GIFT city

strategies like shadow banking, which has, in turn, increased the strain on public and private sector companies (Shukla and Sinha, 2019).

One of the major projects that was affected by the crisis was the flagship project by Gujarat government that was also a part of the ambitious political campaign of creating world class infrastructure and putting Gujarat on the world map, under the name of “Gujarat model” of development - GIFT city.

GIFT city

GIFT City (Gujarat International Finance Tec-City) was conceptualised as a project to create an international financial hub in India at par with New York, London, Tokyo, and Shanghai. GIFT City was finally proposed in 2007 as a smart city which will house the country’s first International Financial Services Centre (IFSC), which includes a multi-services Special Economic Zone (SEZ), as a joint venture between IL&FS (Infrastructure Leasing and Financial Services) and GUDC (Gujarat Urban Development Corporation), which is a government undertaking (Dalal, 2018).

In spite of criticism that a project of such financial and economic importance be located near Mumbai, the financial capital of India, where substantial infrastructure in terms of transport and connectivity, housing, and energy is readily available, GIFT city sought to create a new financial centre in Gandhinagar where the project had to start from scratch as there was no sizable infrastructure readily available. This meant participation from the private sector was a given. The contract for this development project was given to Fairwood Group, and eventually to IL&FS. It later came to light, when a PIL (Public Interest Litigation) was filed in the Gujarat high court by the former independent director of GIFT city Mr DC Anjaria citing irregularities in the transactions and processes with IL&FS, that these contracts were given without any competitive bidding process. Both these contracts were in violation of the Gujarat Infrastructure Development Act of 1999 and were given without due process (Dalal and Sapkale, 2018). Despite efforts by the Narendra Modi’s government over the past years to offer tax and regulatory concessions GIFT’s future is uncertain. In 2018, the government of Gujarat announced its plans to buy out IL&FS’s 50% stake in the GIFT city to guarantee there were no postponements in executing the project further.

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