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Windfall for Karnataka from Global Investors' Meet

Fakir Chand in Bangalore

A year after the first Global Investors' Meet was held in Bangalore, the ruling Congress government in Karnataka is upbeat over the flow of investments into the state, global industrial recession and slowdown in the Indian economy notwithstanding.

Karnataka minister for medium and heavy industries R V Deshpande came out with a fact sheet on Thursday to give an account of the industrial scenario across the state post-GIM.

"Out of the Rs 270 billion worth global investments that were proposed at the GIM, involving 254 projects, a record Rs 104 billion investments have been made during the last 12 months, with 112 projects taking off the ground. In short, in the first year itself, we have achieved a growth rate of 38 per cent in terms of investments raised and 44 per cent in project execution," Deshpande claimed.

In the case of foreign direct investment, the state stood third in the all-India rank, next only to Maharashtra and Tamil Nadu with Rs 42 billion coming into the state during 2000, mostly in the new economy sector, including information technology, bio-technology and food-processing.

During the last two years of the Congress government, the state has attracted over Rs 60 billion FDI, involving about 270 projects. Interestingly, the largest investment of Rs 35 billion came from Belgium during the last couple of years, followed by the United States with Rs 25 billion, Rs 18 billion from Germany, Rs 15 billion from Japan, and Rs 12 billion from Mauritius.

"The high-level committee of the state industry department had cleared 32 mega projects with a cumulative investment of Rs 135 billion, while the single window agency had cleared about 130 projects with a total investment of Rs 25 billion," Deshpande disclosed.

Giving details of the status of the investments, the minister said out of the 47 mega project proposals that were made at the GIM, involving a total investment of Rs 231 billion, only one project had been commissioned, while 12 projects with an investment of Rs 76 billion are in progress, and 33 of them with an investment of Rs 150 billion are at the approval stage.

In the case of small and medium projects through the single window agency, out of the 178 projects that were inked at the GIM, involving a cumulative investment of Rs 23 billion, about 30 projects were commissioned with an investment of Rs 3.3 billion, while 47 projects involving an investment of Rs 6.11 billion are in progress, and as many as 79 of them with an investment of Rs 12 billion are at the approval stage.

Deshpande, however, admitted that 5 projects under the SMIs were dropped, while one mega project did not take off. The investments were in the order of Rs 950 million.

In the tourism sector, the state government had cleared 29 projects, involving a total investment of Rs 17.25 billion. Out of which 5 projects with an investment of Rs 390 million were commissioned, while 15 projects worth Rs 11.53 billion were in progress, and 7 projects with an investment of Rs 250 million were at the approval stage. Two projects worth Rs 5.09 billion have been dropped out of the proposals.

The projects, which are at various stages of implementation, are expected to generate over 26,000 jobs across the state. "We expect the remaining projects to be commissioned in the next couple of years as some of the projects, including infrastructure ones such as power, roads, etc will take a longer gestation period," Deshpande affirmed.

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