K’taka loses most favoured investment destination tag

Fresh investment proposals attracted by Karnataka has dropped drastically during the first five months of 2019 as compared to the same period last year. Between January and May this year, Karnataka has attracted a mere Rs 11,219 crore, an astounding 85.1% dip year-on-year.

According to data available with the Department of Industrial Policy and Promotion (DIPP) the state had seen investment proposals worth Rs 75,435 crore during the same period last year. With this, the state has ceded its coveted top slot to Gujarat, which has attracted investment proposals worth Rs 97,070 till now, a four-times jump from Rs 23,543 crore it garnered during the first five months of 2018.

Karnataka stands at a distant fourth slot this year when it comes to the interest expressed by the investors. Maharashtra with investment proposals worth Rs 20,142 crore till now is at the second slot, followed by Odisha at the third slot.

According to DIPP officials, potential investors are looking at the neighbouring states like Telangana, Andhra Pradesh and Maharashtra for investment owing to more business-friendly policies.

According to the sources, the Commerce Ministry has received complaints about Karnataka’s political leaders interfering in the day to day operations of the companies. Also, some firms are unhappy with the bureaucratic red tape existing in the state.

“There has been delay in the allocation of land as well in certain cases. So, it is natural in that more and more investors will move away from the state,” a senior official from Commerce Ministry, not wishing to be named said.

DH has also learnt that a delegation from the commerce ministry is soon likely to meet the state industry department officials and apprise them about the issues.

The meeting is likely to take place immediately after the political crisis in the state gets over.

The state government, on its part, is blaming the sectoral preferences of the investors for this phenomenon. “There has been an increased demand in the heavy industry like petrochemical. But in Karnataka, we have the technology-heavy industries,” a senior official from the state industries department said.

The said official also agreed to the accusation by the commerce ministry wherein political leaders from the state had interfered in the decision making by the investors. The official, however, added that it was only a couple of times that such cases were reported.

On the national level, till May 2019, the country has garnered investment proposals worth Rs 1,79,465 crore -- a drop of 5.6% from the corresponding period last year.