‘The Aim is to build a Sustainable and Futuristic Karnataka’

‘The Aim is to build a Sustainable and Futuristic Karnataka’

Karnataka has emerged as one of the country’s most attractive investment destinations due to the many progressive reforms of the government. The policies, programs and schemes are directed towards building all sectors, throughout the state. “I strongly believe that our aim is to build a holistic, sustainable, and futuristic Karnataka by utilizing the immense opportunity and innovation the state has to offer. We are one of the most important global industrial centres and we also need to make sure to keep up with technology and trends and maintain a standard that helps us compete with international industry leaders. We will offer full support and cooperation to make our state an ideal destination to make investments,” said Murugesh Nirani, Minister for Large Industries, Govt. of Karnataka. In an interview with Advantage Karnataka, the minister talks about the state’s thriving industrial sector, the growth-driving policies and projects of the government and his vision for making Karnataka a top investment destination in the county.

Dr. Murugesh R Nirani

Minister for Large and Medium Industries Government of Karnataka

As the industries minister of one of the most investor-friendly states in India, what are your priorities and plans to make Karnataka No. 1 in the country?

Today, Karnataka has emerged as one of the country’s most attractive investment destinations due to the many progressive reforms of the government. For two successive quarters of the fiscal year 20212022, Karnataka has attracted the highest FDI in the country, close to 46 percent (Rs 2.29 lakh crore) of the total FDI inflow to India.

Good news for the investors and industrialists in Karnataka with the introduction of “10-year Lease-cum-Sale” of Karnataka Industrial Areas Development Board (KIADB) land allotted for the industries.

We have identified 22,655 acres of land that will be acquired for industries, making this the biggest such activity in recent times. Our department has fast-tracked the land acquisition process considering the demand from industries. Our priority is giving a big push to growth. The Karnataka industries department has approved 88 industrial projects worth Rs 2,367.99 crores that are expected to generate jobs for over 10,904 people in the state.

The government recently approved 48 industrial projects worth Rs 2,062 crore. How do you look at this?

At the SLSWCC meeting, the Karnataka government has approved 48 industrial projects worth Rs 2,062 crores that would create massive employment opportunities. The new projects, each with an investment of more than Rs 15 crores but less than Rs 50 crores were cleared. These projects are valued at Rs 724.87 crores. They are expected to generate employment for more than 6,393 people in the state.

Karnataka continues to attract investments in various sectors and has remained a sought-after investment destination in the country. How did the pandemic affect the industrial sector of the state and what are the initiatives taken by the government for the revival?

I am proud to say that Karnataka was one of the first states in the country to reopen

operations and restart supply chains during the lockdown. We understand that our state is the epicentre of global value chains and an abrupt halt to all operations would have cost irreparable damages to industries. Essential incentives and easing regulatory processes to were introduced in order to keep our economy going and make sure our businesses do not suffer.

Karnataka took many bold measures and unique initiatives to facilitate investments and help our economy recover from the unprecedented pandemic we were all forced into. A revolutionary industrial policy for 2020 – 2025 was introduced. The policy aims to boost productivity, create good jobs, and increase the people’s purchasing power throughout our state with investment in infrastructure, skills, and innovative technologies.

Karnataka Industries (Facilitation) (Amendment) Ordinance 2020 was promulgated to facilitate manufacturing industries and enterprises in the state. This was brought about to simplify regulations and reduce procedural requirements and create a conducive investment environment.

The Large and Medium Industries Ministry has been successful in creating an entrepreneurial environment and enhancing investor-friendliness in the state, attracting investment proposals through measures such as the Industrial Infrastructure Amendment, Land Reform Act Amendment, Faster Approval of Business Proposals, and Emphasis on Flexible Business, Affidavit Based Approval, and Deregulation of Regulations. Sectionwise policies like ESDM Special Incentive package, Updated EV policy, ER&D (Engineering Research and Development) policy provide best in class incentives.

You recently held a discussion with a Taiwanese delegation highlighting that Karnataka is an ideal destination to make an investment. How does the government promote foreign investment in the state’s industrial sector?

Karnataka is an ideal destination to make investments. Karnataka and Taiwan share many similarities as both focus on major industries like ESDM, Electric Vehicles, Auto & Auto Components, Healthcare, Engineering & Machine tools, and Innovation. Karnataka is also home to major Taiwanese companies including $30 Bn Wistron Corporation, MediaTek, Delta Electronics, and D-Link.

The policies, programs and schemes are directed towards building all sectors, throughout the state. I strongly believe that our aim is to build a holistic, sustainable, and futuristic Karnataka by utilizing the immense opportunity and innovation the state has to offer. We are one of the most important global industrial centres and we also need to make sure to keep up with technology and trends and maintain a standard that helps us compete with international industry leaders. We will offer full support and cooperation to make our state an ideal destination to make investments.

Ease of Doing Business (EODB) is an important factor in promoting the industrial sector. How do you assess the implementation of the EODB policy in the state?

We continue to work hard on building simpler Ease of Doing Business processes like Affidavit Based Clearance System and Central Inspection System which are sure will help investors. Enhanced Ease of Doing Business – are approvals relaxed with a 3-year moratorium. Through Affidavit Based Clearance (ABC) System, we have ensured that any approved project can start the next day without waiting for any downstream approvals. With this the amendment, investors are not required to obtain approvals/clearances from different government agencies, for 3 years or until commercial operations begin.

