The State government’s move to enhance the investment limit for industrial projects that are cleared by the Single Window Clearance Committee (SWCC) is likely to increase the clout of Minister for Large and Medium Industries Murugesh R. Nirani, who chairs the committee, industry sources told The Hindu on Friday. The proposal to increase the limit from the current level of Rs. 50 crore to Rs. 250 crore will require amendments to rules under the Karnataka Industries Act and will have to be approved by the Cabinet said a senior government official. Projects with a ticket size of more than Rs. 250 crore will be cleared by the State High-Level Clearance Committee (SHLCC), which is chaired by the Chief Minister.
Although industry sources welcomed the move, they were sceptical that this alone will result in investments flowing into industrial projects in the State. A senior official of a prominent industry lobby, who did not wish to be identified, said the decision to confer greater powers on Mr. Nirani is “evidently aimed at bolstering support for a government that is widely perceived to be unstable”.
A misnomer
L. Krishnan, Chairman of the Karnataka State Council of the Confederation of Indian Industry, said the single window is a misnomer because even after industrial projects are cleared by the SWCC, prospective investors have to approach multiple government departments for clearances. “The clearance by the SWCC is only the passport, investors still have to get all the other visas,” he remarked.
Although Mr. Krishnan described the move as a “step in the right direction”, he said it may not result in a flood of investments. He said the overall sluggish industrial climate in the country is not conducive to capital expenditures by companies. However, H.V. Harish, Senior Vice-President, Bangalore Chamber of Industry and Commerce, was more hopeful that investments may be spurred by the decision. A senior official of a leading multinational company, however, who mentioned the “tardy progress” of industrial projects that were announced amidst great fanfare at the Global Investors’ Meet in June 2012, was sceptical about the planned move. “Merely clearing more projects will not result in industrialisation,” he remarked, referring to the investment proposals worth more than Rs. 8 lakh crore at GIM 2012.
