Karnataka had been on top of the list for the last three years
After three years at the top of the list of States attracting potential investment, Karnataka has seen a drastic dip this year, garnering just ₹5,023 crore of investment promised till March-end.
Karnataka’s promised investments this year, calculated through the 62 Industrial Entrepreneurs Memorandum (IEM) signed till end of March, is barely one-fourth of what Gujarat has received in the same period, shows investment intention data from the Centre’s Department of Industrial Policy and Promotion.
In comparison, in the first three months of 2018, Karnataka had received investment proposals of ₹74,776 crore — or, more than all other States combined.
This year, Karnataka ranks fourth in the list of IEMs received so far. While Gujarat tops the list with ₹22,348 crore, Maharashtra has received ₹12,257 crore and Rajasthan at ₹5,892 crore.
The figures come as a setback for the State which saw IEMs of more than ₹1.52 lakh crore being signed in 2016 and 2017, while there were investments of over ₹90,583 crore in 2018.
FDI inflows follow the same pattern. The inflows to Reserve Bank of India’s Bengaluru regional office for 2018-19 was ₹46,963 crore, down from ₹55,334 crore in 2017-18. The State maintains its third position, following Maharashtra and the National Capital Region.
Need for analysis
Gaurav Gupta, Principal Secretary, Commerce and Industries, said the department would have to analyse the reported numbers to ascertain a reason for the decline.
“There could be a case of misreporting by other States, or projects not being reported by Karnataka. While new capacity additions and big-ticket investments have been slow, these are linked to global factors and not to Karnataka’s government,” he said.
Ease of doing business
He claimed that while interest shown in investing in Karnataka has not declined, the State government was looking at greater ease of doing business.
“In our discussions, companies have cited comparisons with rules and laws in other States. We are studying these differences and working with various departments on addressing these issues,” said Mr. Gupta.
The Global Investors’ Summit, scheduled for early 2020, and progress in talks with a “number” of large firms is likely to see investments go up in the coming years, he said.
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