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The Rediff Business Interview/S M Krishna

'We are committed to offering the best'

Part-I: 'Karnataka will pull out all stops to attract investment'

Suave and flamboyant, the Karnataka Chief Minister Somanhalli Mallaiah Krishna remains unfazed in the face of the hype and hoopla generated by hosting a successful meet with millions of dollars worth investments pouring in. With the day of reckoning behind him, the CEO of Karnataka is raring to go for more.

He continues his tete-a-tete with Fakir Chand on his plans and vision for Karnataka.

What was your gameplan for the Global Investors' Meet?

The gameplan for the meet was to not only demonstrate the will and commitment of this government, but also to that all the investment proposals would be cleared by this month-end through the single-window agency of the departments concerned.

I want to send a loud signal across the world that Karnataka means business and that the prospective investors will find everything going in their way, be it clearances, sanctions, approvals, letters of intent, and what have you. In the present-day liberalised and globalised set-up, foreign and private investors have an excellent opportunity to tap the potential in any area, right from infrastructure projects to knowledge sectors, including bio-technology, agro or food-processing, and even tourism as Karnataka is renowned for its rich flora, fauna and beaches.

It is in the growth-oriented and infrastructure areas that the government is seeking massive investments from global / domestic / private players as the state is no longer in a position to fund huge projects because of its commitment to irrigation, healthcare, education and rural development.

Resource-constraint is a national phenomenon. It is the same situation with other state governments. Even the central government spends most of the money on salaries, developmental works, debt servicing, and non-plan expenditure. While all-out efforts are being made to contain the latter, there is not much leeway in pruning on other fronts due to excess staff, higher interest burden, and allocation in priority areas.

What impact did the two-day conference have. What kind of response have you managed to generate from it?

To say that it was overwhelming will be an understatement. The kind of enthusiasm and 'feel good' atmosphere it has created is seen to be believed. Though we have to wait till the month-end for the final outcome, the spontaneous response of the investors from overseas and domestic players is beyond our expectations.

We had not set any initial target, at least for the duration of the meet. However, the prophecies of doom were proven wrong on the very first day of the meet: as many as five memoranda of understanding, or MoUs, were signed for investments worth Rs 35 billion in diverse areas.

And if this was not convincing proof of the state's potentiality or the government's credentials, the concluding day turned out to be a resounding success with a bonanza of Rs 40 billion worth investments in the form of MoUs. The surprise announcement by News Corp of media mogul Robert Murdoch to set up its broadband Internet-cum-digital studio facility in Bangalore at an investment of Rs 10 billion was just the icing on the cake.

If this is the kind of response the meet has generated, I have no doubt about Karnataka turning around and catching up with other states, especially Tamil Nadu, in becoming the most-favoured destination for investors. To wit, this is only the beginning. We have a long way to go as the erstwhile government had failed to capitalise on the sound investment climate the state has, relegating its position even behind Orissa, as per CMIE.

The impact of the meet will be far-reaching. It will have a domino effect on the existing entrepreneurs who were dejected with the apathy of the previous regime: they wondered about their future and whether it was worth the trouble to stay back.

Have you set any time-frame for the effective implementation of the proposed projects? What else is in the pipeline?

As already spelt out, the government, particularly the officials concerned are committed to ensuring that there would not be any delay on our part in processing the papers, and would go all-out to help them implement their projects within their schedule.

Wherever central clearances are due, the state would step in to expedite the procedures so that there would not be any roadblocks holding up their implementation. I have given an undertaking to all these investors that I'll personally monitor the progress and facilitate their implementation in record time.

As I have stated earlier, we have made a beginning on a very promising note. By the end of June, we will be able to assess the overall impact the meet has made and the quantum of response in terms of firm proposals. Enquiries, presentations, and inter-action are going on all the time between the would-be investors in areas spanning manufacturing, processing, services, agro-based industries, infrastructure projects and tourism.

We have set the ball rolling and momentum will be maintained. The government will not rest just on its laurels or go complacent by basking in the success of the investors' meet. We have to become the most-favoured destination to attract more investments.

Will Bangalore ever have an international airport?

Undoubtedly! Ever since the Congress government came back to power, we have relentlessly pursued the matter. It is only because of our pressure, coupled with the growing expectations of the 6 million people of this city that the state could secure all clearances from the Union government on this issue.

The bids have already been called, and the entire administrative exercise at the state level will be completed by October. In fact, I have invited the Prime Minister to visit Bangalore on November 1, to lay the foundation-stone for the new international airport at Devanahalli to be constructed at an estimated cost of Rs 15 billion in joint collaboration with the state government.

We are aware of what happened in the past. The entire project seemed jinxed. The Tatas, too, pulled out of the project expressing frustration at the delays in securing approvals.

However, I am now bound to stick to our assurances as Bangalore can no longer afford to remain without a world class airport to meet the growing needs of its citizens, especially its thousands of IT professionals and multinational companies' employees.

Meanwhile, the existing airport is being upgraded to international standards to enable direct flights from the US, Europe, and the Asia-Pacific region. The domestic and international traffic is growing at a tremendous rate. This is boom time! Even international airlines like United Airlines are keen to operate to and from Bangalore. We are pursuing the matter with the Union Civil Aviation Ministry in Delhi. We hope to get a favourable response soon.

What about the development of the rural economy?

The Development of Bangalore or the growth of industries in the state will not be at the cost of the rural folk. That is the solemn responsibility of the state government. The goal is to take all the developmental works right up to the village level.

That is the ultimate agenda of the reform package with a human face. The proposed investments in the infrastructure projects will have a far-reaching impact on the countryside in the state.

While foreign and private investments will go into high-tech growth areas and in building the core infrastructure, it is the onus of the government to only facilitate all-round development in the state.

The resounding victory of the ruling Congress even in the district administration elections last week goes to show that the rural folk are also with the government and endorse its various development programmes and policies. We will not rest merely on our laurels won only on account of urban growth. We will take the whole initiative to its logical end.

Unless the economic reforms percolate down to the village level, the task of governance will remain incomplete. It is our solemn assurance to the people of the state to ensure equal development for the prosperity of all.

To that extent, during the 8-month of my tenure, I have been able to convince the World Bank to grant a $ 3-billion assistance over the next 2-3 years to provide basic amenities and world class infrastructure.

Though external financial assistance will be timely and beneficial to the state in the long term, the strings with which it comes for compliance are equally daunting. It will be like walking a tightrope, as we will have to prune expenditure on subsidies and ensure transparency and corruption-free governance.

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