In Karnataka, skirmishes affect businesses

Recent communal flare-ups could dent business and investment in Karnataka 

Updated - April 13, 2022 12:16 am IST

Published - April 13, 2022 12:15 am IST

A video grab of a Muslim vendor’s stall, located on the premises of a temple, after it was vandalised, in Dharwad, Karnataka.

A video grab of a Muslim vendor’s stall, located on the premises of a temple, after it was vandalised, in Dharwad, Karnataka. | Photo Credit: Special Arrangement

Even as Karnataka has set itself an ambitious target to contribute 50% to the country’s total IT business, expected to reach $350 billion in 2026 as per Nasscom, and to take its bio-economy to $50 billion by 2025, the State has attracted some unwanted global attention due to communal disturbances, with the government seen as doing too little to stem them.

Known as India’s Silicon Valley, Bengaluru is a melting pot of cultures and has one of the largest tech talent pools in India. This brand value is perceived as getting dented owing to the recent communal skirmishes.

Alarmed by the controversies about wearing hijabs in classrooms, the sale of halal meat, and the drive to evict Muslim traders from temple premises, and their possible impact on Karnataka’s global standing in business and technology, Biocon Chairperson Kiran Mazumdar-Shaw called on Chief Minister Basavaraj Bommai to “resolve the growing religious divide”. Tagging the Chief Minister, Ms. Shaw tweeted, “Karnataka had always forged inclusive economic development... If ITBT became communal, it would destroy our global leadership”.

Though others from the tech and business community have not been as open, many have similar concerns and lament that the ruling dispensation has no grip on the situation. This, they feel, could seriously erode the State’s image if the situation is not controlled. Many say that Karnataka’s IT sector, though well incentivised, grew with minimal intervention of the political class over the last three decades and it cannot be “sacrificed” at the altar of vote bank politics.

While Mr. Bommai responded to Ms. Shaw’s tweet saying things could be resolved through dialogue, the national convener of the IT cell of the BJP, Amit Malviya, called Ms. Shaw’s tweet a “personal, politically coloured opinion” which was “conflated... with India’s leadership in the ITBT sector.” Soon after, Tamil Nadu Finance Minister Palanivel Thiagarajan said his government would welcome companies who want to leave Karnataka due to the rising communal tensions there.

These developments came within days of a startup founder, Ravish Naresh, expressing disenchantment on Twitter about Bengaluru’s crumbling public infrastructure. Telangana’s IT Minister K. Taraka Rama Rao responded to that tweet by publicly courting the startups of Karnataka. He said that Hyderabad would offer better infrastructure and a better social and physical environment than Bengaluru.

Industry observers feel that a myopic political and communal worldview in Karnataka could cost the State businesses and industries at a time when the world is trying to be less dependent on Chinese merchandise. Though no MNC has flagged the issues of prejudice and polarisation so far, many of them may weigh their options if things are allowed to go out of control.

The government has responded to these developments saying Bengaluru and Karnataka’s standing cannot be shaken by these incidents or by the invitations by other States. Mr. Bommai said Karnataka cannot be compared with any other State and invitations by other States only show their “desperation.” Karnataka’s IT Minister C.N. Ashwath Narayan said Karnataka’s brand image cannot be judged by its roads alone and the State is ahead of other States in Foreign Direct Investment, which is proof of its firm standing. While this confidence may not be unfounded, it is beyond dispute that the law-and-order situation of any State is closely linked to its business ecosystem. Karnataka is a magnet for tech companies and startups for many reasons, but one of the key reasons is that it is known as a peaceful State and Bengaluru enjoys the image of being the world’s fastest growing tech hub.

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