Monday, December 11, 2006

GUJARAT --- The Great Run of Kutch

Author: Abhishek Kapoor

Publication: The Indian Express

Date: December 10, 2006

URL:


Introduction: The 201 Gujarat earthquake his Kutch the hardest, killing
more than 10,000 people in the district, flattening towns and ravaging
lives. Nearly six years later Kutch has risen from the rubble to become
the state's industrial hub.

BUSY highways, a landscape decorated with busy windmills and Punjabi
dhabas on Gujarati roads. This is the new Kutch, risen from the dust,
literally.

In 2001 the picture couldn't have been more different. When the killer
quake measuring 6.9 on the Richter scale hit Gujarat, it left 15,000
people dead in the state. Kutch's toll was the grimmest at over 10,000.
The temblor destroyed 90 per cent of Bhuj, and ruined lives in the towns
of Bhachau, Anjar, Gandhidham and Rapar. In all, more than half a
million lost their homes and over 150,000 people were injured.

With the region reduced to a concrete rubble, the economy was literally
pushed back to the Stone Age.

But six years later, India's second largest district (the largest is
Leh) Kutch-one-fourth the size of Gujarat-has reemerged from the ruins
to become a major industrial hub. Fuelled by post-quake investment that
toted over Rs 28,000 crore at last count, the district's throbbing
economy is leading Gujarat's industrial march to a double digit growth.

The investment is likely to touch Rs 50,000 crore within the year. The
leap is huge considering investment pre-quake, since independence, had
never crossed Rs 2000 crore.

Now overloaded trucks block national highways coming out of Kandla and
Mundra ports, as industrial towns of Anjar, Bhachau, Samakhiali, Adipur
and Gandhidham pulsate to the clink and clamour of industrial growth.

As trucks whiz past giant windmills on the Bhachau-Samakhiali stretch,
the buzz on the Bhachau-Bhuj road is that there's an urgent need to put
in place a four-lane road to facilitate the traffic.

Kutch, it appears, has shaken off the last of the dust and arrived,
finally.

Kutch has a brand equity now. The two ports (Kandla and Mundra),
combined with government support, have played a great role in polishing
Kutch post-quake. The Central government announced excise exemptions. An
emotional Prime Minister Atal Bihari Vajpayee had then promised a Naya
Kutch, and the state government chipped in with tax sops. Promises were
made, some too tall to see implementation. Aided by international donor
agencies, good roads have come up, carpeted from edge to edge to give
dust-free cities. With the old gone, the newness of Kutch is a sight for
sore eyes. ''The change is visible in the lifestyle of an average Kutchi
as well. Though the industrial development is not directly translating
into jobs for resident Kutchis, the ancillary and service industry
growth in Kutch means there is now a four-wheel vehicle even in remote
villages. Farmers have good price for their land which otherwise was not
very productive," says Chandrakant Dedhia, chairman of the Kutch
Development Council, an industry supported NGO, working to focus
attention on development.

Kutch boasts of being the world's largest maker of Submerged Arc Welded
(SAW) pipes, it has the largest single unit making vitrified tiles (by
ORPAT) in Samakhiali, scrap and roll steel units, coking coal industry,
large cement plants like that of Sanghi's at Abdasa (two more are in the
pipeline), even as a Japanese business delegation led by the country's
ambassador scouted for opportunities in the district last month.

All this has sent prices shooting with parts of the coastal corridor
commanding a premium of up to Rs 1 crore for an acre. A two-room
accommodation in Mundra village, 10 km from the port, can come for Rs
5,000 per month.

With the economic change has come social change. Financial growth has
fostered cosmopolitanism. Punjabi dhabas are now as ubiquitous as
Kathiawadi food joints.

The growth story has an emotional thread to it as well. Originally from
Kutch, Talakshi Nandu was a trader of vitrified tiles based at Mumbai.
The post-quake sops announced by the government brought him to his
homeland, with Nandu setting up the Euro Ceramics unit at Bhachau, now a
Rs 150-crore business. "Before this, I did not know anything about tile
making. Now it's big for me. There is still a lot of promise of growth
in Kutch," says Nandu, who now divides time between his business in
Kutch and his family in Mumbai.

Adds Kutch Collector Dhananjay Dwivedi: "All this transition has come
after the earthquake. A lot of focus on facilitating this growth is
showing results now."

Last month also saw the state government clearing land for the Union
government supported 4000 MW Ultra Mega Power Project (UMPP) worth Rs
20,000 crore. The Sanghi group is setting up another 1200 MW power
plant, with both projects adding more than 2500 MW to Gujarat's kitty.

But Kutch's sparkling sprint does have a few tarnished facets. Already
the chorus in the district is growing shriller over the incentives not
being enough to keep business going. Industrialists of the region have
sought an appointment with the Union Finance Minister P Chidambaram this
month to discuss this issue.

While states such as Himachal Pradesh, Uttaranchal, J&K, and those in
the Northeast were allowed tax incentives for a period of 10 years,
Kutch was given a long rope only for five years-till December 2005. The
sops were not offered to existing units if they planned expansion,
unlike other regions where any expansion exceeding 25 per cent of
existing capacities became eligible for the exemptions. Industrialists
say the state government is failing to keep its promises.

Kutch businessmen also complain that the concessions are biased in
favour of large-scale units, leaving the small-scale sector to fend for
itself. "There has been no income-tax exemption, nor any capital
investment subsidy. Units in Himachal and Uttaranchal enjoy IT exemption
between 30 and 50 per cent up to 2012. In fact, even before
industrialisation could take strong roots, some of the units in the
pharma sector have migrated to Himachal already," says Nimish Phadke,
general secretary, Federation of Kutch Industries Association (FOKIA),
an umbrella organisation of Kutch's industries.

State bureaucrats shrug off the complaints as usual business greed.
"Every businessman wants more. How much more can one give? It's at least
better than what they were getting in Ahmedabad," is how Gujarat's
Principal Chief Industrial Advisor R J Shah puts it.

That's one claim not many would dismiss

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