Karnataka_-_Diplo_July

O
n 24 June 2011, the ninety fourth
AGM (Annual General Meeting)
of the Federation of Karnataka
Chambers of Commerce & Industry (FKCCI)
was held in Bangalore. The chamber has a
vision to strive for the overall sustainable
socio-economic development of India with
specific focus on Karnataka.
The genesis of Karnataka Chambers
of Commerce can be traced back to the
early twentieth century, when the (then)
princely state of Mysore was endowed
with a progressive ruler, and bevy of
economic visionaries, who together
were determined to create conducive
environment for economic growth and
development of the state.
Sir M. Visvesvaraya was the architect
of Mysore Chamber of Commerce, the
precursor of the Federation of Karnataka
Chambers of Commerce & Industry,
which was established on 08 May 1916
in Bangalore. Sir M. Visvesvaraya was
educated in Civil Engineering and served the
(then) Bombay Province. His contributions
to the State of Mysore were immense. In
the year 1911, on the advice of Sir M.
Visvesvaraya, the State’s Economic Council
was constituted to advise the ruler on
the steps to be taken for the economic
development of the State, which was first
in British ruled India.
On the advice of the Economic Council,
industrialization in the State was taken
up as an alternative to agriculture. To
facilitate easy credit to the industries,
Sir M. Visvesvaraya established a banking
institution – now the State Bank of Mysore
– in the year 1913. Consequent on the
development of Trade and Industry, to
provide the services to the Trade and
Industry, he founded the Chamber of
Commerce, named as Mysore Chamber
of Commerce.
The Mysore Chamber of Commerce
had a membership of 151 in 1917, and
was headed by the cream of trade and
industry. The Chamber’s first President
was Mr. W.C. Rose, who was also M.D.
of Mysore Bank. Today, FKCCI has direct
membership of over 2500, drawn from all
sectors of trade, commerce and industry
spread all over the State, including
Associations and District Chambers of
Commerce and Industry numbering 140;
thereby reaching more than one lakh
members indirectly.
The institution is managed by Managing
Committee consisting of the President, Sr.
Vice-President, Vice-President, Immediate
Past President and 48 Elected Members.
Past Presidents are ex-officio members.
It is supported by the Secretariat headed
by Secretary General, who looks after
the implementation of the policies and
day-to-day administration. To make the
Chamber more vibrant, Sub-Committees
have been constituted in different
areas covering Commerce, Trade and
Industry, Infrastructure and other related
sectors, which are of importance for the
development of trade and industry. The
Sub-Committees functions under the
guidance of Chairman, and deliberates
on the issues related to the sector and
comes out with solutions to be taken with
respective authorities for implementation.
Government, recognizing FKCCI’s role in
building the economy, has nominated it as
a Member in many committees. Currently
FKCCI is represented in 36 Committees of
both the State and Central Governments.
The Federation of Karnataka Chambers
of Commerce & Industry has the vision to
‘Strive for Overall Sustainable Socio-
Economic Development of India’ with
special focus on Karnataka.
FKCCI: Creating Prosperity with Sustainability
INDIAN STATES ON A PLATTER
THE EXTRAORDINARY AND PLENIPOTENTIARY DIPLOMATIST-PLUS • JULY 201136

F
or the avid traveller, there is nothing
better than a whirlwind tour of
the state of Karnataka to fulfil his
wanderlust. It is a state that is truly
blessed – where ancient fortress and
ageless monuments meet pulsating
modernity and unbridled urbanisation. It is
where verdant greenery and breathtaking
wildlife make way for the roar and tumult
of concrete jungles. It is only in Karnataka
that the gush of waterfalls and romance
of idyllic hill stations coexist with the
sheer magnetism of adventure sports and
the dynamism of arts and culture. It is
truly an awe-inspiring experience that
gives one the inimitable ability to travel
with effortless ease from the hallowed
precincts of a timeless temple to the
swanky environs of the IT Park.
The Genesis of the Modern State
India’s eighth largest state in terms of
geographical area has always been a leader
in the field of industrialisation. Karnataka
took its first cautious steps towards
growth and development under the reign
of the Wodeyars, the rulers of Mysore.
The presence of able administrators,
like Rangacharlu, Sheshadri Iyer, Sir M.
