Karnataka Chief Minister Siddaramaiah is just a few hours away from announcing the historic budget for 16th time on March 7 at Vidhana Soudha. All eyes are on the government this time as the last two budgets focused more on freebies and not on investment. Therefore, Mohandas Pai, Chairman, Aarin Capital believes that this budget can either make or break the government.
He said, “There were no large job creation programs in the earlier two budgets. Anything done in this budget with a focus on investment will take two to three years to show results. Unless this budget is a job oriented, investment oriented one, the entire five year rule of the Congress led state government will be remembered for a rule of freebies and not of growth development or job creation.”
Expand IT sector beyond Bengaluru
Pai believes that the IT, BT sector is a major player in the market especially in Bengaluru that creates more than 30 lakh direct and indirect jobs. Therefore, the state budget must focus on expanding the IT sector beyond Bengaluru by building incubators or T-hubs like those in Hyderabad.
He says. “T-hubs must be built in Mysuru, Mangalore, Hubballi, Belagavi and Kalaburgi. In each of these places, business parks should be set up so that people can relocate their companies. Today, if tech companies want to relocate to Mysore or Mangalore there is no office space available for them. It is a pathetic situation. In addition to this, government should allocate funds to develop hi-tech industries like AI, Robotics, Quantum computing, Biotechnology. Thus, making the city and state more competitive.”
Meanwhile he reflected on the GDP contribution of the silicon city towards the state and India when compared to neighboring states. He stressed that Bengaluru deserves better facilities. “Bengaluru requires special focus as the city’s GDP is around 50-55% of Karnataka. Bangalore’s per capita income is 15,000$. More than 60 % of taxes are paid from Bengaluru. Karnataka pays more income tax and corporate tax than Gujarat and Tamil Nadu combined.”
Incentivizing industries to provide jobs in Northern Karnataka
With most of the industries and companies having concentrated in the Southern region of Karnataka Northern Karnataka suffers from low job creation and labour surplus. For this, the only solution according to Pai is to incentivize industries to move to Northern Karnataka by grants of providing 2000 rupees every month for 24 months for every job. “These industries must also provide ESI and PF to their employees. The Union Government reimburses ESI and PF money and this will lead to incentivizing many labor intensive industries to come to North Karnataka,” he added.
Improving road networks
With bad roads in and around the state, currently the majority of the goods are exported through Chennai ports. He explains, “They must build an eight lane network connecting Bidar to Bengaluru opening a way for development in the northern districts. There should be one route connecting Karwar and another route to Mangalore through a tunnel in Shiradi ghat so that goods produced in Karnataka can be exported through the Mangalore port.”
Not just developing roads for mobility but this can lead to developing industrial estates. Pai thinks that the Government has to invest in developing new industrial estates. “On this expressway from the Bidar side, every 50 kilometres, there should be an industrial estate of 5,000 acres with all the facilities offered so that more jobs are created,” he says.
Improve roads in Bengaluru to retain the name IT capital
In 2024, the government had announced an allocation of 27,000 crore to develop peripheral road. However, this project hasn’t progressed a bit. Pai opines “There is a need to invest more on the city and start developing peripheral roads, redo the outer ring roads and resurface the major roads in the city. Public transport must be improved on a large scale. The city alone requires 15,000 electric buses which currently has 6,000 electric buses that too with a bad quality. Private organisations must be allowed to run electric bus services in the city as the government doesn’t have money to invest.”
It is high time that the state government must approve third phase of metro and allocate budget for it. Currently, Bengaluru has only two operational metro lines which is Green and Purple line. Blue line, Pink line and Yellow line are still under construction. While the Purple line connects Whitefield to Challaghatta which is 43.49 kms long, Green line connects Nagasandra to Silk institute which is 33.5 kms long.
Pai says, “The metro is running beyond schedule because of the bad management of the earlier managing directors. Government must review the project every 15 days to check the progress and ask the contractors to work faster. There is no certainity on when there will be full-fledged metro in the city.”
Invest on higher education
Karnataka should invest more in higher education where outlay has remained stagnant for a long period of time. In 2021-22, Karnataka spent only 11.8 % of its total budget on education which is lower than national average 13.9%. In 2023-24, it was further reduced to 11% only.
“More money should be invested in the area of STEM in Northern Karnataka. Good engineering colleges should be established in this region so that students get quality education. This will enable them to get good jobs.”