The Bangalore Chamber of Industry and Commerce (BCIC), in a set of recommendations made to the State government, has said that it must restart the process of partially privatising its public enterprises in phases and professionalise them to re-capture investor interest.

Privatisation or disinvestment will also unlock funds vested in these public assets and send out the right signal for growth, it said.

And, large power distribution utilities need a dash of professionalism, according to the BCIC.

There are around 80 State public sector undertakings (SPSUs) in which the State has cumulatively invested around Rs. 80,000 crore over the years; the successful ones make a profit of over Rs. 1,000 crore a year, according to the website of the State Department of Public Enterprises.

The BCIC has also called for reviving a strong State Planning Commission to plan and steer its economic progress.

The bad news is that Karnataka’s Gross State Domestic Product (GSDP) grew at 6 per cent in the last five years, lower than the national average of 7 per cent as well as those of Andhra Pradesh, Tamil Nadu, Kerala and Maharashtra.

“What is worrying is that the State has lost its growth momentum; rate of decline of poverty in the State is the lowest among the southern States, which is a cause for concern,” BCIC president H.V. Harish said.

The recommendations are aimed at improving the State’s economic and social indicators as well as making it the most industry-friendly State, according to a senior chamber official.

The chamber identifies several weak spots in the State’s growth. Manufacturing sector accounts for 13 per cent of GSDP and there is an over-reliance on the services sector, mainly software. Its share, the BCIC said, had to increase to 15 per cent and push the State’s growth to 12 per cent.

As a solution, the chamber said, “North Karnataka needs to be focussed on to generate inclusive growth. Take advantage of the amendments to Article 371 (J) of the Constitution, which grants special status to six districts in the State, and create incentives for the industry to invest there.”

Stumbling blocks

Listed among the other stumbling blocks are regional imbalance caused by over-focus on Bangalore, inability to develop other urban growth centres, a limp manufacturing sector, poor infrastructure and lack of focus on skill and job development.

Developing smaller cities, perhaps even a new capital, harvesting renewable energy to ease pressure on conventional power supply and an integrated transport information system should be pursued, it said.

It also touches upon school education, vocational training and streamlined land management and use.

The Defence and aerospace industries are core strengths of the State and they must be fully tapped. The State must create the country’s first 3D manufacturing hub, the BCIC said.

Apart from Mr. Harish, chamber’s vice-president A.N. Chandramouli, former senior bureaucrats A. Ravindra and K. Jairaj, and economist S.L. Rao were involved in finalising the recommendations.


  • ‘Professionalise them to re-capture investor interest’

  • Recommendations aimed at improving economic, social indicators: official


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