Visvesvaraya and Sir Mirza Ismail, often
hailed as pioneers, helped usher an era
of development as the state progressed
in its trajectory. It was Sheshadri Iyer
who led the construction of Asia’s first
hydro-electric works in Shivanasamudra.
The legendary Sir M Visvesvaraya, who
coined the phrase ‘Industrialise or perish’
was regarded as the father of planning
not only in Mysore, but also in India. In
his quest for progress and prosperity, he
spearheaded many projects that helped
trace the contours of an industrialised
state, which included the establishment
of the Mysore Economic Conference,
the Mysore Bank, Mysore University,
Mysore Economic Journal, the Chamber
of Commerce, Chamarajendra Technical
Institute, the Mechanical Engineering
School, Modern Hindu Hotel, Mysore-
Arasikere railway line, Chickabalapur
rail link, Sandal Oil factory, Silk factory,
Agricultural school, Kannada Sahitya
Parishad and Century Club. He is also
credited with the construction of the
Krishnaraja Sagar Dam and Bhadravati
Iron Ore Factory. It was Sir Visvesvaraya’s
tremendous thought, singular foresight
and astute planning that helped the state
of Karnataka mature from an agricultural
economy to a crucible of modern political
thought and action and steady economic
growth and development. He was awarded
the Bharat Ratna in 1955 in recognition
of his inestimable contribution to the
country.
Successive state governments built
up on this strong foundation created by
Sir Visvesvaraya. The implementation
of a pro-public sector policy witnessed
the industrial revolution traverse the
geography of the state. Many high-profile
public sector enterprises like, BEML,
BHEL, HAL, Wheel & Axle plant, BEL and
ITI, made Bangalore their home.
At the Forefront of Industrial
Growth
Karnataka’s industrial growth has been
spurred by several inherent advantages.
These include a massive resource
base in terms of natural resources,
and a highly educated, skilled and
cost effective labour force, which also
includes a technical manpower trained
in Engineering, Management and Basic
Sciences at universities, general and
specialised colleges, polytechnics and
technical training institutes and premier
institutes of higher learning; access to
world-class Research and Development
Karnataka
Where Diversity Rules
By Yamini Chowdhury
THE EXTRAORDINARY AND PLENIPOTENTIARY DIPLOMATIST-PLUS • JULY 2011 37

facilities, originating from the presence
of several central government laboratories
and research institutions; an extensive
network of rivers that facilitates
irrigation and power generation for
sustaining agriculture; a 320 km long
coastline that promotes the growth of
the marine industry; robust infrastructure
and excellent communication facilities
characterised by rail, road and port
accessibility.
It is a combination of these strong
fundamentalsthathaspropelledthegrowth
of both the primary and secondary sectors
in the state. While the primary sector
has grown at an average of 3.6 percent
in the past eight years, the secondary
sector has witnessed exponential growth
of 11 percent during the same period. In a
mineral rich state that boasts of a wealth
of resources ranging from iron-ore and
granite to limestone and gold, the mining
sector has ratcheted up an impressive
annual average growth rate of 14 percent,
while construction activity has increased
by 13 percent.
According to a McKinsey Survey Report
conducted on behalf of the Confederation
of Indian Industry in 2011, the rate
of growth of the state’s GDP between
2005 and 2010 was 8.7 percent, which
was the same as the national average.
Karnataka enjoys the position of the fifth
most urbanised state in India, where 34
percent of the population resides in urban
areas. According to Karnataka Markets
and Industry 2010, by the year 2015, the
annual income of an average citizen in the
state is expected to be Rs 33,390.
India’s Knowledge and
Technical Capital
Though the industrial growth of the
state has been a puissant tale, it is the
rising global clout of Karnataka in the
field of Information Technology that has
received widespread acknowledgement
and appreciation. In a matter of just
10 years, the state has emerged as the
knowledge and technical capital of
the country. This dramatic growth has
provided the much-desired impetus to
the services sector in the state, which has
witnessed a 9 percent growth rate in the
past eight years. While financial services
have increased by 14 percent annually,
the transport and communication sector
rose at 13 percent per annum, trade,
hotels and restaurants have developed
at 9.8 percent and the real estate sector
witnessed growth in the range of 8-9
percent. Today, Karnataka, owing to the
presence of IT majors like Infosys, Wipro
and TCS, has emerged as the leading
software exporter of the country, with
an impressive export figure of Rs 70,375
Karnataka’s industrial
growth has been spurred
by several inherent
advantages. These include
a massive resource
base in terms of natural
resources, and a highly
educated, skilled and cost
effective labour force,
which also includes a
technical manpower
trained in Engineering

crore in the financial year 2009-10, which
accounted for 40 percent of the country’s
total exports. Buoyed by a growth rate of
28 percent, the state is all set to develop
into the country’s global services centre
by the year 2020.
