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Only 35 percent of investments in Karnataka took off: Assocham

Bangalore, Aug 8 (IANS) Only 35 percent of the Rs.7.33 trillion (Rs.7.33 lakh crore) investment projects in the public and private sectors have been commissioned in Karnataka or are at various stages of implementation, the Associated Chambers of Commerce and Industry of India (Assocham) said Sunday.

‘Though pro-active Karnataka attracted a whopping Rs.7.33 trillion investments till March this year, only 35 percent of them are under implementation, while 65 percent of projects are yet to take off,’ Assocham secretary general D.S. Rawat told reporters here.

An assessment by the chambers on ‘Growth Performance in Karnataka’, found that the state attracted 1,346 investment projects over the past decade, with the manufacturing sector accounting for the lion’s share (42.5 percent) of total investments, followed by power (22.3 percent), services (16.2 percent) and real estate (13.2 percent).

‘Global recessionary trends and slow down in the Indian economy last fiscal (2009-10), however, resulted in the poor take-off of investment projects in the state,’ Rawat noted.

In the core sector, investment in mining was a mere 1.7 percent, while irrigation witnessed 0.8 percent deceleration last fiscal compared to previous fiscal (2008-09).

Similarly, share of investment in real estate declined 6.5 percent during the last two years compared to other sectors though growth year-on-year basis was 0.3 percent in last fiscal.

‘Growth of construction industry is crucial to economy, social and human development which should be sustained by adoption of energy efficient housing sector,’ Rawat pointed out.

Out of total investments of Rs.105 trillion the country had in last fiscal from public and private sectors, Karnataka’s share was 7.4 trillion or 7.1 percent. Two-thirds of total investments in the state were by private sector while government sources accounted for remaining one third, the study said.

‘We have laid out multi-pronged strategy for the state’s economic development so that it becomes a lead investment destination. Power sector projects needs to be implemented without delay as it remains a key sector for ensuring economic development,’ Assocham’s southern regional council chairman Ravi Sannareddy said.

‘Karnataka has established a lead in IT related services along with modernisation of ports especially, airports. The state needs to pursue its metro projects with vigour so that steel and cement and other allied sectors grow simultaneously,’ Rawat added.

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