Meanwhile, we are planning to include ITeS and Logistics as part of Affidavit Based Clearance. Various initiatives in easing out the “Doing Business” in the State have been introduced. Through e-Udyami, the Single Window Portal of Karnataka, the approvals/ clearances; including renewals, can be sought from various line departments.

Karnataka is one the leading hubs of the aerospace industry, which is on a constant path of growth. How do you propose to boost the growth in the sector?

With robust technology and innovation ecosystem in place, Karnataka continues to be a leader in the establishment of knowledge-based industries such as information technology, biotechnology, engineering, etc. The State is recognized as the fountainhead of global research and development with over 400 multi-national companies having their global research and development Centres in Bengaluru including GE, GM, Intel, Texas Instruments, Motorola, SAP, Oracle, IBM, etc. perhaps the largest concentration of such centers anywhere in the world. United Nations has ranked Bengaluru as the fourth largest technology cluster in the world after Silicon Valley, Boston, and London.

Specifically for the Aerospace and Defense sector, Karnataka is the first state in India to announce an aerospace policy in the country. Karnataka has also been recognized as the equipment design and manufacturing hub in India. The state has approved 33 project proposals with a proposed investment of Rs. 14,720 crores with an employment potential for about 10,584 persons. The policy also aims to enhance the contribution of the Aerospace sector towards increasing the share of industry in the State’s GDP from 30% to 32%.

Karnataka is planning to release the updated Aerospace and Defence Policy 2021-26 to attract INR 45,000 Cr investment and generate additional employment of 60,000 persons.

IT industry in Karnataka is another major area that brings in investment. Could you explain the plans made by the Government to make conditions more favorable for IT companies, including start-ups, to function in the State?

Silicon City remains at the forefront of tech-driven innovation, with the city possessing all the ingredients in terms of manpower, infrastructure, and know-how to keep this a vibrant destination for the start-up ecosystem today.

Our industrial policy has recognized key thrust areas that would help us create a next-generation technology hub Industry 4.0, Research & Development, Intellectual Property Rights (IPR), Technology Adoption & Innovation, Cluster Development Initiatives, and Sustainable Industrialization. The government has taken many initiatives to enhance its stature as one of the leading high-tech industrialized States in the country and is at the forefront of attracting investments from across the country and abroad in disruptive technologies viz. Artificial Intelligence, Automation, Data Analytics, Machine Learning, 3D Printing, and Robotics, etc.

For a city to produce successful entrepreneurs, it needs to provide the right policy support and allied infrastructure that can nurture innovation. With the creation of the Start-up Vision Group-Karnataka under the Start-up Karnataka program, we have aimed to bring together the brightest minds in the ecosystem to help set up a robust framework for policy generation that can be both flexible in its reaction to disruptive technologies but at the same time fair to all stakeholders that are involved.

Which are the key industrial sectors targeted by the government to promote growth. How do you forecast growth in each one of them?

Karnataka has a vibrant industrial ecosystem, and we have the right ingredients to be a global leader in various sectors. We are one of the most important global industrial centres and we also need to make sure to keep up with technology and trends and maintain a standard that helps us compete with international industry leaders.

We have released Industrial Policy 2020-25 in Aug-2020, to focus on the development of key sectors such as Automobiles & Auto components, Pharmaceutical & Medical Devices, Engineering, and Machine Tools,

Knowledge-based industries, Logistics, Renewable Energy, Aerospace & Defence, and Electric Vehicles, Industry 4.0, advanced manufacturing, R&D - aimed at becoming an integral part of the global value chain.

The policy and the programs and schemes are directed towards building all sectors, throughout the state. I strongly believe that our aim has to be to build a holistic, sustainable, and futuristic Karnataka by utilizing the immense opportunity and innovation the state has to offer. Statewide development can happen only when the development of all sectors takes place.

What are the steps being taken for skill development, generation of new jobs, and making the students employment-ready?

The Large and Medium Industries Ministry aims to utilize the existing talent base, create additional employment opportunities, and empower the secondary and tertiary sectors. The recent initiatives like ‘Udyami Aagu, Udyoga Needu’ (‘Be an Entrepreneur, Become an Employer’) in October were a huge success. The event aimed at attracting professional youth and students to entrepreneurship and employment generation where around 10,000 people attended the event. The idea is to make them job-providers instead of jobseekers. After Bengaluru, the program was a huge success in Kalaburagi and will be organized at Belgaum, Mangalore, Mysore, and Tumkur.

What are the government’s plans to support investments in Tier-2 cities? Could you talk about the ongoing projects and future plans?

The global investors’ meet in Bengaluru, scheduled in November, is expected to attract over ₹10 lakh crore in investments and create over 10 lakh jobs. The government is committed to creating a pro-business atmosphere in Karnataka. We will not concentrate only on Bengaluru but on the whole State. The State government will implement Prime Minister Narendra Modi’s idea of ‘one district – one product’ in the right spirit. This will help promote the growth of districts and create equal opportunities.