Making MoUntains out of molehills

We so do love the ‘MoU’. After all, a memorandum of understanding soundslike a firm handshake and a done deal. But what it is, is a non-legally binding document between parties. So, when UP government signed a `25,000 cr MoU with Puch AI — a 1-yr-old Bengaluru-based startup with revenue of less than `50 lakh a year, and not much else to talk about — and CM Adityanath announced on Monday that the company would ‘introduce AI parks, large-scale data centre infrastructure, AI commons, and an AI university in the state’, we should take it with a Galgotias cloud server-full of salt. To be fair, Adityanath subsequently clarified gingerly that the MoU is ‘a preliminary step before detailed due diligence and project evaluation gets done’. Indeed, a single date doth not a marriage make.

UP is hardly the only state where ‘investment pledges’, usually spread over a decade or more, are bandied about as slam dunks. At Bengal Global Business Summit 2025 alone, Mamata Banerjee announced `4.4 lakh cr ‘investment proposals’. Only about 3% of such proposals from earlier summits, though, have reportedly concretised. Beyond the photo-ops and waxing eloquent, MoUs act as clickbait with their fantastical pledges to pour billions. Amazon pledged over $35 bn to expand logistics, AI and exports in India by 2030. Microsoft committed to $17.5 bn to cloud and AI infra, while Google promised investment of $15 bn to create a major AI hub. Puch AI’s $2.8-odd bn MoU stands on far less firm ground.

Adityanath earlier claimed that UP has attracted ‘more than `45 lakh cr in MoUs’ in the last 8-9 yrs. The thing is, only about 9% of those agreements have reportedly turned into projects in which money actually flows and production has begun. Good intentions are great. But the proof of the MoU pudding is in the investing. Let there be white papers, with independent audits of why some MoUs didn’t progress beyond the ‘preliminary’ stage, and transparency regarding actual capital commitments. By now, we have wised up enough to not make MoUntains out of molehills.