The recurring mirage of mega investment

Politicians in Karnataka often make tall claims about the huge investments flowing into the state, but the reality seems quite different. Between 2018-2019 and 2023-2024, the state approved 122 investment plans worth Rs 4.29 lakh crore, saying it would lead to the creation of 3.52 lakh jobs. Of this, only 11 per cent has materialised.

During a recent review meeting held by Chief Minister Siddaramaiah, it came to light that only 38 projects worth Rs 51,229 crore were implemented, and had generated about 34,000 jobs. Not a single project was implemented in the nine districts of Chamarajanagar, Chikkaballapur, Chitradurga, Dakshina Kannada, Davangere, Kolar, Koppal, Vijayapura, and Ramanagara. For various reasons, nearly 40 projects have been grounded in Bengaluru Rural, Bengaluru Urban, Bagalkot, Ballari, Belagavi, Dharwad, Gadag, Haveri, Kalaburagi, Tumakuru, and Mysuru.

In June, addressing a curtain-raiser for the Global Investors Meet scheduled for February 2025, Siddaramaiah announced that Karnataka aimed to achieve an industrial growth of 15-16 per cent annually — but given the dismal performance in attracting investments, this could remain a far cry, especially considering that the growth rate over the last decade was 9.3 per cent.

Though Karnataka asserts it is a business-friendly state, corporates have for long complained about the notorious bureaucratic red tape leading to undue delay in approvals, consequently upsetting business plans. A single window agency was set up many years ago to ensure seamless project approvals, but it has not helped much, with investors having to run from pillar to post.

For decades, politicians have spoken about a ‘Beyond Bengaluru’ policy to shift investments to the other regions of Karnataka, but the state has failed to create the required infrastructure or the talent pool to make the rest of Karnataka attractive to investors. While investors continue to prefer Bengaluru and surrounding areas, the government should not lose sight of the fact that the capital city could soon lose its sheen given its crumbling infrastructure, paucity of water, traffic snarls, and other civic problems. While Karnataka has attained the image of being laid back and lackadaisical, states like Tamil Nadu and Maharashtra are considered more proactive and aggressive.

Karnataka’s Major Industries Minister M B Patil says the state does not need to offer subsidies to attract investments as it enjoys a competitive edge over the others on various economic parameters. But the numbers speak otherwise, and it appears that the bureaucrats and politicians are living in a make-believe world.

Attracting investments does not end with merely laying the red carpet during the Global Investors Meet; it calls for the creation of a conducive atmosphere, which includes delivery of hassle-free and quick approvals, provision of incentives to new age industries, development of infrastructure in the districts, and an assurance of overall ease of doing business.