High on hype: How investment announcements at Karnataka Global Investors Meet fared? (original) (raw)

Though the biennial Global Investors Meet (GIM) in Karnataka has grabbed headlines for the Memorandum of Understandings (MoUs) signed during the event, data shows that only a fraction of the investment promised was realised. The same was the case with investment proposals cleared by the State High Level Clearance Committee (SHLCC) and State Level Single Window Clearance Committee (SLSWCC), according to data.

Karnataka is all set to host the GIM from February 12-14, eyeing investment proposals worth Rs 10 lakh crore. The last GIM was held from November 2 to 4, 2022, in Bengaluru, after its previous edition in 2020 was postponed due to the Covid-19 pandemic. Following the event that cost the state exchequer Rs 74.99 crore, then Industries Minister Murugesh Nirani had said that Karnataka had received investment proposals worth Rs 9.81 lakh crore during the three-day summit.

However, in a response to an unstarred question by JD(S) MLC S L Bhojegowda in the Legislative Council in February 2024, the Industries Department said that the total value of the 57 MoUs signed by the government at GIM-2022 was 5.41 lakh crore. The total number of jobs projected to be generated due to the investment was 2.81 lakh.

The reply also revealed that 14-months since the investments were announced, only two projects worth around Rs 22,000 crore – 4 per cent of the value of MoUs signed – had received clearance from SHLCC and SLSWCC. While SHLCC clears projects valued over Rs 500 crore, SLSWCC approves investment projects costing Rs 15 crore to Rs 500 crore.

Of the remaining, 18 projects had applied for clearance while 37 companies that signed MoUs with the government had not applied for approval from the two Committees. Though the companies have three years after signing MoUs to set up industries, the data reflected allegations that only a small portion of the investment was realised.

The issue was highlighted during a discussion in the Council over GIM expenditure in the 2022 winter session of the legislature. Congress MLC U B Venkatesh had noted that during the first GIM in 2010, the government claimed to have signed MoUs worth Rs 3.94 lakh crore. “But in reality, only 14 per cent of the proposals were realised,” he had said. The Congress, which was in the Opposition then, had also flagged the massive expenditure for the three-day event.

For the current edition of GIM scheduled from February 12 to 14, the Karnataka government cleared an expenditure of Rs 75 crore in a Cabinet meeting held in June 2024.

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Other clearances

The trend of big-ticket investment announcements remaining on paper is also seen among projects cleared by SHLCC and SLSWCC.

Data shows that between 2013-14 to 2024-25, the SHLCC cleared 260 projects worth Rs 6.45 lakh crore. As of November 2024, less than half of these projects valued at a quarter of the total investment promised – 106 worth Rs 1.65 lakh crore – was implemented. While 34 projects were dropped, 120 were ‘under implementation’.

Even the projects cleared by SHLCC in 2013-14 were under implementation, according to data. In the said year, 46 projects worth Rs 39,450 crore were cleared, of which 20 with an investment of Rs 22,210 crore were implemented, 10 (Rs 5,023 crore) were under implementation and 16 projects (Rs 12,216 crore) were dropped. Similarly of the 36 projects worth Rs 52,148 crore cleared in 2014-15, 17 worth Rs 4,803 crore were realised, 12 (Rs 44,507 crore) were under implementation and seven (Rs 2,837 crore) were dropped.

A similar trend is also seen in projects approved by SLSWCC. In the period between 2013-14 to 2024-25, the Committee cleared 3,681 projects worth Rs two lakh crore. As of November 2024, only 579 projects worth Rs 42,808 crore were implemented, while 2,759 proposals worth Rs 1.42 lakh crore were ‘under implementation’. The number of projects dropped was 343, valued at Rs 15,449 crore.

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For GIM 2025, Karnataka Industries Minister M B Patil has said that investment to the tune of Rs 10 lakh crore was expected across key sectors. The minister said recently that the government had set a target of realising “at least 70 per cent” of these commitments.