A Ministry of Commerce audit of the activities of Invest India found a decline in the conversion rate of ‘Investment Prospects’ into ‘Investment Targeting’ from 52.64 percent in 2017-18 to 25.51 percent in 2020-21 despite an increase in expenditure.
The report recommended that Invest India, an agency formed to help investors looking for opportunities and options in India, stop the downward trend in investor targeting and ensure that “physical progress [is] commensurate with financial progress.”
Earlier in the day, on 17 March, 2023, Deepak Bagla, Managing Director and Chief Executive Officer of the investment promotion body, stepped down after the audit report questioned the work accomplished by Invest India.
According to the part of the audit report accessed by Moneycontrol, the conversion of prospects into targets steadily declined even before the pandemic started and was a “cause of concern.”
Invest India converted 279 out of 530 prospects in 2017-18, a strike rate of 52.64 percent. In 2020-21, the comparable numbers were 400 out of 1,568, or 25.51 percent.
During the same period, direct expenditure on investor targeting increased from Rs 12.62 crore to Rs 15.04 crore, the report pointed out.
Invest India’s mandate consists of investor targeting and investor facilitation.
“Performance in these two activities has a direct bearing on new investments and job creation opportunities,” the report pointed out. The audit report states that all other activities besides investor targeting and investor facilitation are either sub-set or have a supporting role to play.
Invest India, in its defence, has stated in the audit report that its performance cannot be judged based only on the decline in the number of prospects and targets.
The organization stated that here are cases in which it takes less time to convert prospects to targets and in some cases the conversion takes longer.
“The size of the investment or employment cannot justify the amount of research or work carried out by the team into selection of prospects or conversion to target and facilitation,” Invest India said in its reply to the auditors, which formed part of the report accessed by Moneycontrol.
Invest India is yet to respond to Moneycontrol’s request for a comment. In his farewell message to Invest India staff, Bagla said a new MD will take charge in 2-3 weeks, according to people aware of the matter.
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