Getting land in Karnataka is industry’s biggest issue
Jul 26, 2013
Source : The Times of India


BANGALORE: A big industrialist who is trying to establish a thermal power plant in north Karnataka says that after numerous personal visits to the area over two-three years, he has managed to get consent from farmers to acquire about 150 acres.

“I have scaled down the size of my project because I’m unable to get the amount of land I need. But I still require another at least 60 acres, which the government has agreed to acquire. I have been running behind that for a year, but not even a preliminary notification for land acquisition has been issued,” says the industrialist, who doesn’t want to be named.

For medium and large industry, Karnataka today is an inhospitable state, thanks to hurdles in the way of land acquisition. Posco’s exit from its proposed Rs 32,000-crore steel project, and Zuari shelving its Rs 5,000-crore urea project, are reflections of that. Both companies said land acquisition for their projects had gone nowhere.

There also have been instances like Infosys struggling for years to get 300 acres near Sarjapur Road, leading eventually to its employee strength IN Pune growing almost to the size of its Bangalore one.

“Land acquisition for medium and large-scale projects in Karnataka is one of the most cumbersome, time-consuming, expensive and frustrating processes,” says R C Purohit, director in the Bhoruka Group. Once a project is approved, a government order is issued, but there is no time limit for the formalities to be completed by KIADB (the land-acquisition body) and other authorities.

“It depends on the efficiency, or the sources and resources of the entrepreneur to get the process completed,” he adds.

Ficci president Naina Lal Kidwai on July 22 said that land acquisition for industrial projects is increasingly becoming a challenging task in Karnataka and noted that the state’s single-window clearance facility has to go a long way to make it as effective as in Rajasthan and Andhra Pradesh.

Karnataka Udyog Mitra managing director H V Raghuram insists the problem is exaggerated and points to the acquisition and allotment of land to industry in areas like Narasapura and Harohalli.

But industry analysts point out that most of this allotment is to small industries that need 5 to 10 acres. Here, too, there’s a big problem. Many allotments are to influential people whose only intent is to sell the land later at a higher price. The Karnataka chief minister recently established a land audit committee to go into the genuineness of applicants. It remains to be seen how effective it is.

The CM told TOI that the government had handed over 2,000 acres of land in Bellary district to global steel giant ArcelorMittal for a Rs 30,000-crore project. But the company had wanted 4,800 acres as per an MoU signed at the Global Investors Meet (GIM) in 2010. It has taken three years since then to obtain less than half of that.

An entrepreneur said farmers today often expect unreasonable rates for land. “What’s worse, local politicians invariably get into the negotiations and drive the prices up.”

The Zuari project, from its inception, faced problems from a motley group of farmers, egged on by local politicians. Basavaraj Javali, president, Belgaum Small-Scale Industries Association, said the association tried for a settlement with the politicians, “but the demand was so high that the company did not accept it”.

Many applaud the efforts of industry secretary M N Vidyashankar and commissioner for industrial development Maheshwar Rao. “But the problem is the system of approvals down the line. The least the government can do is to find a way to make these approvals time-bound,” says an industrialist.

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