Does India need this Rs 2,000 cr 'gift'? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Does India need this Rs 2,000 cr 'gift'?

Apr 4, 2012

If you have ever flown to New York, you must have observed a magnificent sculpture of a torch-bearing female that ascends 93 meters into the sky. In case you haven’t already guessed it, we are talking about the Statue of Liberty. But another statue in-the-making is set to dwarf this colossal structure. In fact, it is planned to be twice as high as the Statue of Liberty. And once it is ready, it is going to be known as the world’s largest statue. The interesting part is that it is going to happen in India.

Statue of Unity

More than a year ago, Chief Minister of Gujarat, Mr Narendra Modi put forth his grand vision of building a 182-meter tall sculpture of Sardar Vallabhbhai Patel, one of the most prominent heroes of India’s freedom struggle. This historical monument which will be erected downstream of Narmada dam, will be called the Statue of Unity. Everything hunky-dory so far, isn’t it?

Rs 2,000 crores for a statue!

When you are living in a country where a substantial population still lives in poverty, you cannot do away with the most important question: how much is the statue going to cost? The answer to that question rang the alarm bell for us. Against earlier estimates of Rs 1,000 cr, the project is now set to cost a whopping Rs 2,000 cr. Given the size of the project and the usual delays involved, it would be hardly surprising if the cost shoots up even further.

We have no objections with the idea of paying tribute to a great person. But we have strong reservations against such extravagances. As a nation that is still developing, we have several other priorities. We need greater investments into education, healthcare and infrastructure. Moreover, these investments have long term benefits for the overall well-being of the economy. On the other hand, a Statue of Unity would just remain a statue. Apart from attracting tourists and creating awareness, the statue would have very little to add to the country’s welfare.

There are no free gifts

As per the Chief Minister, this will be his gift to India and the world. But like there are no free lunches, there are no free gifts. Someone has to pay for it, right? So the next question is- who is going to pay for this statue? The project is being built on a public private partnership model. Most of the money is planned to be raised by public contribution.

But here is the distressing part. We came across a recent news report that the Gujarat government has taken commitment from about a dozen public sector undertakings (PSUs) to contribute an amount of Rs 64 cr. The list includes PSUs like Gujarat State Petroleum Corporation (GSPC), Gujarat Industrial Development Corporation, Gujarat Mineral Development Corporation, Gujarat Alkalies and Chemicals Ltd, Gujarat Narmada Valley Fertilisers Company, Gujarat State Fertilisers and Chemicals, and Gujarat Industrial Power Corporation Ltd. Let us tell you that these PSUs were made to contribute a similar amount last year as well. Each time, despite their reluctance, they have been persuaded to make a contribution.

The ultimate irony

A recent Comptroller and Auditor General (CAG) report has revealed that state PSUs have been making losses worth thousands of crores of rupees. For GSPC alone, CAG has calculated a loss of about Rs 5,000 cr. Moreover, other state PSUs have made losses of about Rs 4,216 cr over the last three years.

This shows the ironical state of the Indian economy. The economy could be facing a slowdown. The fiscal deficit could be going out of hand. Businesses could be reeling under huge losses. But the government will continue to keep its political ambitions above the interests of the economy.

Do you think India can afford to build such expensive monuments?

Equitymaster requests your view! Post a comment on "Does India need this Rs 2,000 cr 'gift'?". Click here!

1 Responses to "Does India need this Rs 2,000 cr 'gift'?"


Apr 5, 2012

There is nothing wrong in aspiring to be a great nation and the symbolism associated with it.

For example, even though the Statue of Liberty was gifted by France to the US, the US struggled a lot to raise finances to erect just the pedestal on which the statue stands.

How they raised the funds is a very interesting and inspiring story. Imagine collecting $102,000 in public donations from 120,000 citizens with 80% donations less than $1 !

That shows how the 'will and might of the people' is much bigger than the 'will and might of the politicians'.

Mr Modi should do well to read up the full history of America before trying such, forced and expensive imitations.

But, to give some credit to this visionary 'Bhai' from the west, at least he is not erecting statues of himself unlike a certain 'Behenji' up north !

Equitymaster requests your view! Post a comment on "Does India need this Rs 2,000 cr 'gift'?". Click here!

More Views on News

Top 5 Recent IPO Developments You Should Know (Views On News)

May 12, 2021

So far in 2021, IPOs in India have raised nearly US$ 3 bn, the best start to the year since 2018.

How Did Mindtree Perform in Q4FY21? (Company Info)

Apr 20, 2021

Here's the rundown on the company's latest quarterly results.

5 Big IPOs to Look Forward to in 2021 (Views On News)

Jun 19, 2021

A peak into the hype around the IPOs of internet companies like Zomato and Paytm

HDFC Banking and Financial Services Fund: Emphasizes on the Growing Sector (Outside View)

Jun 18, 2021

PersonalFN analyses the features of HDFC Banking and Financial Services Fund and explains the potential this fund has to offer to its investors.

Can You Make More than 100 Times Your Investment? (Profit Hunter)

Jun 18, 2021

The open secret to multiplying your money in forever stocks.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Jun 18, 2021 (Close)