Think beyond Bengaluru

That too much of Karnataka’s economic strength is concentrated in Bengaluru and not enough attention has been paid to developing other parts of the state has been known for at least 20 years now. But, has anything been done by successive governments to change that?

In government, whenever leaders are asked about some kind of development, they reply that it is under way. That’s probably the answer in this case, too. It is happening. But it is also obvious that any efforts made so far has either been too feeble or wrong. They haven’t produced the desired result. If anything, the contrast between the capital region and the rest of the state is only growing.

Surprisingly, this is despite the fact that only about one-eighth of Karnataka’s MLAs are elected from Bengaluru and its suburbs. Given this, one would think that the majority of lawmakers would have an interest in seeing other areas develop, rather than just Bengaluru. But that’s not what we see.

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Why? One answer is that many MLAs from other parts of the state are personally invested -- in land, particularly -- in and around Bengaluru. So, they sustain the ever-increasing demand for housing, offices and other needs in the city. Another answer is that building economic competitiveness in other areas is not easy, and since not too many people in public offices want to do the hard work to achieve that, the status quo remains.

There are those who argue that we should not discourage more growth in Bengaluru. Since global economic competitiveness results from large clusters of competence, we should encourage more investment, especially in the IT sector, to happen here so that the skill levels and capacities of local firms rises steadily, and they are able to attract more and more customers from all over the world.

That may be right, but even in that case, we would need to develop the rest of the state to keep pace with change in Bengaluru. Else, 25 years from now, about one in three people in the state may be living in this region, at a very different economic scale than those in all the other places.

Given all this, what are our options? The usual response to this question has been that each region of the state has specific strengths based on its economic history and we need to build on them to grow the size of the regional economies. And we should try to disperse investors’ interest into the districts so that new companies create jobs in those places.

But in practice, this is hard to achieve. Private investment is motivated by a variety of factors, and each enterprise is further guided by its particular goals. Steering them toward a state-level goal to disperse development may be beyond the government’s capacity.

Besides, there is one other factor. While many Chief Ministers at different times have said they wish to encourage development outside Bengaluru, those statements were not backed by specific actions that the government itself could have taken toward that goal. Telling private investors what they should be doing while neglecting a lot of what the Sarkar itself could do sends the wrong signal. The first steps have to be from the government, and they have to be powerful enough to change this perception. Two things come to mind.

One, the agenda of dispersing development should be reflected in the state budget. Merely carrying out projects in different parts of the state is not enough. There has to be a specific provision in the budget for this goal, and it has to be substantial enough to send a signal to society and markets that the government is serious.

Second, we should incentivise municipal councils and panchayats to become drivers of local development. We’ve spent a lot of time trying to incentivise investors, but we have not paid much attention to what the local bodies can do. For example, we could assign a portion of the taxes generated from investments in the districts to the local councils there directly. That would spur elected officials to work to bring new investments, whereas now they believe that anything they do only fills the state government’s coffers and doesn’t result in any direct benefit to their area.

A genuine shift to push development in the rest of the state would be immensely popular with the public, not only in those places but also in Bengaluru. But the political leadership has so far not seen fit to think what the public wants.