Karnataka may prove scandals don't deter investors

Karnataka may prove scandals don't deter investors

In spite of debilitating scandals that have brought disrepute to the Bharatiya Janata Party (BJP), its government in the state is confident of attracting over Rs.50,000 crore ($9.6 billion) from Indian and foreign investors in agriculture and related sectors.

With "Bounteous Karnataka" as the slogan, the D.V. Sadananda Gowda government is organising the first "Global Agribusiness and Food Processing Summit 2011" in this tech hub Dec 1 and Dec 2 to showcase the potential the state has in these sectors.

The government has set a target of attracting Rs.51,727-crore investment at the meet, with the food processing sector taking the lion's share of around Rs.36,000 crore, Gowda says.

More than 450 investors from India and abroad and several multinational companies from the Netherlands, France, Australia and Israel are expected to attend the meet which is to be inaugurated by union Agriculture Minister Sharad Pawar.

Gowda says about 40,000 acres of land is needed to set up projects from the expected investments from the meet. The government has in its possession about 10,000 acres and will look for non-farm land to meet the need.

Gowda's confidence in attracting huge investment commitment at the December meet does not appear misplaced, going by the investor response at the global investors' meet held here last year to seek capital in non-agricultural sectors.

That meet, held at the height of political instability and corruption charges that rocked the B.S. Yeddyurappa government, had extracted a commitment of Rs.600,000 crore investment in 387 projects.

Some of the big names that promised investment in the state included steel tycoon Laxmi Nivas Mittal.

Yeddyurappa, whose government organised the global investors' meet, was either in jail or attending courts in connection with corruption and illegal land deal cases against him when Gowda held roadshows in New Delhi and Mumbai to promote the Agribusiness summit.

Of course, things can always turn out differently and only time will tell how much of the Rs.500 billion expected to be promised at the two-day meet will actually flow in.

The government will have an explanation ready - the projects take time to come to fruition.

Of the 387 projects for which investment was committed at last year's global investors' meet, 27 have started functioning, says Industries Minister Murugesh Nirani.

Another 200 projects "are progressing well" as nodal officers have been appointed to ensure speedy implementation of the projects, he says. These will take about three more years to be functional as they are all big projects, he says.

Buoyed by the investor response last year and for the coming meet, the government is already planning the next Global Investors Meet in Bangalore in June 2012.

"We will target Rs.1 million crore investment at that summit," he recently told a meeting of an industry chamber here.