The Country’s Premier
Investment Destination
The fact that the state attracted
foreign direct investment (FDI) amounting
to Rs 9143 crore during 2008-09 and
further attracted RS 4852 crore during
2009-10 proves that Karnataka, impelled
by far-reaching and comprehensive
economic policies and a competitive
edge in attracting foreign and private
investments, is one of the most sought-
after destinations for FDI, particularly
in sunrise sectors like Information
and Communication Technology (ICT)
and Bio-technology. According to the
Economic Survey of Karnataka 2010-11,
“Availability of skilled manpower, best
corporate management and practices
for global competitiveness, dynamism
in the development and application of
modern engineering technologies, and
good governance measures have been
the driving factors for enormous growth
of high-tech industries and inflow of
domestic and foreign investment in the
State. These were seen especially in
the information technology, electronics
and communications, machine tools,
engineering, automobiles, auto-
components, food processing, agriculture,
readymade garments, pharmaceuticals,
and aero-space.”
Unearthing the Tourism
Potential
Given Karnataka’s incontestably
significant historical and cultural legacy,
it is no surprise that the tourism industry
has grown by leaps and bounds. The
comprehensive tourism policy of the
state, comprising incentives, concessions
and subsidies for the development of
tourist infrastructure through private
investment, resulted in a 16 percent
increase in tourists flow between 2005
and 2009. In addition to the increase in
the number of visitors, the integrated
development of the tourism sector is
expected to bring in Rs 25,000 crores of
private investment and generate 41 lakh
employment opportunities within the
state in the next five years.
Ageless heritage sites, overwhelming
landscapes, amazing flora and fauna, a
cosmic coastline, immaculate beaches,
a rich and vibrant cultural heritage and
a technological harbinger – is there any
other state in the country that celebrates
diversity the way Karnataka does? It is only
here that diversity rules within the unity
and harmony of its people.
Bangalore - The Capital in all
Respects
At the heart of this meteoric rise
of the state as a knowledge hub, is
the phenomenal growth of its capital,
Bangalore. From a pensioner’s paradise
to the commanding heights of one of the
top four technological clusters in the
world, Bangalore has indeed come a long
way. Apart from earning the sobriquet of
Silicon Valley of India and IT Hub of Asia,
Bangalore is also regarded as the Biotech
capital of the country, considering its
ability to attract the maximum amount of
venture capital funding for biotechnology.
The city is also proud to be home to
the largest biotechnology cluster in
the country. A vibrant metropolis and a
hub for IT-BT companies, Bangalore has
refashioned itself as a global city of the
21st century that has lent untarnishable
brand equity to its name.
A vibrant metropolis and a
hub for IT-BT companies,
Bangalore has refashioned
itself as a global city of the
21st century that has lent
untarnishable brand equity
to its name

KARNATAKA
The Making of Every Investors
Dream Destination
“Karnataka’s capital Bangalore is a brand the world identifies India with. It is also the single biggest
reason why India has become such a hot investment destination.”
- Dr. Manmohan Singh
T
he Honourable Prime Minister of India
heads the list of supporters that have
openly acknowledged Karnataka as
the ‘state of action’. The state’s de
jure recognition as the ‘Knowledge Hub
of Asia’ would seem formulaic, almost
unencumbered, to many, considering
the abundance of natural resources and
a wealth of talent melded perfectly
with unflagging entrepreneurial zeal in
innovation and research and proactive
Government policies. There is wide spread
appreciation of the fact that Karnataka’s
stellar rise as the second most favoured
investment destination in India, after
Gujarat, has been scripted predominately
by the phenomenal growth of knowledge-
based sectors, namely Information
Technology and Bio Technology. However,
the support provided by emerging sectors,
like tourism and food technology, has
propelled the holistic growth of state
economy and its phenomenal rise to great
heights in the global calculus.
