Why corporate India loves Karnataka

Corporate India has made investment announcements in excess of Rs 6,72,000 crore ($149 billion) in the last three months, an Assocham Eco Pulse study has claimed.

Karnataka was the favourite state for Indian companies, which announced investments worth Rs 63,000 crore ($14 billion) in the state in the power, petrochemical and cement sectors. The companies have indicated a spread of 3-5 years for their plans to fructify.

Other states which received massive investment pledges include Orissa (Rs 47,000 crore), Maharashtra (Rs 36,000 crore), Chattisgarh (Rs 33,000 crore), and Gujarat (Rs 25,000 crore). The energy sector cornered investments of Rs 1,78,000 crore ($39.5 billion), the most for any sector.

Hoping to ride the steel boom, Arcelor Mittal, Posco, Jindal Steel and Essar have made a beeline for Orissa, pitching it as the best option for the industry. As much as Rs 47,000 crore ($10 billion) of investments were announced in the state between June 15 and August 31, the period tracked by the study.

The Tata group topped the list of prospective investors, announcing investments of Rs 1,20,000 crore ($26.6 billion), followed by ONGC at Rs 1,14,000 crore ($25 billion), and RIL at Rs 59,000 crore ($13 billion).

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attitude of the state government, tax incentives, resource availability and accessibility, increasing market demand, and competition from foreign counterparts were driving the capital investments in the states, the study added.

The top five states cornered 30 per cent of the total investments. Haryana, Jharkhand and Andhra Pradesh saw investment declarations of Rs 25,000 crore, Rs 23,000 crore, and Rs 10,000 crore, respectively.

West Bengal, Tamil Nadu, Kerala, Punjab, Rajasthan, Uttar Pradesh, Daman, and Uttaranchal received moderate investments, while Himachal Pradesh, Bihar, Assam and Delhi performed poorly, with investment declarations of less than Rs 800 crore.

The national capital was increasingly losing out to adjoining areas like Gurgaon, Noida, Greater Noida, Ghaziabad, and Faridabad in terms of investor interest, the study added.