Our Aim Is To See Karnataka As Number One In Industrial Development Before We Complete Our Term: Industries Minister Jagadish Shettar
The government is gearing to facilitate ease of doing business in Karnataka, says the state’s Minister for Large and Medium Scale Industries, Jagadish Shettar.
This new wave of industrialisation will be a game-changer for the region and the state, he says.
Karnataka’s plans to revamp its industrial landscape may have seen a slowdown as the Covid-19 pandemic struck but it is steadily on the path to recovery.
Recently, the central government announced the establishment of three major industrial corridors, of which one comes to Karnataka’s kitty with Rs 1,701.81 crore sanctioned for Tumakuru.
This is the latest among many major changes the state has envisioned for an industrialised Karnataka, Minister for Large and Medium Scale Industries, Jagadish Shettar, says in an interview to Swarajya.
Excerpts from the interview:
The Tumkur industrial corridor is said to make Karnataka a part of the global value chain. Can you elaborate on that? What kind of investment, employment generation and industries are we expecting and how would it affect the region?
The Karnataka Industrial Areas Development Board (KIADB) is acquiring 9,600 acres of land of which 1,722 acres have already been acquired towards which the state government has contributed Rs 600 crore as a one-time assistance to the project.
The central government is also participating in the development of this area on a 50-50 sharing basis because it comes under the Chennai-Bengaluru Industrial Corridor.
The Cabinet Committee on Economic Affairs (CCEA) approved the first phase of the Vasanthanarasapura, Tumakuru Node on 30 December at a cost of Rs 1,701.81 crore of which Rs 1,041.36 crore is for development of infrastructure and Rs 660.45 crore for acquisition.
We will invite tender for the phase in February and work will be entrusted in April 2021. We are looking at all scales of industries. The Centre too will send companies and investors, who approach them, to Karnataka.
Talking about Chennai-Bengaluru, we recently lost a few major investments to Tamil Nadu. What is it that Karnataka is lacking and how do we fix it?
It is not a question of losing anything. We have to look at it as investment that is happening in different parts of our own country. Let us not differentiate between states.
We have Toyota in Bidadi, Tata in Dharwad and many more, and hence it is not the question of losing out — we are putting all our efforts but the whole nation, every state, is competing internally to ensure industrialisation and attract companies.
We have announced a new industrial policy, so many incentives, so many tax concessions, 100 per cent stamp duty exceptions and much more. But there will always be someone who may offer something more and get certain deals.
But if you look at the number of proposals, even during the Covid period — the highest investment proposals were in Karnataka.
If you look at the numbers, from January 2020 to end of October, there were 1,188 proposals worth Rs 376,397 crore. Of this, 95 proposals were from Karnataka costing around Rs 154,937 crore which is 41 per cent of the total. So, we are doing what it takes.
There have been talks of diversifying investment to tier-2 cities in the state. But companies still seem reluctant to go beyond Bengaluru. What is being done in this regard — especially since you have been focusing on North Karnataka, which didn't receive much attention all these years?
My focus as a Minister for Industries has been to shift the Bengaluru-centric investment to tier-2 and tier-3 cities. So after declaring the industrial policy, we saw a lot of industries wishing to invest in north Karnataka.
There was no industry, say for instance, in Kadaichur region, until our government came to power. After we took over, I had been to Hyderabad for a road show where we met a lot of pharma companies and offered them low land rates, ample labour and other incentives.
This has resulted in over 40-50 pharma companies wanting to set up base in Kadaichur. So, the development has begun and it will help the whole of Kalyana Karnataka region.
What are the kind of numbers we are looking at? Also, given the funds available with KKRDB (Kalyana Karnataka Regional Development Board) for the development of the region, how much of it would be utilised for industrialisation?
The KKRDB funds are for the overall development. When it comes to industries, the KIADB has developed 4,000 acres in Kadaichur in the last eight to10, the pace of development has increased since we took over.
We declared Koppala a toy cluster. Aequs is now starting work and on 9 January the bhoomi puje will take place presided by the Chief Minister. Around 400 acres are being developed for the toy cluster by Aequs, and within six months of the bhoomi puje they will start operations.
I have also requested Minister for Chemicals and Fertilisers Sadananda Gowda ji for a pharma park, since Modi ji had decided that a few states would host pharma parks sanctioned by the Centre.
We have also submitted a proposal where we have offered 1,000 acres of land in Kadaichur and if we avail it, it would be a huge booster for that area. We should know about it in the next two to three months.
Wherever investors are willing to come, we have offered all possible help and incentives from the state. Like in Hubli Dharwad, Aequs is also investing on a large scale in the electronic consumer goods sector which brings in an investment of around Rs 2,000 crore and 10-15 companies, and which would result in the creation of around 20,000 jobs.
