We're trying to resolve issues with ease of doing business: Jagadish Shettar

In 2020, Karnataka took up major reforms for ease of doing business. However, Minister of Large and Medium Scale Industries, Karnataka, Jagadish Shettar in a chat with DH’s Shruthi H M Sastry and Ahmed Shariff, admits that much more needs to be done. Excerpts:

Drawing investments is crucial for the post-pandemic economic recovery. What is the outlook for the new fiscal?

During the 2020 Davos summit, we received many suggestions for boosting investment. We were told by industry representatives that purchase of land was a huge problem in Karnataka. We amended the Land Reforms Act to resolve this. This will make an impact as Karnataka had restrictions that neighbouring states did not. Another reform was the amendment to the Industries (Facilitation) Act allowing industrialists to start their venture immediately after their proposals are approved.

By signing self-proclaimed affidavits, they will commence operations and will be given three years time to get all the other requisite clearances. As a result of this, numerous enquiries are coming to Udyog Mitra. I’m hopeful that the same will continue in 2021. Also, according to a Department for Promotion of Industry and Internal Trade (DPIIT) survey, there were 1,188 proposals across India between January and October 2020 worth Rs 3.76 lakh crore. Of this, Karnataka’s share is 95 proposals of Rs 1.54 lakh crore. From April 2020 till now, Karnataka has received 448 proposals. These are all positive aspects for investment in the state. My aim is to make Karnataka number one in industrial development.

Successive governments have spoken about diversifying investments across the state, but they remain focussed in and around Bengaluru.

Historically, industrial development has been Bengaluru-centric. There’s a lot of burden on Bengaluru. So, land and labour costs are more here. My aim is to shift industries to Tier-2, Tier-3 cities. We’ve formulated the Industrial Policy 2020-2025 in line with this. Many proposals are coming to North Karnataka. Several pharma companies have shown interest in investing in Raichur, where we’re developing 4,000 acres of land. Over 30 pharma industries have shifted to Kadaichur near Raichur from Hyderabad. This is because of low land and labour rates.

The Centre has proposed a pharma park and we’ve submitted a proposal. We’re ready to give 1,000 acres for this in Kadaichur. This is a boost for industries in the Kalyana Karnataka region. On January 9, we will lay the foundation for the Koppal toy cluster. This will create 20,000- 30,000 jobs in Kalyana Karnataka. Also, FMCGs are coming to Hubbali-Dharwad and Davangere, Mysuru, Vijayapura, Kalaburagi are attracting investments as well.

Industrialists have expressed concerns that frequent changes to GST regulations go against the idea of ease of doing business.

I’m interacting with industry associations. From our department, we’re giving all the cooperation needed. If there’s any issue concerning the Centre, I’ll bring it to the attention of the union ministers concerned.

Karnataka has been bullish on ease of doing business. Has this translated into more investments?

We’re trying to resolve all the issues pertaining to ease of doing business. Earlier, there were complaints of delay in Udyog Mitra, which we’re now resolving. We’re responding to enquiries quicker. Every month, we conduct state-level committee meetings. Now, be it two or five proposals, these meetings will be held. We’re trying to clear proposals as early as possible.

You mentioned land prices. That seems to be a dampener for investments. For instance, Ola chose Hosur for its manufacturing hub.

When compared with other states, land rates are higher in Karnataka. I’ve taken a policy decision that whenever the Karnataka Industrial Area Development Board (KIADB) takes up development in a new area, the tentative price fixed at the beginning should be inclusive of a future estimation of rates. After five years, at the time of the completion of the project, if there is an enhancement of rates, it should not cross 20% of the tentative price. Land acquisition is a challenge. We’re trying to fix the problem by giving reasonable compensation to farmers.

What are the plans lined up for development of Karnataka’s coastal region?

We’re considering a proposal for a Special Economic Zone for the coastal belt. We are planning to develop the Belekeri port in Karwar to boost exports. When I met Nitin Gadkari in New Delhi, he spoke about the development of the port. Karwar airport is also under development. Several proposals are lined up for Mangaluru and Udupi, too.

Industrialists have experienced problems with ‘steep’ property taxes being levied in municipal areas. What steps are being taken to address this issue?

Last week, I held a meeting with Urban Development Minister Byrathi Basavaraj and other concerned officers. I requested them to come up with a tax slab in between the commercial and residential slabs to aid industries. We will address this issue as early as possible.

The Centre has approved Tumakuru as an industrial node under the Chennai-Bengaluru Industrial Corridor. What’s the way forward?

So far, KIADB has acquired 1,722 acres for the project. The government has given its approval for Rs 1,701 crore sanction for the project. We will start the tender process and by April, we will start development work. After development of that node, the Centre will also pitch in by sending investors here. This industrial node will give opportunities to create employment in the region.

There are concerns that the recent Wistron incident will affect investor sentiment in Karnataka.

I don’t think it will impact investment. Wistron clarified that there were errors from their end. According to me, if there was a delay in payment, employees should not take law into their hands. The company, too, has admitted to certain lapses. We are in touch with them they have assured that they want to start operations soon.