Karnataka IT and BT Minister Priyank Kharge’s recent remarks that the economy in coastal districts like Dakshina Kannada and Udupi had been hurt by communal violence have drawn criticism from industrialists, social media users and the opposition Bharatiya Janata Party (BJP). Local industry and IT bodies even pointed to local and foreign IT investments as proof of development.
Priyank Kharge had said on February 15 that communal violence had hurt the economy of the coastal districts, which otherwise had “great potential.” He said IT firms had responded positively towards investing in the region, but many investors were worried about the safety of their employees. He was referring to recurring incidents of communal tension and violence seen in the region, which he said were discouraging investments.
Priyank’s remarks came during the release of a book, Karavaliya Raktha Kanneeru, by journalist Mohammed Irshad, in Bengaluru. The book chronicles the pain of families who have lost family members to communal violence.
Many people began to criticise Priyank on social media, but things took a turn when IT industry veteran and Chairman of Manipal Global Education Services, TV Mohandas Pai, called Priyank’s remarks a “fake narrative.”
In response, Priyank posted an image of Kanara Chamber of Commerce and Industry (KCCI) meeting agenda bearing the KCCI logo, asking, “If this is a fake narrative, why are the local industry captains of Kanara Chamber of Commerce and Industry discussing this issue in their meetings?”
The partial image posted by the minister listed the agenda of the meeting on June 5, 2025, as “a meeting was held at Hotel Vivanta to deliberate on the impact of the recent communal incident in Dakshina Kannada on trade, commerce and other related aspects.”
The KCCI issued a press release the following day, February 17, saying that it was merely invited to attend the meeting called by the state government. KCCI said it was given a 15-minute slot to speak at the meeting, which was also attended by elected and nominated representatives, “in light of certain incidents that occurred in our region during that time.”
“The deliberations were primarily centred around the need to consider relaxation of working hours for business establishments and to ensure the free movement of people within the district, particularly in the context of the imposition of prohibitory orders and the invocation of relevant provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS),” the press release said.
KCCI president PB Ahmed Mudassar told TNM that the meeting was attended by a few elected representatives from Bengaluru who “wanted to understand what roles different stakeholders had played.”
Ahmed said that KCCI requested relaxations due to prohibitory orders in place due to a “certain incident.”
Dakshina Kannada district was on a boil around April and May 2025. It started with the lynching of a Muslim man named Ashraf on April 27. This was followed by the murder of rowdy-sheeter Suhas Shetty on May 1 and retaliatory stabbings, ending with the murder of Abdul Rahiman on May 30.
“The administration responded immediately, and we actually welcomed the preventive measures since they were taken to ensure safety. Restrictions on business operations past midnight and on people’s mobility created some practical challenges, so we asked for relaxations to ensure businesses weren’t affected,” Ahmed said.
While maintaining that the Minister’s remarks may have been taken out of context, Ahmed said that it was not true that communal violence had affected business in the state. He said that the Union and state government had supported local businesses in the last six months.
“For example, (Dakshina Kannada) MP Captain Brijesh Chowta has launched initiatives such as Back to Uru, bringing in several investors. Beyond Bengaluru, Mangaluru is one of the cities that attracts substantial investments. Our coastal region has seen one of the highest growth trajectories, even in the IT sector,” Ahmed said.
The outrage
Many people took offence to Kharge’s remarks, pointing out on social media that the two districts had strong local businesses, entrepreneurs and industries, including IT companies such as Infosys and Cognizant, apart from smaller IT firms started and staffed by local people.
Some people recalled the region’s historical links to trade—Mangaluru was a port town on a historical trade route that connected with North Africa and West Asia. Others said the region was the home of five nationalised banks—Canara Bank, Corporation Bank (now merged with Union Bank of India), Vijaya Bank (absorbed by Bank of Baroda), Karnataka Bank, and Syndicate Bank, which was later merged with Canara Bank.