Even though the state has witnessed
rapid, inimitable growth across variegated
knowledge based sectors, each district of
the state is characterised by a unique and
vibrant set of investment opportunities,
an attribute that has impelled over 700
MNC’s to converge on the state. The
unique set of strengths and opportunities
offered by Karnataka can be gauged from
the fact that one new global company
makes Karnataka its base in India and
a new industrial unit is approved every
week.
Priya Bhattacharjee, SeniorAssistant
Director FICCI Karnataka State Council,
lists out the several reasons that have
enabled Karnataka to emerge as the
fastest growing state in the country.
Karnataka’s phenomenal
growth is exemplified by a
series of facts and figures.
The state contributes 8
percent to India’s industrial
income and 9.8 percent to
India’s product exports.
More than a third of the
country’s software exports
emanate from the state
By Yamini Chowdhury

“Strong economic growth, progressive
policies, rich natural resources, leadership
in coffee, raw silk, sandalwood, and
floriculture production, reputation as
a progressive state, strong position in
new high-technology industries such as
information technology and biotechnology,
availability of trained manpower, wide
network of educational institutions,
generally peaceful environment and
communal amity, are some of factors that
have accelerated the growth rate”.
She further states, “Karnataka’s
undisputed leadership in knowledge-
intensive industries since independence,
first in manufacturing, and now in services,
has enabled it to emerge as a leader in new,
promising knowledge-intensive industries,
while at the same time, consolidating the
state’s position in existing industries”.
“The aspiration of the state to be a
global education and research hub with
one of the strongest bases of education
and research institutions in the country,
has accelerated the rate of growth”, Ms
Bhattacharjee concludes.
The IT Revolution and Beyond
The role played by IT in bringing about
balanced growth has been invaluable.
The software industry in Karnataka,
recognised as one of the top 5 technology
clusters of the world, has become one of
the main pillars of the Indian economy.
Karnataka stands first among all the states
of India in terms of revenue generated
from software exports, which exceeded
$15.6 billion in the year 2009-2010.
With the IT department planning an IT
investment region, valued at $20 billion,
on 10,000 acres of land near the Bangalore
International Airport, this revolution is
only expected to get bigger and better.
V. Venugopal, Managing Director,
Karnataka Udyog Mitra, the single contact
point for all investors in the state,
firmly believes, “The country’s global
capabilities in Information Technology had
their first beginnings in Karnataka, which
today accounts for more than 40 percent
of the total software services exports
from India―earning it the sobriquet of
the ‘Silicon Valley of India’. The state of
Karnataka, recognized as amongst the
fastest growing states within the Indian
federal structure, has also pioneered the
bio technological revolution, with more
than 50 percent of biotech companies in
Karnataka.” He further adds, “We have
been successful in attracting very huge
investments in iron & steel and cement
sector.”
It is an opinion that is also endorsed
by industry leaders like Aravind Melligeri,
CEO and Founder of QuEST Global, the
force behind India’s first aerospace
precision engineering and manufacturing
SEZ, who avers, “In addition to the
continued support to the IT and ITES
industry through better infrastructure
and convincing them to move to tier-2
and tier-3 cities, high value added
manufacturing, such as automotive and
aerospace, and the generation of more
value added products from iron ore and
steel have ensured strong and sustainable
growth for the state.”
There is definitely more to the
Karnataka growth story than just the
emancipatory IT revolution. Apart from
fostering the globally-recognised Silicon
Valley of India in Bangalore, the state has
also provided the perfect environment for
the growth and development of industries
like aerospace, biotechnology, heavy
construction machinery and equipment,
sericulture and floriculture, all of which
have provided the propulsive momentum
to fuel the high rate of growth in India’s
eight largest state.
Priya Bhattacharya believes, “The
state has a strong industrial base with
large public sector undertakings as well
as large and medium private enterprises
along with small-scale units. The state
has proven its strength in wide spectrum
of sectors from hi-tech industries to
village and cottage industries. Some
of the cottage industries like textile
(handloom, garments), sericulture,
handicrafts, and incense stick (agarbatti)
industry have done well in terms of their
export potential and share in the domestic
market.”
From the research and education
perspective too, Karnataka takes top
honours. Dr. P. Anandan, Distinguished
Scientist and Managing Director, Microsoft
Research India opines, “Karnataka has a
long tradition of research and advanced
studies- this is borne out by the number
of research labs both in the government
and private sector, as well as institutions
of advanced studies such as IISc, IIIT
Bangalore and the National Institute for
Advanced Studies. There are also a number
of leading educational institutions in areas
The software industry in Karnataka, recognised as
one of the top 5 technology clusters of the world, has
become one of the main pillars of the Indian economy.
