Karnataka to clear projects than ink pacts

Hyderabad, Nov 29: Betting on big investments flowing into the state at the Global Investors' Meet (GIM) in Bengaluru in February 2016, Karnataka plans to clear projects rather than merely signing agreements with prospective investors.

"We want to clear projects for quick implementation rather than sign agreements with investors to claim we have attracted so many investments at the GIM," Karnataka Industries Minister R.V. Deshpande said in an interview during a visit here.


The minister's assurance to investors ahead of the fourth GIM on February 3-5, 2016, in the Bangalore Palace grounds stems from the poor record of many such agreements not being implemented years after they were inked at the second and third editions of GIM, held in 2010 and 2012 under the then BJP government.

"I don't say agreements should not be signed. But we have to go beyond them and clear projects to get off the ground. My goal is to clear projects," Deshpande asserted.

The minister was here with officials on a road show to promote the GIM's fourth edition - Invest Karnataka 2016 - and woo investors from its neighbouring states Telengana and Andhra Pradesh.

Though the previous BJP government signed about 1,000 agreements with combined investment proposals of Rs.9-lakh crore ($135 billion) in the last twin GIMs, even 15 percent of them were not implemented owing to various factors.

"Most of them (agreements) have not become a reality. I don't want to criticise anybody. They (BJP government) might have done with good intentions," he quipped.

Recalling his previous tenure, also as major industries minister under the 1999-2004 Congress government, Deshpande admitted that of the Rs.27,000-crore investments the state signed at the first GIM in 2000 in his presence, projects worth Rs.18,000 crore were grounded.

Three consecutive drought years (2001-04) and political instability from 2004 to 2008 due to the fall of two coalition governments have put paid to its efforts to execute the projects as a majority of investors kept away from the crisis-ridden state.

Touting that Karnataka pioneered GIMs in the country, the senior minister hoped the upcoming meet would attract more projects than in the past.

"Our state is home to diverse sectors like IT, biotech, aerospace, defence, textiles, automotive, manufacturing, food processing and silk. We also have one of the best human resources, including skilled workforce, good labour ties, a stable government, law and order and favourable weather," Deshpande noted.

On why the Congress government was holding the GIM three years after returning to power, Deshpande clarified that the event can't be held every year.

The minister, who has held similar road shows in New Delhi, Mumbai, Dubai and South America since September, is leading an official delegation to France and the US from November 29, as chief minister Siddaramaiah opted out owing to the ensuing elections to the state legislative council on December 27.

The state has requested Japan, Germany and the United Arab Emirates (UAE) to be country partners for the event, besides the US.

Though the World Bank recently ranked Karnataka ninth in ease of doing business, an unfazed Deshpande felt this aspect does not necessarily lead to investments.

"Karnataka was first in ease of doing business in 2002 when we brought the Industries Facilitation Act and labour reforms. Now, there are about 30 parameters under which they decide which is a good state. This has nothing to do with investments. There are states receiving applications online but doing nothing," the minister pointed out.

At the same time, he admitted that the importance of ease of doing business cannot be denied and claimed Karnataka was trying to become the best by strengthening Udyogmitra, an online application system, introducing more labour reforms and abolishing trade licence.

Citing a recent survey by a leading national weekly (India Today), Deshpande said Karnataka was ranked second after Gujarat in attracting investments and third in composite analysis.

On the power shortage in the state, the minister said efforts were on to add about 2,000 MW to the grid by June-July 2016, which will make it self-sufficient in energy. The state is also focussing on generating power from solar, wind and waste.

"The power problem persists because of our dependence on hydel power. This year we had a drought that was not seen in the last 44 years," he lamented.

Allaying fears over delays in acquiring land for industrial projects, Deshpande said the state had the Karnataka Industrial Area Development Board Act that provided for consent acquisition, something that was not in the central law.

"Investors can go to farmers or land owners, sign an agreement and purchase land. Once land is bought, its conversion is given automatically," Deshpande added.

On infrastructure woes in Bengaluru keeping away investors, the minister denied there was any flight of capital from the tech hub to other cities.

"Flight of capital is a wrong impression. The Tatas have investments in Karnataka and if they expand and also invest in Hyderabad, it doesn't mean they are running away from our state," Deshpande added.


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