Others, like Mohandas Pai, said that over 30,000 students from other cities and states study in the region and that Dakshina Kannada had the second-highest Gross State Domestic Product (GSDP) and per capita income in the state after Bengaluru.
“Will so many parents send their children there if what you say is correct? It had 30000 people in IT with over 250 cos, many there for over 15 yeas. As our Minister we expect better than this. You are letting us down terribly kharge (sic),” Pai said on X.
Dakshina Kannada is indeed second to Bengaluru when it comes to GSDP. But, Priyank told TNM that quoting GSDP was misleading and the gap between Bengaluru and Dakshina Kannada was vast. According to the Economic Survey, among the districts, Bangalore Urban District Gross Domestic Product contributes 39.1% to the state GDP, followed by Dakshina Kannada at 5.4% during 2023-24.
The per capita income for Bangalore Urban district is the highest at Rs 7,38,910, while Dakshina Kannada is at Rs 5,56,059 and Udupi is at Rs 5,33,469.
BJP leaders have also slammed the Minister and pointed to the findings of the recently submitted report of the Karnataka Regional Imbalances Redressal Committee, which said that the most backward taluks were in Kalaburagi region. Priyank represents the Chittapur constituency in Kalaburagi district.
Dakshina Kannada district BJP president Satish Kumpala claimed that the highest number of daily wage migrant workers in the district were from Kalaburagi district.
He said that the coastal region was known for its entrepreneurship and education facilities accessed by students from across India and abroad. He claimed that residents of the region were among the highest taxpayers in the state.
“Kharge has been IT minister for two-and-a-half years. What is his contribution to this region? How many companies or how much capital has he brought to this region?” Satish told TNM.
Are investors wary of the communal climate?
A long-time member of the KCCI who spoke to TNM on condition of anonymity said that the communal problem is one that repeatedly confounds the chamber in talks with investors from outside the region, and it sometimes comes up in conversation between members.
He said that given Karnataka’s 360 km coastline – strips of land sandwiched between west-flowing rivers and the sea – tourism had huge potential, and the KCCI sub-committee on tourism had been pushing for investment in the sector.
“The first thing investors ask is ‘What is the communal atmosphere like?’. We can say everything is fine, but we will not be the only people that the investor will be speaking to. If we give them false information, they will judge us.”
He said that communal tension also came up in discussions with investors interested in the IT and hospitality industries. He could not recall specific instances but maintained that “the ratio of people who express interest and those who actually invest is telling.”
He said that local investors knew the lay of the land and how to handle it, but for outsiders, “the smallest communal spark is enough to send them packing.”
Although the violence has reduced in the last few years, the KCCI member said that “the fear of communal violence among outside investors has not reduced. If that fear goes, our young people will get jobs.”
If the KCCI, founded in 1940, represents an older and traditional group of the region’s business interests, Rohith Bhat represents a newer, modern one.
Rohith founded Robosoft Technologies, an IT company which tried and succeeded at making it “cool” to work in a small town in the 1990s. He sold Robosoft, which was based in Udupi, with a workforce of 1,000 people, to a Japanese company in 2021. Today, he is the lead industry anchor of the Mangaluru cluster of the state government’s Karnataka Digital Economy Mission (KDEM) and has worked closely with Priyank.
“I’ve met over 250 people from outside this region. Consuls General, senior officers of IT companies and even MNCs who are looking to expand outside Bengaluru. Not once has this question come up,” Rohit told TNM, but was also cautious. “Just because no one has asked me, it need not mean that it is not a concern.”
He said that as far as the IT industry is concerned, things have picked up pace in the last few years. “Before, there was no infrastructure here for IT companies, but now private players are building that.”
Rohith said that he himself had built a co-working space after attempts to get Bengaluru companies to set them up in the coastal region failed. He built ‘wrkwrk Mindspace’, a multi-storey coworking space on land that he owned close to Mangaluru airport.
“Within seven days, a Danish company took up the whole building and even requested an additional floor. They hadn’t even spent seven minutes in the building,” he said.
