Bosch warning must be eye-opener

The frank and tough talk by Steffen Berns, head of automobile major Bosch group in India, about the enforced delays in the execution of the company’s expansion plans in Karnataka should make the authorities sit up and take note. The complaint was also accompanied by a warning that the company might look to other places where it could shift its expansion plans. Berns’ words have exposed the state government’s claims about creating the right environment for industries and fast-tracking clearances and approvals. The Bosch chief said that it took 19 months for the company to get approvals for two office buildings and long after completion of the buildings for a new plant at Bidadi, the approval for electricity connections is still awaited. While he cannot explain the delay to his head office, can the government explain the reasons to him and to the people? Even the minister who was present at the venue could not go beyond admitting that “there are difficulties” and requesting the company “not to go anywhere”.

The Bosch plant was among the first industrial units to be set up in Bengaluru (then Bangalore) and had an important role in creating an industrial climate in the city. It is still important in the industrial map of the city and the state. It is a multinational with operations in many countries. If such a company has so many difficulties even with matters like electricity connections, the problems faced by smaller units and enterprises can only be imagined. It is not just Bosch which is disappointed and frustrated. E-commerce company Amazon has suspended its investment plans in the state over a dispute about taxes. The Bosch chief also mentioned issues like vague laws and complex problem resolution mechanisms as stumbling blocks in investment. He was joined by another business leader who pointed out that a new company has to get approvals from 52 departments before it starts working. All this shows how “easy” it is for companies to do business in a state which claims to be industry-friendly.

Routine delays, which are the hallmark of government work, indifference and obviously corruption are other reasons. Unless these are addressed, more companies may think of opting out of the state. In fact, some have already left for states which offer better terms, conditions and facilities. Delays create cost overruns which any private enterprise would like to avoid. There is no use holding investment melas with huge claims if the state is unable to create conditions for investments to fructify.

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