FKCCI asks

B'lore: Bang or Bust?

The statistics do not always tell the true story. Karnataka is one among the top five industrialized States in the country and Bangalore, one of the top 10 technopolises in the world, but these figures are like pouring salt over the wound of the industrialists, especially the small scale industrialists. What are the problems plaguing the industry and how do we address their long standing grievances? At the annual press meet of the Federation of Karnataka Chambers of Commerce & Trade (FKCCI) held at the Century Club, Sri S.S. Patil, President listed out the tasks before the Governor under three areas, viz. infrastructure, industry and trade. It is now up to the Government to respond to the FKCCI’s prescription and prove that statistics, indeed, do not lie. A special report on the FKCCI’s presentation:

B’lore: Bang or Bust?
Bangalore has about 10% of the State’s population, accounts for more than 50% of the State’s GDP, more than 60% of the State’s tax revenues, contributes 80% of its exports, and generates the highest number of jobs in the State. But while adding more bang to the buck, the burgeoning civic problems has made life miserable for the people!

The idea of developing satellite towns to decongest the city, is yet to get off the drawing board. The Bangalore International Airport at Devanahalli is likely to take off in March 2008, and the high-level task force appointed to ensure faster connectivity and unhindered traffic flow should realize time is not on its side and speed up the implementation. The Bangalore Metro Rail is chugging along at a leisurely pace and unless it gets going faster, the traffic problems will continue to depress the industry.

Export market
There is a strong case to favourably consider the exporters’ demand to lower the rate of interest on short term credits and also allow a higher duty entitlement passbook scheme and drawback rates. The textile exporting community in particular has been badly hit by the volatility in the export market. In fact, the Finance Minister has asked the exporters to hedge their exports against the currency appreciation. In the present scenario, the unfavourable exchange rate will lead to moderate realizations.

Better R&R
Roads: Top priority should be given to developing better roads and railways. Two-laned State highways, four-laned high traffic density corridors, super national highways, and prioritizing the special purpose vehicle viz. the Karnataka State Highways Improvement Project, are the need of the hour. A separate agency named as Road Board should be formed the entrusted the responsibility of maintenance, identification and implementing the projects.

Railways: FKCCI will lead a delegation to Delhi to press for the development of Mehboobnagar, Gadag, Hospet and formation of divisional offices in Mangalore and Gulbarga.

For more efficient Power
Karnataka has the ignominy of having one of the highest transmission and distribution (T&D) losses in the country. We should therefore restructure the existing power generation, transmission and distribution agencies at the State-level and downsize it, to make power supply more efficient. Super thermal projects should be set up to meet the rising demand for power.

Turning around Industry
Govt to establish world-class special economic zones, agri export processing zones, industry parks, industrial clusters, etc.

Upgrade skills and introduce new courses in ITIs to meet the needs of the industry.

Though Karnataka is a global research platform, it is sad to note that Bangalore does not have patents, copyright and other offices dealing with IP issues. The people of Karnataka have to go to Chennai every time since these offices are located there. State Govt to take up the issue of setting up such offices in Bangalore, with the Centre, and provide suitable land and buildings to house these offices.

State Taxes
There is disparity in VAT rates among various States. Industry is looking forward for formulation of the Act, and Rules under Goods and Service Tax to be introduced. Also, a 4% VAT should be levied on industrial inputs.