The BS Yeddyurappa government in Karnataka proudly took out full page adverts in national dailies recently to announce that its investor jamboree had resulted in mind boggling new investment proposals worth Rs 473,000 crore. Some 350 companies—global and local—including the likes of Lakshmi Mittal’s Arcelor Mittal and Korean steel giant Posco, we are told, signed memoranda of understanding (MoUs) with the government. State governments organising ‘global investor meets’ has become part and parcel of competitive politics. But a closer examination of the tall claims made by chief ministers would show that most of it is plain bluster. If the previous such gala event, held in Karnataka by then Congress CM SM Krishna back in May 2000 (drawing Rs 27,700 crore) is any indication, not even a third of the proposed investments will materialise. In 2009, Gujarat CM Narendra Modi’s Vibrant Gujarat global investors summit claimed to have attracted potential investment of Rs 350,000 crore. How much will happen? In Karnataka’s case, Arcelor Mittal, Posco and the Reddy family concern Brahmani Steel are promising massive investments in steel plants, on the back of huge iron-ore deposits in the Bellary region. The Reddys are keen to plough in Rs 36,000 crore for a six-million tonne steel plant, while Mittal’s idea is a mega power project worth Rs 30,000 crore. The affection showered on Mittal and Posco is a clear sign that Karnataka wants to become an opportunistic steel mega-hub, given the hurdles faced by steelmakers in other mineral-rich states such as Orissa and Jharkhand. Despite the euphoria of record MoUs, apprehensions arise from Karnataka’s poor track record in implementing projects. Government excuses range from investors ditching them to the Y2K scare and global recession.
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