Karnataka stands first among all the states of India
in terms of revenue generated from software exports,
which exceeded $15.6 billion in the year 2009-2010

such as engineering, law and management
studies. All these have contributed to
Karnataka being seen as one of the leading
states in India for quality education and
research, which certainly has a positive
effect on the economic growth and
development of the state.”
Factual Assessment of India’s
Fastest Growing State
Karnataka’s phenomenal growth
is exemplified by a series of facts and
figures. The state contributes 8 percent to
India’s industrial income and 9.8 percent
to India’s product exports. More than a
third of the country’s software exports
emanate from the state. The state boasts
of the second-largest iron ore reserves, is
also the third largest steel producer and
the only primary gold producing source
in India.
Karnataka’s robust economic
performance is often attributed to
the state’s strong industrial base and
vibrant service sector. The might of
the economically ascendant state can
be determined by its contribution of 5
percent to the national income. Further,
the impressive growth has ensured the rise
of the per capita income to levels higher
than the national average.
The services sector, buoyed by the rapid
strides made by the software industry, has
emerged as the engine fuelling the growth
of the state. In addition to being the first
state to establish a full-fledged IT Park
in 1991, Karnataka leads the way in bio
technology and nanotechnology, and has
the unique distinction of being the first
state to privatise higher education in
India. Its emergence as a hub for medical
tourism is inevitable, considering it is
home to the highest number of medical
colleges in the country.
In terms of agricultural activity,
the state pitches in with a notable
performance. The state, which is one
of the largest producers of fruits and
vegetables in the country, takes pride in
its second position in floriculture and milk
production. It has the largest area under
horticulture, which has enabled Karnataka
to rise to the third position in terms of
production. 70 percent of India’s coffee
is produced in the state. It also leads the
way in sericulture in the country.
Its well-diversified manufacturing
sector is composed of engineering,
chemicals, electrical, automobile, textile,
aeronautics and food processing industries
that have boosted industrial growth from
6.2 percent per annum in the 90’s to a
healthy 8.9 percent every year in this
millennium.
New Sunrise Sectors on the
Horizon
Even though the IT and ITES sectors,
in tandem with bio technology, have
propelled the state historically, there are
several sectors that holds tremendous
promise. V. Venugopal believes, “There
are many other sectors like aerospace,
automobiles and medical tourism whose
potential is yet untapped.”
According to Aravind Melligeri,
“Manufacturing, especially in aerospace,
is yet to reach the potential. Karnataka
has decades of aerospace investment by
the Central Government through DRDO
labs and HAL, but it has been focused on
selling to armed forces. With India opening
up for imports in aerospace and defence,
the opportunity has unfolded to public
sector and private sectors to invest and
achieve exports, apart from supporting
requirements of the Armed Forces.”
“QuEST has been an early mover to
establish engineering services in the
aerospace sector and then, to invest to
setup SEZ focused to build an Aerospace
Manufacturing Ecosystem. Aerospace
industry cycles are long and investment

returns can be seen over decades.
Organizations who understand the sector
have committed significant capital and
I would expect Karnataka to receive a
$1billion investment by 2015 in aerospace
manufacturing,” observes Melligeri.
“Keeping in mind the complexities of
this particular industry, the government
has created an exclusive industrial area
“Availability of resources - both human and natural, availability of infrastructure
and the support of the Government are the key elements which drive growth. The
State Government has been giving emphasis for infrastructure development and
initiatives like creation of land bank have been taken up. It is our constant endeavor
to make our State investor friendly and the Government has been bringing many
enabling policies across various sectors of industry.”
V. Venugopal, Managing Director, Karnataka Udyog Mitra
“Karnataka is today among the country’s most successful tourism destination.
With a viable tourism product in almost every sphere one can think of, tourism is
certain to spur the state’s success in the years to come. We have some of the best
tourist attractions India has to offer.”
Vishwanath Reddy, Director Karnataka Tourism
“If provided with the right level of focused investment and support, Karnataka
has the unique opportunity in the country to create immense value to the businesses
and state. Organizations that understand the aerospace sector have committed
significant capital and I would expect Karnataka to receive $1billion investment by
2015 in Aerospace manufacturing.”
