Fast, transparent and effective governance: Karnataka’s offer for industrial growth - Shri R.V. Deshpande, Minister for Large and Medium Industries , Govt of Karnataka

By Editor 2017

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Raghunath Viswanath Deshpande, third-time Industries Minister of Karnataka has been a trailblazer and visionary par excellence. His ten years as Industries minister from 1994-2004 saw Karnataka emerging as the IT-BT Powerhouse of India. Almost a decade after the landmark IT Policy (1997) and the IT Venture Capital Fund (1999), now he has spearheaded the Karnataka Startup Council and Startup Venture Capital Fund. While Bengaluru is proudly hosting the Make in India Conference and the Aero India 2017 , Shri Deshpande discusses his vision and way forward for industrial development in the state. Excerpts from the interview.

Following the stupendous success of Pravasi Bharatiya Divas, what do you look forward to in the upcoming Aero India 2017 and Make in India Conference?

Aero India is India’s premier Aeroshow which is famous worldwide. Bengaluru has had the privilege of hosting this event since 1996, which itself is a recognition of the immense importance of Karnataka and in particular Bengaluru for the sector. Make in India on the other hand is an initiative of national importance, which has several focus sectors in which we intend attracting investments, including Aerospace and Defence. However, the core theme of both, as far as Karnataka is concerned, is common and that is to showcase India and Karnataka as ideal investment   destinations for manufacturing. Therefore, we strategically positioned Make in India a day prior to Aero India 2017 so that we could encourage investors and delegates to participate in both events. As always, we expect these events to generate a tremendous amount of interest from existing and new investors. Further, events like Aero India not only serve as an investment and interaction platform but also provide an opportunity for companies to showcase their technical and technological capabilities which go a long way in motivating other companies and budding young entrepreneurs.

Enabling ease of doing business in the state, how successful is your initiative for Single Window Clearance Mechanism for infrastructure facilities, incentives and concessions?

I have always maintained that Ease of Doing business (EoDB) is an ongoing process. Due to the nature of evolving businesses and related policy regulations which also constantly change, no country or state can sit back on its past achievements and laurels with respect to EoDB. That said, nearly 15 years ago, Government of Karnataka took the lead on EoDB by introducing the Single Window Facilitation Act. This was followed suit by many other states. Many rules have changed in business hence. Therefore, two years ago, we examined and upgraded several archaic rules and regulations to keep abreast of such developments and we are confident that they are being well received by industry. Our doors are wide open for anyone who wants to share ideas on how to improve ourselves further.

Karnataka is home to the fourth largest technology cluster in the world. In such an unparalleled cluster-based approach for development of Aerospace, Biotechnology, Crafts, ESDM, IT, Agro and Textile industries, what are the new direction that you are looking into?

If you examine the way in which clusters develop, you will notice striking similarities in every sector. Generally an anchor sets up its base, which in turn helps mushroom its ancillaries. This creates a small cluster which spreads to other part of the region over time creating bigger clusters and ecosystems. All sectors you have mentioned have developed similarly over time. But the common denominator to all these is the availability of skilled and talented workforce, an entrepreneurial mindset and presence of strong institutions. Karnataka is blessed on all three parameters which is why we are India’s leading technology hub. As Government our endeavor has been to add the fourth dimension which is to provide fast, transparent and effective governance and that is where our focus will be in the coming months and years.

On the eve of the Aero India Expo 2017 in Bengaluru, how do you propose to focus more on the Aerospace initiatives?

Enough has been said about the importance of Aerospace for Karnataka. At the event itself, we are setting up a huge Karnataka pavilion to showcase the state’s potential in the sector. In addition, Hon’ble Chief Minister of Karnataka Sri Siddaramaiah will be attending the inaugural and will be present to meet investors. I, along with my team of officers will be present for two full days for meetings. This is not all. We have been proactively reaching out to existing and new investors to understand their future plans in India and Karnataka.

With your more inclusive, holistic vision for development, how promising are the project proposals currently being processed by the Karnataka Udyog Mitra in terms of infrastructure growth in tier-2 cities and rural areas of the state?

The fact that we are keen to disperse industrial growth to all parts of the state is not just in intent. We have ensured that this reflects in policy as well as in our actions. Our industrial policy 2014-19 gives special emphasis for investments in the HK region and tier 2 and 3 towns. We are promoting towns such as Belagavi, Mysuru, Hubballi– Dharwad, Mangaluru Yadgir, Hassan, Kalaburgi and others in a big way. Over the last two years since the policy has been announced, we have encouraged investors to make fresh investments in these regions. We have also consciously pushed investments out of Bengaluru. Tumakuru node, which is part of the Chennai Bengaluru Industrial Corridor is also coming up in a big way. Several investments are being considered by both HLCC and SLSWCC in tier 2 & 3 cities. However, these things do take time but the spade work is constantly on.

Karnataka’s start-up policy was yet another trail-blazing initiative in India. How successful are we in attracting young entrepreneurs to new ventures, crossing the traditional barriers of investments or IT orientation?

Karnataka’s ecosystem for start-ups is one of the best in the world. This is already well documented in various independent reports. And as I said earlier, Government’s focus has been to provide effective and efficient governance. We do not differentiate whether you are in IT, BT, Pharma, Aerospace, or you are a start-up or an SME or a large company. Our start-up policy and all the initiatives being taken by the Department is creating tremendous buzz in the sector. Within a week of launching the start-up booster kit we received more than 600 applications to leverage on the opportunities being created and many more are expected to join this bandwagon. And let me also tell you that about 30% of these are non IT in nature. We are proud of the start-ups which have made it big from Karnataka and our endeavor is to provide the right ecosystem so as to create many more unicorns.

The fallout of the recent demonetisation is yet to be assessed comprehensively. However, do you think it would in any way reflect on Karnataka’s growth rate of domestic product? Do you perceive a shift in strategy for the state in terms of trade and business?

The jury is still out on the effects of demonetization and at this point I would like to refrain from making any sweeping statements. However, from Government of Karnataka’s perspective, we support any step which brings more transparency and accountability into the system. We will have to wait and see how much this step has impacted industry and other sections of the society.