Dollar dreams in the land of rupees

When sounding calls to strengthen Karnataka's industrial sector, its draconian and anti-worker policies are often ignored

Close to Karnataka hosting the global investment meet was the release of a report, Karnataka: A $1 Trillion GDP Vision that has been endorsed by the government of Karnataka. Authored by TV Mohandas Pai and Nisha Holla, the booklet has been anchored by the Bengaluru-based 3One4Capital investment advisory and venture capital firm.

The authors draw on a range of data sources and recommend a host of investment opportunities that they claim will make Karnataka a leading state in the new $5 trillion economy that India is envisaged to become. Identifying 13 key agendas by which such an economic dream can be realised, the authors highlight possibilities in the three key sectors of industry, agriculture, and services.

Although data indicate that the industrial sector, especially the micro, small, and medium industries, has declined, Pai and Holla do not identify what factors accounted for such a decline. Instead, comparing the fact that Karnataka’s Gross State Value Added (GSVA) for the industry is only 19.8 per cent as compared to Gujarat’s, which is 43 per cent, they call for enhancing Karnataka’s industrial sector so that its growth can be as competitive as that of Gujarat’s.

Yet, in the context of making recommendations for reviving and strengthening the industrial sector, Pai and Holla take no note of the draconian and anti-worker policies that the state has recently formulated. Nor do they recognise the links between a large speculative economy, an unaccountable and corrupt political regime, and the railroaded democratic structures that have combined to strap many of the industrial units in the state.

Similarly, there is the suggestion that the rural population be ‘rebalanced’ with the workforce shifting from “agriculture to higher wage opportunities in the industrial and service sectors”. That a sizeable population of circulating and migratory rural populations already exists and that they bear the burdens of being part of an insecure, precarious, and vulnerable citizenry are issues that are not addressed. Bengaluru, for the authors, is the ‘jewel in the crown of Karnataka’ and they recommend more investment, especially in its infrastructure. Such infrastructure is not only to enhance the quality of life for all citizens but also to strengthen the competitive edge of the city so that it emerges by 2027 as the ‘world’s largest pool of software talent amongst other specialisations’ thereby beating Silicon Valley. That Bengaluru already receives a sizable share of development funding despite the fact that poor administration and corruption have rendered it largely inhabitable are unaccounted for issues.

Pai and Holla must be commended for recognising the importance of social sectors such as education, health, nutrition, housing, and water supply and calling for increased expenditure in these foundational domains. They emphasise the need to have region-specific policies for the different regions of Karnataka and to bridge the gap between the various regions.

But the recommendations for the state to support such foundational structures are not met with an audit of past and current expenditures. What has been the cost to the social development of the state where populist policies and vote-bank gathering strategies have meant funds for institutions such as caste-development corporations, temples, and for the construction of statues? Further, the fact that the state government has promulgated via ordinance Acts such as the ‘Land Reform Act 2020’ which has now facilitated both the sale and acquisition of vast tracts of land from cultivators into the hands of speculators (and not necessarily industrialists), and which has significance for the long-term economic growth and overall welfare of large proportions of the population, are issues that are not addressed.

The acceptance of this report aligns with the state government’s decision to rename the State Planning Commission and Board as the ‘State Institute for Transformation of Karnataka’ (SITK), a clone of the ‘National Institute for Transformation of India’ or NITI Aayog, and indicates this government’s acceptance of the dilution of Karnataka’s standing in the federal structure and its submission to centre-prescribed structures, norms, and values of administration. Karnataka has lost its fair allocation from GST and other funds, despite high contributions to the central coffers, and this is only one significant way in which current fiscal policies privilege not the interests of Karnataka but those of a larger political entity.

The report expects us to dream in dollars while our realities are in rupees. How can economic stability be balanced with environmental sustainability and social justice? Any policy or economic advice should attempt to answer these questions. The overarching supporting factors are quality public institutions and democratic processes that can represent the interests of the majority. Alas, Karnataka has increasingly lost its ability to forge and deploy sensitive and relevant policies, and a small coterie of people with limited professional perspectives but tremendous political clout seem to have the ears of the government. This report is also one more example of this.

(The writer is a Social Anthropologist.)