Instability costs Karnataka investment crown

Karnataka is no longer the No.1 state when it comes to attracting investment proposals. After three years at the top, the state has finally lost its crown owing to protracted political instability and devastating floods last year.

In 2019, the state witnessed 8% drop in investment proposals to Rs 83,492 crore, according to data available with the Department for Promotion of Industry and Internal Trade (DPIIT). The drop comes on the back of a 40% crash in the investment proposals in 2018.

However, unlike 2018, when Karnataka somehow managed to maintain its top slot in attracting investors, in 2019 it lost its top slot and was relegated to the third position behind Gujarat and Maharashtra.

Government sources attribute the fall in the investments to the political instability in the state. “The state was witnessing political turmoil after the Assembly elections in 2018. This left investors with a huge doubt on policy measures. Also, floods wreaked havoc in the state in 2019, which prevented any form of recovery in the state,” an official in the Union Ministry of Commerce told DH.

Contrary to the declining trend in Karnataka, national investment proposals grew by a whopping 48% to Rs 6.8 lakh crore, mostly on the back of a huge rise in investment flow into Gujarat.

The western state garnered investment proposals worth Rs 3.44 lakh crore, making up 51% of the total investment proposals that came to India.

Maharashtra, with one-third of the investment proposals compared with Gujarat, stood at second spot.

Karnataka also saw the implementation of proposals dip by 10% to Rs 21,984 crore from Rs 24,480 crore in 2018 when it had risen 10-fold.