Karnataka plans to set up new airports to usher in investment
Investors appear to be warming up to idea of exploring other regions in northern Karnataka
BENGALURU: Karnataka has decided to take the aerial route to help rectify regional imbalances in the calamity-prone state through the construction of new airports and increased connectivity to deflect investor interest away from Bengaluru.
While there has been stiff resistance to setting up industries in Tier-ii and TIER-III cities in the past, new investors appear to be warming up to the idea of exploring other regions in northern parts of Karnataka, which couldn’t be more different from the south, that, if it materialises, will hope to alleviate sufferings of the people in one of the most backward regions in the country.
While other states also have the same problem of one large urban centre basking in all the investments, wealth and expenditure, the situation couldn’t be more pronounced as in Karnataka which has focused all its energies on Bengaluru alone.
Airports are part of the strategy to spread out investments across the state.
Besides the eight operational airports – Bengaluru, Belagavi, Hubballi, Mysuru, Mangaluru, Kalaburagi, Vijayanagara and Bidar – at least four others at Vijayapura, Shivamogga, Chikamagaluru and Karwar have reached various stages of construction.
“The mindset to be around Bengaluru has changed with better connectivity like new airports, cheaper land and labour and other incentives,” Jagadish Shettar, Karnataka’s industries minister, said. These new airports, the government believes, will renew interest from investors who have so far preferred Bengaluru and its established ecosystem in information technology, aviation, startups and biotechnology among others.
While Bengaluru remains one of the richest centres in the country due to software exports, a significant portion of the state endures hardships due to extreme seasons, decline in agricultural income and abject poverty.
Regional imbalances in Karnataka have only grown over the years irrespective of the party in power that has forced successive governments to dedicate more resources for healthcare and infrastructure to India’s technology capital while leaving other parts of the state largely underdeveloped. These areas felt the impact of the coronavirus pandemic harder than Bengaluru.
According to the state government, 400 out of the fortune 500 companies have a presence in Karnataka of which most of them are in Bengaluru or in the vicinity of India’s IT capital.
There is an “aspiration” value attached to Bengaluru that other parts of the state do not enjoy, legislators and industry bodies say. This ecosystem in Bengaluru, including availability of skilled labour and connectivity, has attracted global investors despite problems like poor quality of life, bad roads, high cost of land and inadequate infrastructure.
However, a reasonable amount of recently-approved investments are in places like Hubli, Kalaburagi among other districts of the state. The new industrial policy also assures incentives for companies who will set up shops outside Bengaluru. Between June 15, 2019 and December 21, 2020, two highlevel investment approving bodies in Karnataka – one chaired by the chief minister and the other by the industries minister – cleared 446 projects (including additional investments from existing industries) valued at ₹83232.76 crore and which, if materialises, can provide employment to over 2.1 lakh people, according to government data.
Besides its cluster-based approach in sectors like aerospace, electronic, toys, IT/ITES, electric vehicles among others, the state has also aggressively pursued companies looking to relocate out of China after the Covid-19 outbreak.
But delays in clearances, corruption and other related problems have weighed in on the state’s investments prospects, rendering several investments to remain just on paper. Delays in making land available has cost Karnataka a chance to convert investments totaling to at least ₹39,000 crore with a potential to generate over 80,000 jobs between 2013 and 2018, state government data revealed.