Kumaraswamy has also assured the investors that a Special Cell will be set up in the CM’s office to remove hurdles for investors, who wish to set up industries in tier-2 and tier-3 cities.

Look beyond Bengaluru Ktaka CM pitches tier-2 tier 3 cities to investors
news Politics Friday, August 03, 2018 - 14:31

Karnataka Chief Minister HD Kumaraswamy, on Monday requested investors to set up business in two-tier cities in the state.

The Chief Minister addressed the issue in a preliminary meeting with CEOs of IT-BT companies held ahead of the Bengaluru Tech Summit 2018.

Sources in the Chief Minister’s office said that Kumaraswamy had assured assistance from the government for companies willing to invest in tier-2 and tier-3 cities in the state to help generate employment.

“Skill development is being prioritised, and the state government is committed to extend all support to such investors. The Chief Minister requests investors to look beyond Bengaluru in order to generate employment,” the source added.

In Kumaraswamy’s maiden budget, Rs 500 crore was set aside for skill development. “CM Kumaraswamy listened to the concerns put forth by the companies and assured them that there will not be any hurdles in setting up new industries,” the source added.

Kumaraswamy has also assured the investors that a Special Cell will be set up in the Chief Minister’s office to remove hurdles for investors, who wish to set up industries in tier-2 and tier-3 cities.

The Chief Minister reportedly assured investors of the government’s plan to set up industrial clusters in various districts under the ‘Compete with China’ programme. Under this scheme agriculture equipment cluster will be set up in Bidar, production of Solar equipment in Kalaburgi, electronic toys unit in Koppala, textile production in Ballari and LED bulb manufacturing in Chitradurga

Kumaraswamy proposed to set up Karnataka Innovation Authority to turn the state into an innovation hub. The CM said that the proposal would be tabled in the winter session of the Assembly.

Major Industries, IT-BT, Science and Technology Minister KJ George, who was also a part of the meeting assured tech companies that the government would continue supporting the sector.

Social Welfare Minister Priyank Kharge announced the launch of a rural entrepreneurship and requested the CEOs of the IT-BT companies to invest.

Kumaraswamy’s appeal comes in the backdrop of the call for a separate North Karnataka state. The movement had initially gathered momentum after activists and political leaders had accused the government of doling out step-motherly treatment to the development of the northern districts.

After CM Kumaraswamy’s assurance to help generate employment and provide funds for development of the backward areas, the protests were called off.

However, despite multiple proposals to set up industrial clusters in tier-2 cities in the past, the region still remains backward.

In 2013, then Chief Minister Siddaramaiah had announced the setting up of industrial clusters in order to generate employment.

Siddaramaiah had envisaged a manufacturing policy to promote both large and medium scale industries in the state.

In Karnataka, the manufacturing sector contributes a little less than 25% of GDP and services sector contributes 59% of GDP. This remains unchanged as successive governments have failed to lure investors to set up manufacturing units in other districts as well.

Although the Siddaramaiah government had envisaged development of other cities, the focus was brought back to Bengaluru.

During the Siddaramaiah government, the state-level single-window committee had cleared 1,823 projects and claims to have generated 8,98,000 jobs.

The major investments during the last five years included Oracle India, TVS Motors, MRPL (Ethanol Plant), Ikea, SAP Labs, Wipro Aerospace, Molex India, HNI Autotech, and ACE Bright Pharma. The state government also claims to have generated 1.2 million jobs in the micro, small and medium enterprises (MSME) sector and 188,000 jobs in the large industries sector.

However, these investments were heavily focused in the southern districts. Although many Chief Ministers in the past have promised to develop North Karnataka, it remains to be seen whether CM Kumaraswamy will shift the focus to the north.