Proactive policies

THE Karnataka government cleared about 72 industrial projects worth Rs.2,32,311 crore in the first three months of this year. The Global Investors Meet (GIM) to be held in Bangalore on June 3 and 4 is another opportunity for the government to attract investment. In an interview to Frontline, Murugesh R. Nirani, Minister for Large and Medium Scale Industries, spoke about the proactive and investor-friendly government and its sectoral policies.

What is the focus of the GIM?

The focus is to attract investments in all sectors. The State has identified the following sectors for investments: aerospace, infrastructure, tourism, information technology [IT], automobiles, biotechnology, minerals, power, foodprocessing, textiles, health and education. During the event, MoUs [memoranda of understanding] will be signed with investors to facilitate the implementation of projects. I expect investments to cross Rs.2,00,000 crore.

You undertook a number of road shows in India and abroad for the GIM. What was the response?

The response in Delhi and Mumbai was overwhelming. An exclusive road show for foreign diplomats in New Delhi was organised in January so that they could disseminate the information about the GIM in their respective countries. In addition, road shows were organised in Seoul and Singapore, where 55 and 110 companies respectively participated.

Incidentally, I led a high-level delegation that participated in these shows. Last September, a delegation led by the Chief Minister [B.S. Yeddyurappa] visited China. During the visit, road shows were organised in Beijing and Shanghai. A small delegation from there visited Tokyo and a road show was organised there in association with JETRO [Japanese External Trade Organisation].

Karnataka has been overtaken by Gujarat, Tamil Nadu and some other States in terms of industrial and technological initiatives. Why?

Karnataka has been attracting significant investments. During 2009-10, the State cleared 473 projects with investments worth Rs.2,92,000 crore. The government recently brought out the New Industrial Policy 2009-14' after studying various incentives offered by States such as Gujarat, Andhra Pradesh, Tamil Nadu and Maharashtra.

In Karnataka, the shortage of power and lack of good infrastructure are seen to have stifled growth. What steps are being taken in these areas?

The government has taken several initiatives to increase power generation. The 1,200-mega watt (MW) Udupi Power Corporation is due to be completed in May. An additional 250 MW is to be synchronised at the Raichur Thermal Power Station in May itself. Besides, 500 MW capacity will be added shortly to the Bellary Thermal Power plant.

Further, the State has initiated projects to meet future power requirements. Projects at Yermarus (2x800 MW) and Yellapur (800 MW), both in collaboration with BHEL, are on the anvil. Apart from this, NTPC is establishing a 4,000 MW power plant at Kudgi, for which it has paid Rs.45 crore towards land procurement. Power Company of Karnataka Ltd. has secured approvals for setting up plants at Jewargi and Ghataprabha, of 1,320 MW capacity each, through private investment.

The State has also signed an MoU with the government of Chhattisgarh for setting up a 1,600 MW power plant at the pithead in Jangir, Champa district.

Several private sector power projects have also been approved. The gas pipeline by GAIL will also open up avenues for power generation.

On infrastructure

Several industrial corridors have been planned. As part of the Suvarna Karnataka Development Corridor, projects, to be implemented in the PPP [public private partnership] mode, have been identified in the following corridors:

Bidar-Gulbarga-Bellary-Hiriyur, Tumkur-Honnavar via Shimoga, Chitradurga-Mangalore via Shimoga-Udupi, Chitradurga-Hospet-Koppal-Raichur, Chitradurga-Hospet-Bagalkot-Bijapur and Belgaum-Bangalore along National Highway-4.

Sector-specific industrial areas are also being established for the optimum utilisation of locally available resources through the PPP model. Expressions of Interest (EoI) have been called for a steel ancillary park (500 acre) in Bellary, an engineering park (200 acre) in Chitradurga, an engineering park (500 acre) in Tumkur, an integrated industrial township (1,000 acre) in Dharwad, a defence manufacturing hub (500 acre) in Chitradurga, a multi-product SEZ (2,500 acre) in Bijapur, and a textile SEZ (300 acre) in Bangalore Rural.

In the second phase, over 10 projects in sectors such as IT, food processing, pharmaceuticals, aerospace, education and commercial establishments, covering over 2,000 acres, have been identified. The EoIs for these will be announced shortly.

What efforts have been made to make Karnataka the number one destination for investments?

The Infrastructure Development Department was created to coordinate with various PPP projects. It has identified 112 PPP projects worth Rs.98,837 crore. The State has brought out an infrastructure policy. We have also offered a number of tax concessions and stamp-duty exemptions.

While sectors such as IT and biotechnology have done reasonably well, others, notably manufacturing and automobiles, have not.

We have brought out exclusive policies for minerals, textiles and viticulture. Karnataka is also in the process of introducing an entrepreneur-friendly food processing policy.

The government had spoken of finishing schools for skilled workers and of upgrading the Industrial Training Institutes into centres of excellence. What has happened to these proposals?

The Department of Employment & Training is dealing with these issues.

Will Karnataka simplify rules to quicken industrial development?

In 2008-09, investment approvals fell in the State. Karnataka was the first State in the country to bring legislation, the Karnataka Industries (Facilitation) Act, 2002, with the aim of easing the business environment in the State. We are also in the process of liberalising further the investment process and making the single window system more effective.

The Central and State governments had announced the setting up of food parks, which will help rural and agro industries and accelerate economic growth. What is the progress on this front?

The Government of India approved four food parks under the 10th Five-Year Plan at Malur (Kolar), Hiriyur (Chitradurga), Navanagar (Bagalkot) and Jewargi (Gulbarga).

The food parks at Malur and Hiriyur are in advanced stages of implementation and will be showcased at the GIM. The parks at Jewargi and Bagalkot are expected to be operational by December.

In the 2008-09 Budget, the government approved food parks in Bangalore Rural, Tumkur, Shimoga, Davangere, Bijapur and Belgaum. The food park in Bangalore Rural is being established by Food Karnataka Ltd. The process of calling for tenders has begun for the 129-acre spice park at Bydagi (Haveri), which was announced in the 2009-10 Budget.