This has also led to others building a handful of similar managed office spaces in Mangaluru, which are likely to be ready in a year, Rohith said. “This momentum is there. In the last two years, 40 new companies, small and large, have come to this region. We must have 8,000 to 10,000 IT employees coming to the region—people who graduated from colleges here and senior-level employees from outside.”
Towards the end of the call, Rohith wondered why Priyank had made such a statement. “I’m a big fan of the Minister. I don’t know why he said that, and in what context.”
On February 18, Mangaluru chapters of entrepreneurs, industry and civic bodies, including the Confederation of Indian Industry, TiE Mangaluru and Silicon Beach Programme, issued a statement stating they wanted to present a factual picture and “reaffirm our confidence in the region’s progress and inclusive spirit.”
They said that over 40 new IT companies had set up offices in the region in the past two years, providing employment to over 8,000 people.
“Today, the tech ecosystem sector includes 400+ startups, 250+ technology companies and 25,000+ professionals, reflecting sustained investor trust,” the statement read.
They also said that three homegrown tech firms were acquired, totalling an investment of around USD 250 million in the region. “Each acquirer has committed to further expansion in the region, signalling strong long-term confidence in our local talent and infrastructure.”
At the book release event, Muneer Katipalla, the Dakshina Kannada district secretary of the Communist Party of India (Marxist), was quick to support Priyank. “What Priyank said was correct in the context in which he was speaking. It was during the release of a book on the pain of people who had lost family members to communal violence, and not at an academic seminar on economics,” Muneer said.
He recalled Priyank mentioning that IT investors in meetings often asked if their employees, who often wore western clothes, would be safe, as they liked to go out to restaurants and pubs.
Muneer said that such a fear was “natural,” as Hindutva activists had carried out moral policing attacks such as the homestay attack of 2012 and the pub attack and attempted to stop events such as fashion shows that young people and others, such as IT employees, might like to attend.
Muneer also said that Priyank wasn’t the only one who had found fault with the impact of communal violence on business. He said that even after the hijab was turned into a controversy in the region in December 2021, the heads of several prominent private educational institutions came together to discuss the issue.
In the past too, prominent educational institution owners such as Mohan Alva of Alvas Group of institutions had issued statements in the media about communal violence affecting the region’s reputation.
An administrative official at a private institution offering undergraduate and postgraduate medical courses told TNM that the impact on educational institutions was significant.
“I’ve handled admissions queries from parents for 15 years. Communal violence is a big concern. Medical students, especially, are very scared when they get allotted seats in Mangaluru, because they read about the place in the news, and the first thing they find is communal violence,” the official said.
He said that he often explained to parents that there’s no trouble on a day-to-day basis. “Some get convinced, but those who have other options often don’t take the seats here.”
Senior journalist Naveen Soorinje argued in a recent piece that the fear of driving away investments had prompted BS Yediyurappa, who gave the BJP its first government in the state in May 2008, to take drastic measures.
Attacks on churches in Mangaluru in September 2008 by the Bajrang Dal brought the BJP intense criticism and international notoriety. Concerned that the attacks would drive away investment, Yediyurappa was forced to adopt a conciliatory tone.
Yediyurappa eventually granted an acre of land for a hall for the Karnataka Christian Association in February 2009.
Asked about this, Satish Kumpala said that he wouldn’t deny that there was communal violence. “But it has not affected development in the region. No company has gone away from here, and new companies keep coming. If such an atmosphere of fear existed, why would they come here?”
When it was pointed out that it was largely local businesses which were investing, Satish said, “Infosys is not local. There are lots of real estate firms. Each year, more flats are being built by locals and outsiders, and they’re all being sold. If they’re building, the atmosphere is conducive to it.”
Muneer said that the biggest drivers of capital in the region were educational institutions, hospitals and real estate. “Even though these are owned and run by locals, they don’t do anything for the economic development of local people except for a tiny number. If local people are going to shops to buy things, it’s because of family members who send money back from Mumbai, Bengaluru, or West Asian countries.”