Aravind Melligeri, Chairman and Co-Founder, QuEST Global
“Karnataka takes pride in having a strong and expanding infrastructure base,
which is further augmented by strong focus of policy makers to promote development
of supporting agri-infrastructure especially through initiatives such as crop cluster
development, food parks, agri-economic zones and agri-SEZs among other.”
Priya Bhattacharjee, Senior Assistant Director, FICCI Karnataka State
Council
“The state is blessed with abundance of natural beauty and this, needs to be
conserved. It is a factor that pulls a lot of tourists into the state into areas like Coorg
and the wildlife areas.
Loveleen Arun, Vice President, Karnataka Tourism Forum
“The presence of research labs both in the government and private sector, as
well as institutions of advanced studies such as IISc, IIIT Bangalore and the National
Institute for Advanced Studies and number of leading educational institutions in areas
such as engineering, law and management studies, have contributed to Karnataka
being seen as one of the leading states in India for quality education and research,
which certainly has a positive effect on the economic growth and development of
the state.”
Dr. P. Anandan, Managing Director, Microsoft Research India
EXPERT SPEAK
for aerospace industries near Bangalore
International Airport, which would
facilitate companies to set up MRO
facilities,” asserts Venugopal.
A FICCI-Yes Bank study indicates that
Karnataka offers immense investment
potential for private players to exploit
its food processing sector. FICCI’s
Assistant Director, Priya Bhattacharjee
explains, “Extremely positive demand
trends combined with strong production
strengths, excellent infrastructure and
favourable policy environment have
resulted in remarkable acceleration of
investor interest to tap the potential
that Karnataka offers to stakeholders in
the food processing industry. An analysis
of the strengths and weaknesses of the
processed food value chain in the state
brings out two clear investment spaces.
The first is the opportunity to tap the
strong supply strengths that Karnataka
offers, particularly in fruits, vegetables,
spices, plantation crops and certain
cereals. Second is to capture opportunities
that emerge due to inefficiencies and
infrastructure gaps in upstream activities
of the value chain.” She further asserts,
“Karnataka boasts of specific supply
strengths giving the state a comparative
advantage to become the food processing
hub of the country. With as many as ten
agro climatic zones and land topography
highly suitable for agriculture, Karnataka
is one of the most agriculturally diverse
states in India. It is estimated that about
83 per cent of the geographic area of
the state is suitable for agriculture.
Consequently, Karnataka is the largest
producer of ragi, sunflower, tomato,
coffee and arecanut; second largest
producer of maize, safflower, grapes,
pomegranate and onion and the third
largest producer of spices in the country.
In addition, the state has a wealth of
livestock population and marine resources
that auger well for processing of dairy,
meat, fish and shrimp.”
Vishwanath Reddy, Director Karnataka
Tourism maintains, “Tourism is the one
where the true potential has not been
realised still. We have some of the best
tourist attractions India has to offer, be it
heritage, culture, folklore and festivals,
beaches, waterfalls and wildlife. There
is a tremendous gap in terms of demand
and supply as the state grows in stature
and there is increase in awareness
levels. Tourism has immense potential in
contributing to the economy – in terms
of employment, revenues from tourist
arrivals, economic benefits to local
communities and capital investment – that
propel overall economic development.
Though things are gradually improving,
it will take much more time before the
sector reaches its potential. The impact
is so strong that it has the potential to
become the state’s largest economic
activity”
He also believes, “For the industry
to take off in the coastal regions, it is
important for good infrastructure for
tourists come up. CEZz might just help

the industry by ensuring controlled
development and also alleviate the
teething issues associated with CRZs”.
Loveleen Arun, Vice-President,
Karnataka Tourism Forum concurs, “The
State government has already taken a
pro-active stance to improve tourism in
the state. Apart from substantially raising
the budget for the sector, it has worked
along with trade to market the state in
various national and international forums
and trade fairs. Its marketing promotional
material has been winning awards for the
last 3 years”.
