Industrialisation dreams remain unfulfilled

Govts slow reflexes deter investors; approved projects lagging

The State government faced a major setback when Tatas chose Gujarat for setting up the nano car manufacturing unit, after visiting Karnataka. Gujarat moved fast in sanctioning land and managed to take away the car unit.

Learning from its past mistakes, the government so far has cleared 76 projects with the total investment of Rs 1.95 lakh crore. The figure is expected to go up to Rs 2.5 lakh crore as another 21 projects with investment to the tune of about Rs 58 lakh crore are coming before the next State High level Clearance Committee meeting.

Power, land issues
The projects cleared this year are worth more than the total projects cleared the previous year 2008-09 (Rs 1.10 lakh crore), which saw a global economic slowdown.
However, this doesn’t mean much as long as investors do not execute their projects. V P Baligar, Principal Secretary, Industry, says only 62 per cent of the approved projects are on schedule. Availability of land and power are crucial for attracting investments. On either front, the government’s performance is not commendable. The government has identified only 96,000 acres of land and notified 49,000 acres. Not even an acre has been acquired for land banks in districts. The government intends to acquire at least 50,000 acres before the Global Investors’ Meet scheduled for June this year.
That the Government is not going to find it easy to acquire land from farmers for handing it over to industry is abundantly clear by the agitations in Bellary and elsewhere.
The government is already finding the going tough when it comes to notifying land for Arcelor Mittal’s steel plant in Bellary. In the eco-sensitive Mangalore, the land acquisition for the Special Economic Zone is facing stiff opposition.

As in the previous years, power shortage continues to persist with more talk on the shortage than by efforts to improve its availability. Let alone invest or raise funds for new projects, the Government is not even in a position to purchase power to meet the summer demand for additional power.

* Total projects approved: 76
* Worth of projects cleared: Rs 1.95 lakh crore
* Rate of execution of projects: 62 per cent
* Land identified for land bank: 96,000 acres
* Land notified: 49,000 acres

Industry wishlist
* Reduction of tax levels on par with the neighbouring states
* Simplification of tax return filing process
* Release of funds for rail infrastructure projects
* Improvement in road networking
* Reduction in cross-subsidy in power sector
* Cut in stamp duty on equitable mortage/hypothecation of property
* Introduction of ‘Kar Samadhan’ Scheme to pay commercial taxes arrears
* Abolition of entry tax
* Phase-out of CST as promised
* Reduction of stamp duty & registration charges on documents for loans
* Reduction lifetime road tax