31 large industries closed in 3 years, many in north Karnataka: Govt

dire days

Some 4,257 people lost jobs as 31 large and medium industries have shut shop in the state over the last three years even as the state government pushes hard on reforms after Karnataka nosedived in the ease-of-doing-business rankings.

“There is no link between the industries that closed and our drop in the ease of doing business rankings,” Industries Minister Jagadish Shettar told DH. “The industries that closed had their own reasons,” he added.

According to data tabled in the Legislative Assembly, 19 of the 31 large and medium industries that have closed down were located in north Karnataka, a region where the government wants to attract investments.

In terms of job losses, over 2,000 people were affected due to the closure of Falcon Tyres, Flair Garments, Indus Fila and Zenith Textiles in the Mysuru district. In Koppal, Hindustan Coca Cola Beverages closed due to “lingering labour issues”, the government said.

In the remaining 511 large and medium industries, a total of 2.68 lakh people are employed.

Karnataka dropped to the 17th position in the ease of doing business ranking published by the Department for Promotion of Industry & Internal Trade (DPIIT) from the 8th position earlier.

“The guidelines used for the rankings are not right and we have challenged the rankings,” Shettar said, adding that several other states had raised objections as well. “The rankings were based on a period when the state witnessed political instability,” the minister said.

The state government has argued that it has consistently figured among the top Indian states in attracting investments.

Since August this year, Karnataka has cleared 147 projects worth Rs 22,110.84 crore with the promise of creating 54,736 jobs. In the State High-Level Clearance Committee (SHLCC) meeting held on September 30 under Chief Minister B S Yediyurappa, six projects with an estimated investment of Rs 15,544.06 crore and employment potential of 21,028 jobs were cleared.

The State Level Single Window Clearance Committee (SLSWCC) headed by Shettar, during its meetings on August 19 and October 1 approved 141 projects worth Rs 6,566.78 crore with a potential to generate 33,708 jobs.

The government said it cannot reveal more details due to the election model code of conduct.

“Now that we have amended the Karnataka Industries (Facilitation) Act, we are confident that our ease of doing business rank will improve,” Shettar said.

The amended law provides temporary clearances to establish industries and companies will get three years to apply for various clearances. The government is also working on automated trade licence renewal and streamlining industrial inspections.