OPPOSE AUCTION OF KARNATAKA
Demand People Friendly & Environment Friendly Development
The Chief Minister of Karnataka has announced that the 2 day Global Investors Meet in Bangalore will bring 3 lakh crores of investment as well as around 3 lakh new jobs. The promise of 3 lakh jobs to be created by the GIM and the prosperity it will bring to Karnataka does not appear to be true. Read below to find out the real costs and real facts of the GIM.
False Promise of Investment and Job Creation
As per government data(from Department of Industrial Policy & Promotion, http://dipp.nic.in/fdi_statistics/india_fdi_index.htm ) the total FDI approved in Karnataka between 2000- 2010 is around 30,000 crores and the actual amount invested less than that. So how will 3 lakh crores be realised in 2 days, if the last 10 years brought in only 30,000 crores?
Further , the 3 lakh crores were supposed to bring in 3 lakh jobs. Now if the actual amount will be much lesser, how many jobs actually get created?
Also, here 1 job is being created for an investment of 1 crore (3 lakh crores = 3 lakh jobs)
However, for the same 1 crore which is invested in the small and Medium Industries , 20 jobs can be created.
Examples of Existing Investments and jobs created in Karnataka
The Government has approved MS Zuari fertilisers and chemicals ltd. to establish a urea plant in Mastihole Village, Hukkeri Taluk, Belgaum with an investment of 4565 crores. It is supposed to create1560 jobs. It means an investment of 3 crores for one job! Similarly, the Government has approved a proposal to M/S India Cements limited to establish a 2 MTPA Cement plant and 60 MW coal Based thermal Power plant at Ganapur, Burugupalli of Chincholi Taluk, Gulbarga District with an investment of 850 crores. The promise of job creation is only 175. It means that 5 crores are invested to create one job. (Sources : Government Orders - CI 27 SPI 2010, CI 32 SPI 2010)
Jobs Lost Due to the GIM
The government has already acquired 50000 acres and is in the process of acquiring another 100000 acres. Hence a total of 1,50,000 acres are being acquired. Even by conservative estimates, farming on 1 acre of land can support at least 5 people. Hence the 1,50,000 acres of land being acquired will support atleast 7,50,000 people! Now once this land is acquired, all these jobs are lost. Even assuming that the GIM really creates 3 lakh jobs and that all these jobs(including managers, technical experts etc) are distributed amongst those who lost jobs, it still leaves 4.5 lakh people jobless as a result of the land acquisition for the GIM.
In its defense the government has stated that mostly non-agricultural land has been required. However seeing the gazette notifications for the land acquisition, we see that the government is lying. For instance, one of the Government Orders ( CI66SPQ2010, Bangalore , dated - 17 Feb 2010) says that 1,542 of land has been acquired in Bailahongala, Belgaum. Out of 1,542 acres acquired just 25 acres of land is barren, the remaining 1517 acres or 99.8% land acquired is agricultural land.
What Else are the People of Karnataka Losing?
There is a net loss of employment due to GIM. In addition, we will also lose valuable capital, water and electricity. The 3 lakh crore investment will not come directly from private firms. A large part of that will be from bank loans. Money in the banks consists of the savings of people of the state or is tax money which is with state owned banks. So in effect it our own money being diverted to them and coming back in the form of FDI.
All these industries will require water and electricity. No new water can be created. So even though there is an existing water crisis, Billions of Litres will be divested to these new industries. We also already have an electricity crisis with many rural areas having 16 hour power cuts. Where will we get more power to supply to these industries. It is also a matter of shame that many of these destructive industries are provided massive subsidies of water and electricity, while the farmers in the state are committing suicide.
Karnataka for Auction?
Hence, by organizing the GIM the state government has sold Karnataka, piece by piece. People voted for a government to rule the state, and not sell the state and its resources.The entry of Special Economic Zones will be a major blow to the lands, environment and labour relations of the people of Karnataka. Already Orissa stand as a glaring example for us to understand what is going to happen in the investment friendly states like Karnataka. POSCO and Tatas have been targeted by the activists for their role in police firing and lathi charge on innocent people in Orissa. Over 100 people resisting POSCO in Orissa were injured recently and even their medical care is being denied. Over a dozen people were killed by police firing in Kalinganagar earlier and recently the police killed one more adivasi. We strongly object the entry of such a model of development which sheds human blood instead of human welfare.
If the state of Karnataka Is going ahead with the this kind of a development paradigm at the cost of the life and livelihood of the Dalits , Adivasis and the Farmers , the Global investors meet raises a set of questions like what will be social, environmental, economic and political costs involved in this entire process? Why is this whole process being rushed through without public consultations and political consultations ?