“However, asserts Arun, “there
is still substantial work to be done
internally which will deliver the promise
given to the tourists. The Tourism
Department needs to focus on fostering
good infrastructure in the state through
strategic private partnerships, ensuring
last mile connectivity to the interiors as
well as good air connectivity to spots like
Hampi. There is a dire need for trained
tourism personnel and the department
must focus on this. The state is blessed
with abundance of natural beauty which
needs to be conserved. It is a factor that
pulls a lot of tourists into areas like Coorg
and the wildlife areas. There should be
proper guidelines for resorts and tourism
activities that are coming up in these
areas.”
Investor-Friendly Government
Policy 2009-2014
The Industrial Policy 2009-2014, hailed
as progressive and pragmatic, has managed
to win the plaudits of the corporate world.
V Venugopal, Managing Director, KUM
reiterates, “I feel availability of human
and natural resources, availability of
infrastructure and the support of the
Government are key elements which drive
growth. The state Government, in the
new Industrial Policy, has emphasized on
infrastructure development, and hence,
initiatives like creation of the land bank,
by the acquisition of more than 3,000
acres in each district by the Karnataka
Industries Areas Development Board
(KIADB) for the purpose of industrial
development, have received approval.
The Suvarna Karnataka Development
Corridor programme aims to connect most
of the Tier II cities through a network of
highways, with cluster development in
designated zones. The programme also
envisages the development of industrial
clusters, townships, satellite towns and
sector-specific industrial zones in an area
of 25 km on both sides of the corridor.”
“The policy also aims at reducing
regional imbalances and acknowledges the
immense contribution of the employment
intensive MSME sector. It offers more
incentives to industries set up in backward
regions. Some of the incentives offered
to the MSME sector include investment
promotion subsidy, exemption from stamp
duty, concessional registration charges,
waiver of conversion fine, exemption
from entry tax, etc. Many mega projects
are coming up in backward regions due to
the availability of resources locally. These
industries are triggering the establishment
of large number of downstream industries,
thus accelerating growth in backward
regions. It is our constant endeavour
to make our state investor friendly and
the Government has introduced many
enabling policies across various sectors of
industry,” concludes Venugopal.
Articulates Priya Bhattacharjee,
“The Karnataka State Government
has taken up numerous initiatives to
support and promote development of
the food processing industry. While the
Industrial Policy (2009-2014) of the state
is also strongly focused on providing
numerous fiscal incentives so as to
attract investment in the manufacturing
the food processing industry. Some key
interventions taken up by the Ministry of
Food Processing Industry include schemes
for infrastructure development, technology
upgradation and modernization, backward
and forward integration and schemes for
quality assurance and quality control.”
There is no ambiguity about the
fact that Karnataka enjoys a positive
perception as an investment destination in
the minds of investors and entrepreneurs.
But, as Priya Bhattacharjee points out,
there are several areas that demand the
immediate attention of the government
when it comes to supporting growth of
industry in a sustained manner. “The
first,” she asserts, “relates to issues that
have emerged given the pace of growth
of industry in the state in the last few
years. These along with certain important
factors like quality infrastructure, regular
availability of power, availability of
skilled manpower etc. are areas that
the Government will have to look into
if it wants the industry in Karnataka to
flourish and compete with the best in the
world.” “The second set of issues relates
sector, the Industrial Promotion Policy for
Agro-Food Processing Industries (2003)
focuses specifically on the development
of the food processing industry. Besides
the numerous fiscal incentives that the
policy provides for, some of the key
action steps include development of
food and spice parks, establishment
of agri-export zones, development of
human resource and market development
activities. The state Government has
also identified grape processing as a
focus area and has formulated the
Karnataka Grape Processing and Wine
Policy (2007), which declares wineries
as a Horticulture and Food Processing
Industry and provides numerous subsidies
and incentives to promote setting up of
wineries in the state. In addition to the
efforts put in by the state Government,
the central Government has also been
strongly promoting the development of
to policy interventions that are needed to
broad base industrial growth in the state
and particularly strengthen industrial
activities being carried out in the northern
districts,” she maintains
“Above all, there is a strong desire
among people of the state to live in
their natural traditional locations
and communities and have economic
opportunities closer to home. This
means that the state needs to have
good infrastructure so that economic
activities are better distributed across
the state. Power, roads (and other forms
of transportation), water and sewerage
need to be available at a reasonable
level across the state,” concludes, Priya
Bhattacharjee.
Only then will the state of Karnataka
gain its rightful place as a dream
destination in the hearts and minds of its
own people.

Karnataka_-_Diplo_July

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