MoUs were signed mainly in the steel and power sectors. The total proposed investment was more than INR 2 trillion.

Out of the 52 MoUs, 1 was signed in 2003, 13 in 2004, 30 in 2005 and rest in 2006. The MoUs were valid for 2 years by which time the companies had to start work.

The state government last week renewed MoUs of TATA Steel and Arcelor Mittal for another 3 years. But most other companies have not applied for renewal of MoUs. A state industries department official said that "Only 13 companies have applied for renewal."

Jharkhand government has failed to keep its promise of helping investors set up industries and left investors to their fate in deciding the location of industries and negotiating with landowners. Other things like providing coal blocks and iron ore mines are still pending with the government.