Karnataka unveils aerospace policy

Phase I likely to generate 40,000 jobs, Phase II 60,000

Chief Minister Jagadish Shettar unveiled the State government’s Aerospace Policy, the first such policy statement in the country, at Aero India 2013 on Wednesday. Recognising that the expenditure on aerospace and defence equipment in the next 10 years is to amount more than Rs. 5 lakh crore, the policy aims to develop Karnataka as a hub for the aerospace industry.

A Government Order issued on Wednesday stated that the “mission” to develop the State as a hub would be undertaken in two phases. The first phase would be from 2013-18 and the second from 2018 to 2023. The State hopes to attract investment amounting to Rs. 24,000 crore in the first phase and Rs.36,000 crore in the second phase. About 40,000 persons are likely to get employment in Phase I and 60,000 in Phase II.

The policy envisages the establishment of clusters in the south, central and northern regions of the State. It is to provide subsidies to units investing in these regions, subject to a maximum of Rs. 50 crore.

The policy aims to support small industries in order to enable them to enhance value addition, especially at the lower end of the supply chain. It hopes to explore new overseas markets and adopt the PPP model to develop the infrastructure for the industry. It also lays emphasis on the development of the Maintenance, Repair and Overhaul (MRO) segment of the aerospace industry.

The policy aims to establish an aerospace university and a flying school. These will be joint ventures with private investors.

Naresh Palta, CEO, Maini Aerospace and Defence, told

The Hindu the policy would help the industry. “The policy framework establishes a platform for exponential growth of the industry in the State.”

Asked why the proposal made by industry bodies with great fanfare during the last edition of the air show to establish an aerospace university had failed to take off, Mr. Palta said: “There was no concerted effort by the various stakeholders — educational institutions, the government and industry — to establish a university that would address the shortage of skills.”

He also warned that industry would be shortsighted if it used defence offsets only for short-term revenues instead of using them as stepping stone for value addition. “Offsets are only a driver, they are not the vehicle for growth in the long term,” he remarked.