s totalling 13trn rupees with the potential to create 600,000 jobs, reported one business newspaper.
Such numbers attract headlines and make voters feel good. But enterprising journalists combing through data have pointed out that the actual investment coming in is a fraction—usually a quarter to a third—of the announced figures. Yet that may be missing the point. Summits serve at least three functions other than signing deals. The first is marketing. After 1991, when India started opening up and liberalising investment rules, policy action shifted to the states, says Suyash Rai of Carnegie India, a think-tank in Delhi. As India’s 28 states compete among each other, such events remind companies of the states’ ease-of-doing-business rankings, their growth and the incentives they offer.
A second function is to show state bureaucracies that the political leadership is serious about investment. Government departments are roped into organising summits. Leaders expect civil servants to follow up on promises to grant speedy licences and permits. Summits are “a starting point”, says Sonal Varma, chief India economist at Nomura, a bank. “But ultimately the aggregate business climate is going to determine whether companies invest.
There are spillover effects too. Attracting a firm may lure its competitors. The presence of one or two companies in a particular sector could help seed a cluster. If nothing else, the summits, as Visakhapatnam’s streets showed, are great business for billboard-advertising companies.