Long way to go for Siddu govt to draw investors

Of 108 projects cleared in 2014-15, only 7 took off

The State government might have set an ambitious target for itself to attract investments at the Invest Karnataka-2016, but statistics show that the flow of investment has nosedived between 2013 and 2015 ever since the Congress came to power.

The High Level Clearance Committee (HLCC) and the State Level Single Window Committee (SLSWC) had approved a total of 255 projects in the financial year 2013-14. Of these, only 24 projects were implemented. In 2014-15, the number of industry projects cleared came down to 108 and only seven of them were implemented. Interestingly, Chief Minister Siddaramaiah is the chairman of HLCC, and he was holding the Industry and Commerce portfolio till August last year.

The flow of investments appears to be far better during the previous BJP governments despite the State witnessing a long spell of political instability. As many as 776 projects and 470 projects were cleared by HLCC and SLSWC in 2012-13 and 2011-12, respectively. The government is yet release the statistics for 2015-16. But there was not much difference between the two governments as far as implementation of these projects are concerned.

Though a huge amount of investments flowed in during the two editions of the global investors' meet organised in 2010 and 2012, only a few of them were implemented. Of the 578 memorandums of understandings (MoUs) worth Rs 11.98 lakh crore signed during these GIMs, only 122 projects were implemented. The iron and steel sector alone had attracted Rs 2.43 crores investments. Two big steel manufacturers, ArcelorMittal and Posco, had pledged to invest in Karnataka in 2010 GIM. But none of them was able to implement their projects due to turbulence in the mining and land acquisition problems.

Representatives of industry bodies, who did not want to be named, attributed the problem of shrinking investments and projects not being implemented to the slackness in administration and bureaucratic red tape. Besides, the government has not been able implement a number of infrastructure projects taken up under the public-private partnership basis. For instance, none of the five minor airport projects planned to be taken up in Kalaburagi, Vijayapura, Shivamogga, Hassan and Ballari long ago has been completed.

Industry bodies believe that nothing concrete has been done to address the problem of infrastructure inadequacy, especially in the State capital. Erratic power supply and non-availability of land have been the biggest concerns of investors planning to set up shops in the State. The power supply-demand gap has been widening by the day, forcing the government to buy power at a high cost.

Besides, the government recently trashed the land bank scheme introduced by the previous BJP government. The investors fear that the 2013 Land Acquisition Act – the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 – adopted by the government would delay implementation of infrastructure projects. The government is, nevertheless, showcasing 112 infrastructure projects to be taken up under public-private partnership, most of which are planned to upgrade infrastructure in Bengaluru, at the meet.

Govt hopeful
However, the government is hopeful that the recent initiatives taken by it for ensuring ease of doing business will boost the industry sector. It has set up a dedicated single-window agency for project approvals under the Karnataka Facilitation Act 2012 and an online project approval system has been introduced through an single-window portal (www.ebizkarnataka.gov.in).

Additional Chief Secretary to Commerce and Industry department K Ratna Prabha said the Invest Karnataka meet had received an overwhelming response from investors across the globe. As many as 3,700 delegates have registered to participate in the three-day event. “The government has taken several measures to ensure industry-friendly climate in Karnataka and investors have been very positive in their response,” she added.