Much achieved, a lot more remains

Written by Reema Jose | Updated: Dec 31 2008, 06:21am hrs
Karnatakas best is past. This is how RK Misra, a Bengaluru-based urban planner described the states growth in the past decade. The state was once considered a land of opportunities. Now it is a place of discontent, thanks to inefficient governance, he said, citing a recent KPMG survey that rated Bengaluru poorly in terms of its attractiveness to investors. In the survey, Karnataka had scored among the lowest in terms of attracting fresh investments and much below the national average in terms of entrepreneur confidence. The states infrastructure is seen to have lagged behind its development, said the KPMG report.

Currently, Karnatakas software exportsits claim to global famehovers at around Rs 60,000 crore, topping IT exports by other Indian states. The state is home to nearly 2,000 software firms, of which over 60% are in Bengaluru.

However, the states transport and power infrastructure has not matched its global image as an IT hub yet. The civic life is no better, and government authorities struggle to man sewage and drainage systems in the city housing six million. Rains lead to incessant traffic jams and floods in many parts.

Bengaluru-based corporates say that Karnatakas sorry state of infrastructurewhich is now as famous as its software success storywas seen coming for a long time. The successive governments in the past six years stopped planning for expanded growth while playing the urban- rural card for political gains, said an IT entrepreneur.

Poor urban planning, lack of political will and inefficiency of bureaucracy stalled many ambitious infrastructure projects. The new international airport in the city became operational in early 2008, over a decade after it was planned. Construction work on civil transport projects such as the metro rail and mono rail were moving at snails pace.

Apart from funds sought for few projects for sewage and drainage management, the state has not yet proposed any major development schemes under the Jawaharlal Nehru Urban Renewal Mission. A special policy for private public partnership which was planned two years ago, died after a number of meetings at bureaucratic levels, according to Misra, who formerly co-chaired an industry-government empowered committee on infrastructure. The current BJP-run government has not announced any significant infrastructure projects for the state yet.

The president of the Bangalore Chamber of Industry and Commerce Ramappa said that entrepreneurs were hesitant to invest in Karnataka as the poor infrastructure signaled to prospective investors that a part of the state management was inefficient. He added, Poor roads, bad traffic and sewage management as well as high costs of power in the state are significant deterrents for prospective investors.

The state could not win any major investment projects, including the most recent Tata-Nano plant and the SemIndia fabrication Unit. No new investor is looking at Bengaluru. Investments are only made by companies who have already built a base here, he told FE.

The current state government and those before that failed to sell Karnataka to prospective investors, according to Misra. Post the S M Krishna government, no one sold Bangalore well enough to industry. Coalition governments manned the state in the past four years, and the image has only suffered.

According to Ashok Kheny, head of head of private infrastructure development firm NICE, says while the state government is quick to sign MoUs, but when it comes to actual implementation, a lot remains to be done. There are no water tight policies to back PPP projects, he said. The MoU for NICEs PPP based Bangalore-Mysore Infrastructure corridor project was signed in February1995, but much of it remains incomplete after being caught in legal suits with the state government over issues of land acquisition.

Meanwhile, Bengalurus neighboring cities, such as Mysore and Hosur have begun to attract investments from expanding companies. State governments have also tried to promote semi-urban centres like Hubli and Dharwad as investment destinations.