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Global Investors Meet at Bengaluru Steady Yeddy Ready For Big Things

Updated: June 26, 2010 10:40 am

When lotus bloomed in the southern part of India, i.e. Karnataka, under the stewardship of Chief Minister BS Yeddyurappa two years back, there was a mixed reaction among the public, the political circle and the Indian industries, whether the saffron man would be able to click the state. There were bottlenecks within and outside the party and the biggest threats were the Reddy brothers. But today Yeddyurappa stands tall on the state pedestal as witnessed in the recently concluded Global Investors Meet, where 361 MoUs close to Rs 4 lakh crore were signed. One can say it was a resounding success for the state, and Mr Yeddyurappa is now a beacon of hope for an advantage Karnataka, without having a communal tag like Gujarat Chief Minister Narendra Modi. Mr Yeddyurappa proudly announced to fulfil the vision of Bharat Ratna Sir M Vishweshwaraiah: Industrialise or Perish.

            In the peak of summer, when the common man in our country is standing in a queue for drinking water, the steel man of Karnataka Mr Yeddyurappa has turned the state into such a robust condition that there was a long queue of investors not only from India but also from outside the country. The CM has manifested the ideas to reach out to the last person of the state within a geographical limit, and aspirations for their complete well being. He claims that the state has to its credit, a whole range of innovations and breakthroughs across key sectors such as, IT, BT, agriculture, minerals, engineering, automobiles, food processing, textile and aerospace. Karnataka government has proposed 88 PPP projects with an estimate of   Rs 90,000 crore for development of infrastructure. A galaxy of big ticket

investors led by ArcelorMittal founder Lakshmi N Mittal attended the meet, inaugurated by Bharatiya Janata Party leader and leader of opposition in the Rajya Sabha Arun Jaitley. Other leading industrialists at the two-day meet included Aditya Birla Group head Kumar Mangalam Birla, ESSAR Group chairman Sashi Ruia, UB Group chief Vijay Mallya, former Confederation of Indian Industries president Venu Srinivasan, Infosys CEO Kris Gopalakrishnan, Wipro chairman Azim Premji, Baba Kalyani of Bharat Forge and Sajjan Jindal of JSW steels.

            In fact, while talking to different captains of the industry during the meet, Lakshmi N Mittal, the doyen of steel industry, openly accepted: Yes Karnataka has started emerging as an undisputed investment destination. The state has provided them a comfort zone by exposing true potential of Karnataka state, progressive policies, rich resources and rapid growing economy. Mr Yeddyurappa happily announced: “The meet was beyond our expectations and a landmark event in the state’s industrial development.” Mr Yeddyurappa beamed as Lakhsmi Mittal promised a long and fruitful association with Karnataka. “We will bring the highest standards of manufacturing into the state and will produce safe and sustainable steel,” Mr Mittal said.

            Wipro Ltd’s Azim Premji said it was time Karnataka got aggressive in attracting manufacturing industries and followed Tamil Nadu’s success in doing the same. Aditya Birla Group chairman Kumar Mangalam Birla said that his group would invest in excess of Rs 8500 crore in the state.

            The biggest investor in steel was not ArcelorMittal, the world’s largest steel company, but a local company, Brahmani Industries Karnataka Ltd. While ArcelorMittal plans to invest Rs 30,000 crore in Karnataka, Brahmani Industries proposes to pump in Rs 36,000 crore by setting up a six-million-tonne-a-year integrated steel plant with a captive power plant. The projects of both companies will be located in and around Bellary district.

            The two-day meet saw several memoranda of understanding being signed across various sectors. Mr Lakshmi Mittal was the first to ink a MoU with the Karnataka government to set up a 6 mtpa steel plant and a 750-MW power generation facility, employing around 10,000 people. (Brahmani’s project promises to give employment to 25,000 people.)

            Mr Mittal said if the progress in Karnataka is ahead of others, the company’s steel project in the state would get priority over projects in other states.

            JSW Steel plans to invest Rs 15,131 crore on capacity expansion and a captive power plant in Bellary, while Jindal Saw Pipes plans to set up a steel plant, again in Bellary, at Rs 130.88 crore. Bellary will get another steel plant, with Bhushan Steel setting up a 6 mtpa integrated facility at an investment of Rs 27,928 crore.

            Hazira Steel too signed an MoU firming up an investment of Rs 17,760 crore. Kalyani Steels and Bharat Forge (Rs 1,584 crore) too have proposed investments in power plants.

            Mangalore Refinery and Petrochemicals Ltd plans to invest Rs 8,656 crore in a coal-based thermal plant in Gulbarga. GAIL will lay a gas pipeline at an investment of Rs 4,544 crore.

            The meet witnessed the home-grown IT majors Wipro and Infosys Technologies marking their commitment to Bengaluru, the country’s IT capital. Both companies plan to set up software development centres at Sarjapur (in the city). While Infosys will invest Rs 2,250 crore on its facility that will employ 18,000 people, Wipro will pump in Rs 537 crore into its new centre.

            Birla Cement plans to invest   Rs 3,000 crore on capacity expansion, while Reliance intends to spend Rs 2,500 crore on a cement plant. The other investors include Shahi Exports (Rs 533 crore), Bombay Rayon and Scotts Garments (Rs 682 crore) for readymade garment exports, BEML (aircraft manufacture, Rs 316 crore), Zuari Fertilisers (urea plant, Rs 4,565 crore) and Narayana Hrudayalaya (Rs 990 crore on a 5,000-bed super specialty hospital near BIAL).

            The major foreign investors include Shell (R&D centre, Rs 1,376 crore), Lafarge (cement plant, Rs 1,500 crore) and Nestle (Rs 349 crore). The investments are expected to result in 8.65 lakh new jobs. Karnataka’s renewed developmental thrust in the past two year shows in its governance, driven by the technology of the times and the best practices across the globe. In a short span, the state government has been able to make it clear on the ground that a holistic intra-state approach is the only way to emulate its own Bengaluru and information technology success stories.

            The government has successfully put in place the new Industrial Policy 2009-14, an effort to enhance industry’s share in the Gross State Domestic Product to 20 per cent by 2014, generate 10 lakh jobs, double the state’s exports from the current level of Rs 1,30,000 crore, focus on providing quality infrastructure, focus on skill development and entrepreneurship, and enhance the development of micro, small and medium enterprises.

            It is a stark reality that approval of investment proposal or signing of MoU is only the first step in the long journey towards commissioning of the project. Mr Yeddyurappa knows that he has to face many challenges and many milestones to cross in the future. It is not that easy to believe the promises of the government officers and ministers who will have to sincerely facilitate the implementation of the projects in the state. The CM has a hard task ahead whether it is financial closure or hiring the right talent, and providing land, water or power. Motivate the banks and other financial institutions to extend their financial support to the corporate signing the MoU is also a hard job, as he has also to manage the half-managed Reddy brothers. But one hopes that as far as the socio-economic development is concerned, the decade after this meet will be distinct from the decade before the meet under the chief ministership of SM Krishna.

            All the above descriptions and achievements are only a preliminary report of any developed state. But one can say that a good start is job half done. As the investors have reposed their faith in Mr Yeddyurappa’s able leadership, ultimately the people of the state would reap the benefit of a developed state. And the message of good governance would spread to other southern states that the saffron government can brought success there too, and the BJP may take advantage of the situation by spreading its influence from north India to southern states on a developed agenda.

By Deepak Kumar Rath

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