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Euphoria, Business Deals and Reality at the 'Davos of the East'

Indian Prime Minister Narendra Modi inaugurated the seventh edition of Vibrant Gujarat Summit in Gandhinagar on Sunday, a flagship programme of Gujarat government which was attended by United Nations Secretary General Ban Ki-Moon, US Secretary of State John Kerry and other dignitaries.

Modi and Kerry at Vibrant Gujarat

US Secretary of State John Kerry greets Indian Prime Minister Narendra Modi at the Vibrant Gujarat Summit.

The three-day Vibrant Gujarat is the place where business deals are done and grand visions espoused. It was conceived by Narendra Modi when he was Gujarat's chief minister.

Modi's own vision was as grand as they come: "Have we ever thought of recession as being the result of low per capita income in countries where a majority of global population lives? Have we ever thought of its solution in terms of enhancing the common man's employability, income and purchasing power?" he asked in his speech.

"The best outcome of this event should be inclusiveness and involvement of communities needing care and development," he said, at the same time praising Ban Ki-Moon for championing the discipline of Yoga.

Fine words, but a grass-roots campaign against the event is questioning whether this event, as with previous editions, will actually make any difference at all to the millions in the state who live in poverty.

Their view seems to be confirmed by the attitude of Gujarat minister Saurabh Patel, the event's organiser, whose own vision seems decidedly un-yoga. This year, he has said that Vibrant Gujarat is about "globalising" the event and taking it into a higher orbit with the help of the eight partner countries who have co-sponsored it.

Patel called it the 'Davos of the East' and told Rediff.com that Gujarat is trying to attract investors in the defence sector. "We will get more investment in defence equipment manufacturing. We expect to get investments in textiles, clean energy and infrastructure sectors," Patel said in the interview.

According to an informal survey by the US India Business Council (USIBC), the US business delegation is considering investment of around $41 billion in India in the next 3-4 years. 

On the energy front, Amercacn nuclear plant builder Westinghouse Electric Company is looking at constructing a nuclear plant in Gujarat; and Adani Enterprises, India's biggest private power producer and port owner, has teamed up with SunEdison who will invest $4 billion in building India's biggest solar photovoltaic manufacturing facility to reduce reliance on imported Chinese panels, as well as with Australia's Woodside Energy to prospect LNG, oil and gas.

Wind turbine manufacturer Suzlon Energy has also announced plans to invest almost $4 billion over the next five years in wind energy projects in Gujarat, and Welspun Renewables and Gujarat Urja Vikas Nigam are to spend $1 billion in the state on further 500 MW wind and 600 MW solar installations.

But amidst the euphoria of the summit, a note of realism is being sounded. Vinod Mehta (‏@DrunkVinodMehta) tweeted: "In 2011, only 1% of actual investments came" out of all of that was promised by Memoranda of Understanding.

 Vibrate Gujarat MoU figures

 Vibrate Gujarat MoU figures

Congress Party supporter and Hindu Sarel Patel also observed that over the past 10 years, over 60,000 small and medium enterprises have shut down, making a video, from which the image below is a still, and which was tweeted by the organisers, rather ironic:

SME video still at Vibrant Gujarat

Sarel Patel said that 41% of Gujarat's population is poor, with 18.5% of the population living in severe poverty. The state ranks 9th in terms of poverty among 20 Indian states according to Oxford Human Development Initiative in 2011, and Sarel pins the blame on corruption in government circles. He says over 5,500 farmers have committed suicide but the police have been instructed not to register them. 

Malnourishment in Gujarat

For many, as with Davos in West, Vibrant Gujarat is seen as a rich persons' club, where deals are done and futures sealed that have little to do with ordinary people.

Sanjay ‏(@jay_01969) tweeted this plea: "It's time the Government of India conducted summits like #VibrantGujarat for the whole nation so that all the people get its benefit." For this reason there have been calls to boycott the event using the hashtag #VibrateGujarat:

  boycott Vibrant Gujarat

The Gujarat government has concealed the slum areas behind hoardings so that foreign delegates attending the jamboree can't see the reality:

hoardings at Vibrant Gujarat

Supporters of the boycott cite, as an example of the damage done by multinational companies to the local environment, a Coca Cola plant at Sanand which takes 3 million litres per day of water from Narmada canal. Altogether, the canal supplies 20 million litres per day of water to industries in Sanand which include automobile companies like Tata Motors and Ford.

The state government has made a provision to allocate 90 million litres per day of Narmada water for Sanand. Congress leader Ahmed Patel has criticized this allocation, saying that the dam had been built to provide water to drought-prone parts of North Gujarat, Saurashtra and Kutch.

This opposition, and the actual outcomes from Vibrant Gujarat 2015, are a test above all of Modi's leadership.

Gujarat is the Indian state perceived by multinationals as being the most investment friendly. If Modi is to be true to the vision he espoused yesterday, of inclusion and fairness, then be must ensure that corruption in the state ends, that wealth is spread to the whole population, and that the environment is safeguarded for future generations.