Bengaluru: Karnataka chief minister H.D. Kumaraswamy on Monday launched two industrial clusters in Koppal and Ballari, two of the state’s most backward districts, as part of an ambitious ‘compete with China’ programme to attract investments, create jobs and bring down the stark imbalance in growth within the state.
The push for industries also helps the chief minister shed his pro-rural, pro-farmer image. Kumaraswamy’s policies have so far been largely focused on the agricultural sector.
Koppal will be a toy manufacturing cluster that is hoping to attract around ₹5,000 crore in investments over the next five years. The mineral rich district of Ballari will be dedicated to textiles and apparel.
“My government has a pro-business approach in order to alleviate poverty and expand the middle class," Kumaraswamy said on Monday in Bengaluru.
The cluster based approach, considered a pet project of Kumaraswamy, aims not just to compete with the manufacturing might of India’s formidable neighbour but also create almost 1 lakh jobs per district to absorb the large young workforce in the state and curb migration of rural youth into cities.
The Janata Dal (Secular) or JD(S) and Congress coalition government in Karnataka has set itself a goal of creating 10 million jobs in five years that it aims to use against Prime Minister Narendra Modi, whose National Democratic Alliance (NDA) government at the Centre has been accused of promoting policies that have stunted economic growth.
The earlier Congress government and the incumbent coalition are trying to counter the ‘Gujarat model of development’, a phenomenon instrumental to Modi’s rise to the national arena. Karnataka is home to some of the largest information technology companies, start-ups, aviation majors and other high growth industries.
Karnataka maintains that it has been able to create more jobs and grow at a much higher rate than the national average.
India’s unemployment rate spiked to a 45-year high of 6.1% in 2017-18, according to a leaked report of the National Sample Survey Office (NSSO), giving the opposition more ammunition to attack the Bharatiya Janata Party (BJP) with.
However, the Karnataka government clarified that this was not a ‘manufacturing war with China’ but an opportunity to learn. Karnataka is promoting the cluster-based approach and has so far identified at least nine such projects in solar panels, mobile phone components, sports and fitness goods, agricultural implements, sanitary ware and bathroom fittings, and LED manufacturing among other areas that has the ability to create large scale employment.
With unemployment becoming one of the biggest platforms for political parties in the upcoming polls, state governments have been offering cheap land and tax breaks for investors to set up shop here to help create jobs.
Industry leaders said that companies willing to set up shop in Karnataka require fiscal support like subsidies on fixed assets, wage, interest and power and other help like relaxation of fixed term employment and allowing night shift employment for women.
Aeques Force Consumer Products Pvt Ltd signed an agreement to invest ₹1,500 crore in Koppal to set up a toy manufacturing unit while four textile companies signed up to invest around ₹500 crore. The investments are expected to generate about 40,000 jobs.
Ahmed Al Banna, the UAE’s ambassador to India, met Kumaraswamy on Monday and expressed his country’s interest in investing in infrastructure development, establishment of food parks and low-cost houses in the state.