FMCG industries have also proposed investment in the region and they are being now considered by the finance department. UFlex, which is India’s largest packaging company, is investing Rs 1,500 crore in the region. So, overall, this new wave of facilitating industry will be a game-changer for the region and the state.
Having initiated land and agri reforms, what does the state intend to do about labour reforms, especially in the context of recent incidents like Wistron?
We have put an ordinance in this regard too. But, though we want to protect the interests of the industry, they have to look into their management — it is up to them to address their internal issues — it is not the day-to-day concern of the government.
We will provide all the support to start and run the industry — but the hiring, the contract labour, the agencies involved — in recent cases the agencies haven’t paid the labour though the companies had paid them — have to be managed by the companies.
Wistron too admitted there were certain lapses. But labour can't take law into their own hands. We are in touch with the management and they have assured they will start operations.
What about diversification to other parts like say coastal Karnataka which has stayed put for decades? Tier-2 cities, although they have been part of many industrial policies in the past, haven’t really benefitted by this zonal division. Why not have clusters instead?
Like, I mentioned before, for instance the Uflex packaging company, whose chairman is from Uttar Pradesh and they have their units in Delhi and Jammu Kashmir — they have no presence in southern India. So they wanted to set up a unit in either Karnataka or Tamil Nadu.
He met me three-four months ago, and wanted land near Bengaluru. We said we would give land near Bengaluru but we also offered them other options and told them to check them out.
Their officials then examined North Karnataka regions and after examination, they agreed to set up the unit there. Since the proposal has been cleared by myself and our Chief Minister last month, they too will start operations in the next two-three months.
We declared Koppala as a toy cluster, similarly some districts like Hubbali Dharwad as an FMCG cluster. Now some players are coming in.
As far as the coastal areas are concerned, there are some environmental concerns and regulations. But if companies come forward to invest in and around the coast, we are willing to facilitate.
Plans are in place for the development of the Belekeri Port in Karwar — which will also facilitate export and trade. Airport is being developed in Karwar too — all this development will be a game-changer for the coastal region.
Wherever people want to invest beyond Bengaluru — we are willing to provide region-specific incentives.
How does ‘One District-One Product’ fit into the scheme of things as far as the industrialisation agenda of the state is concerned?
It is too early to comment on it. It will take some time to see how it can be practically feasible. We have declared the list but there are so many varieties even within each district — we cannot make a blanket rule or restrict them to one product. It is in the initial stages.
The Prime Minister, while launching the Kochi-Mangaluru gas pipeline, spoke of connectivity and clean energy being the game-changers even on a global scale. How is the state invested in sorting the connectivity issues in the state?
With regard to connectivity — all our state and national highways have been developed. Road connectivity is fairly good in all the districts.
As far as air connectivity is concerned, we are working towards enhancing it. Hubbali was developed recently. Belagavi is also offering more connectivity, even compared to say Huballi.
We have started developing Shivamogga airport. Mysuru is also upscale and there is a proposal to have one at Bellary.
In Bijapur too, which is major tourist centre, we are planning and have identified land. Bidar and Gulbarga projects too have started.
So, if you compare, to say two-three years ago, there were no airports in the state other than Mangaluru and Bengaluru — the only international ones. Now, this enhanced connectivity will surely boost industry.
How does the new industrial policy aim to make Karnataka a global leader?
We amended the Industrial Facilities Act. We implemented two important reforms. In the land reforms — we removed the sections 79 A, B, C among other amendments — so any industrialist who wants to purchase up to 54 acres for his own, he can do so directly from the farmer.
Earlier, he would have to apply under section 9, get permission from the government.
Now he just has to apply to the Udyog Mitra and the process gets fast tracked.
Earlier, even if he did own land, he would have to apply to the the DC, await permission which took around six months and then seek building permission which would take another five-six months, and then the trade licence — another few months.
But all that will be history. As he awaits his clearance, he can set up his industry and fix everything up to operations.
The industry atmosphere is prevailing now and the government is geared to provide all clearances required and do whatever it takes to facilitate ease of doing business.
Earlier board meetings would be held once in two-three months. Now, I have made it mandatory that every month we will hold the board meetings irrespective of the number of proposals — be it five or 10. We meet and ensure the required clearances are provided at the earliest.
In my purview, under the Chief Ministership of B S Yediyurappa, my aim is that we see Karnataka as the number one state in terms of industrial development.
From April 2020, we have approved 448 proposals out of which 410 were new and 38 were expansion plans. A total of Rs 84,047 crore investment proposals, which will create around 182,400 job opportunities, we have approved in a span of eight months.
Rs 5 lakh crore worth investment within five years and 20 lakh employment opportunities are what we are aiming for. The efforts have begun.
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