The Hindu : Karnataka / Bangalore News : Political instability hits investment

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Thursday, Nov 22, 2007
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Karnataka

Karnataka - Bangalore

Political instability hits investment

Nagesh Prabhu

The view is that governance in the State has been in a limbo for too long

Industrialists saw the fractured mandate of 2004 as a disincentive
Investors are moving to Andhra Pradesh and Tamil Nadu

BANGALORE: The political instability and the fall of three governments in the last 41 months may result in a lowering of investment confidence and may slow the flow of investment in the coming days.

From industry associations, information technology businessmen, small entrepreneurs and economists to fruit vendors the view was that governance in the State has been in a limbo for too long and the absence of popular government would impede the industrial growth and drive away the capital from the State.

Despite the image of a progressive State, factors such as absence of a popular government, indecisiveness of bureaucracy, and the lack of coordination among various departments would slow down the flow of investment. Industrialists had seen the fractured mandate of the 2004 Assembly election as a “disincentive” for prospective investors.

M.C.R. Shetty, president, Karnataka Small Scale Industrialists Association, said the previous Government had done nothing better to the industry. “The long political instability is going to adversely affect the industrial growth and economic development,” he said.

Jacob Crasta, vice-president, Federation of Karnataka Chamber of Commerce and Industry (FKCCI), said, “The industrial growth is in jeopardy and investment is moving to Andhra Pradesh and Tamil Nadu owing to bad roads, power crisis, lack of good transport system in the State capital and other parts. The infrastructure sector is a victim of bad governance.”

The last State High-level Clearance Committee meeting was held in August and it had cleared 59 industrial projects, including 14 Special Economic Zones, with an investment of Rs. 63,561.24 crore.

Economist R.S. Deshpande says, “Karnataka economy was ready to record significant growth. However, the political bankruptcy has reset the clock of development. We hope that developmental thinking will be on the foreground during the coming elections than the group bickering.”

The image of a reforming State was sinking due to the stagnant growth of its infrastructure. “There is no proper road connectivity to the international airport coming up at Devanahalli. This itself speaks about the quality of governance in the State,” pointed out T. Ramappa, secretary general, Bangalore Chamber of Commerce and Industry.

Ashwin Naik of Darbe Industries says, “I hope people will give a clear verdict in the next Assembly election.

“We are tired seeing the way the coalition governments functioned in the past three years. A fractured mandate again will definitely create unhealthy economic climate.”

Development schemes in the State have to come a grinding halt, thanks to unstable governments.

“Politicians are only bothered about power and not our welfare,” said a fruit vendor. “I have never seen such betrayal in politics. The people of other States laugh at us,” he added.

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