Column : Karnataka’s manufacturing deficit

Jun 12 2012, 12:28 IST
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SummaryDespite the Global Investors Meet, the state is still perceived as an IT hub.

For Karnataka chief minister DV Sadananda Gowda, the state-sponsored Global Investors Meet (GIM) may have come at a good time. The two-day event has taken away some of the media attention from BJP’s political woes in the state. Investments to the tune of R6 lakh crore have been promised. Not that anyone is buying into such fantasies. Last time too, such astronomical figures were quoted but very few investments were actually realised. The chief minister has his predecessor BS Yeddyurappa breathing down his neck all the time and the GIM must have given him some space to stretch himself.

On Wednesday, Gowda said the idea was to attract significant investments in the energy and infrastructure sectors. Over 80 Fortune 500 companies are said to be participating, though it was tough to arrive at that number on last count. Large business houses like the Aditya Birla Group, JSW and Suzlon announced large investments in the state during the event. Signing up for a high-speed train network with the Japanese is part of the agenda as well. Setting up an aerospace park is another project on the anvil. The state’s industries minister, Murugesh Nirani, has said that most of the investments will be made in cluster-based industries such as plastic, packaging, aerospace and pharmaceuticals. He said the expectation was that 70% of the proposed investments will be made over the next five years.

“We now seek to replicate our success in the services sector in the manufacturing sector,” said Sadananda Gowda during the GIM. The state plans to increase its expenditure on infrastructure from the current 3.2% of gross state domestic product to nearly 9% during the 12th Five Year Plan. Now, Karnataka has always dreamed of developing its manufacturing prowess along the lines of Tamil Nadu. But the task has not proved to be easy. The industry still does not think the state has the wherewithal to pull off a manufacturing coup. The state needs to develop its ports to stand any chance of emulating its software success in the manufacturing arena. Land acquisition too has been a major bottleneck for successive governments. As Infosys founder NR Narayana Murthy said, the state needs to learn how to take development beyond Bangalore. “Karnataka needs to walk a long way to emerge as an industrial hub and, to achieve this, the state government has to work harder in terms of providing infrastructure and educational institutions

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