In order to achieve overall inclusive development, we need to look at it from the perspective of increasing the purchasing power of the people of the state. However, these foreign direct investments will actually decrease the purchasing power of the people. Keeping this in mind, people from across the country need to oppose this form of investor led development. We demand that the state works towards a development approach which is based on strengthening local economic systems. The GIM however does not do anything to strengthen the local economic system or the people and hence the government should immediately stop this mode of development. It is the responsibility of all of us, the people of Karnataka to force the government to abandon this destructive mode of development. We appeal to all citizens of Karnataka to join this resistance for a people friendly and environment friendly development policy. Ultimately, it is matter of our jobs, our money, our natural resources and our lives.
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Who is "we"
Some good points, but wanted to ask who is "we" here Vinay. Is this a note from Mr Leo Saldhana?
I do read similar objections from political parties as well. Was wondering if this note is from one of them?
re : who is we?
sorry. forgot to add that bit. this is a statement endorsed by various groups - pedestrain pictures, peoples union for civil liberties karnataka, open space, peoples solidarity concerns bangalore etc. and no, this is not from leo saldhana :-)
the laims of GIM are getting absurder by the day . yesterday murugesh nirani, industries minitser said we'll get 5 lkah crore investment. then katta said we'll get 10 lakh jobs!
ridiculous if you ask me!
Have they (the
Have they (the groups) considered indirect contribution to the economy? An approximate 1:3 (1 directly employed indirectly employs 3) may be a good starting point. Unfortunately, in the current world, industries generate more income (read money) than agriculture, and services generate more income than manufacturing. Also, the knowledge gained in different areas cannot be ignored. A predominently agri-based economy would leave us "behind" scientifically in the long run.
My Assessment of the Statement!!
SB,
You cant understand "we" easily!! Its a complex world of the same individuals in different 'banners'!! The decisions/actions of one group will be in line with that of another 'banner'!! Anyway, let me delve into those!! For now I will believe that Mr. Leo Saldhana has nothing to do - with the 'banners' mentioned i mean!!
(Apologise if I have overshot the comment guidelines, but coulndt resist being a bit tongue-in-cheek!!)
Vinay,
At the outset, I must agree that there are some excellent points and statistics in this joint statement. I must also complement you and the authors for basing the statement on some (though not all) govt statistics.
Below is my assessment of the statement posted above
1. The total investment numbers and employment potential should be taken with a pinch (not 'pinch' but 'tonne', some may argue!!) of salt. Also, we are not sure of the timeline for the proposals to turn into reality. Large investments often take long time to come in.
2. 3 lakh crore of investment and 3 lakh job opportunities translate to a investment of 1crore per job. Its a interesting metric, but
3. Job losses section - Is the statement making an apples to apples comparison? It suggests that 5 people can be supported by one acre of farmland. Is 'support' the same as 'employment'? 3 lakh jobs can actually support 3 lakh families (govt definition of family is over 5 people, but taking avg family size as 3, your job-loss theory falls flat).
Also, it is pretty common knowledge that agriculture is very land-intensive. Industries provide lot more 'employment' with a given amount of land, compared to agriculture.. And that holds good irrespective of which industry one is talking about!!
Now let me assume that one acre of land can support/employ 10 people. The statement estimates 1,50,000 acres to be acquired - a loss of 15 lakh farm jobs. Can these not be accomodated with the 35 lakh jobs to be created?
Would the groups/banners mentioned above also consider the total income per acre of farm land? A farm labourer makes about 30,000 per annum. Contrast this with a unskilled labourer in the industry!! Who has a better quality of life? I am not bringing in the advantages of the organised sector - PF, insurance etc- into the discussion here.
I can keep writing more on this 'statement', and keep going on and on about agriculture ( the contribuition of agriculture to GDP, the income 'shortcomings' despite the 'tall' claims of the establishment on support prices, the need to move a significant portion of the farm-dependant popoulation way from agriculture, smaller landholdings etc). But, I dont see the need when either of us are not interested in heeding to the other or having some degree of flexibility in our opinions!!
There will be lots of negatives in the name of GIM - 'Money changing hands' in the name of ad spends, marketing etc of the event and 'percentage share' for approvals/clearances.
But the positive of the approach taken in this GIM are
-Srivatsava V
Pinch of salt (updated)
The rhetorical note that Vinay has posted makes a good reading. "Auctioning the state", "what are we losing" etc all sounds fine in speeches. "False promises" abound in all areas, whether its GIM or anything else.
Honestly, I would prefer public statements that would show alternative plans on generating employment. Enough of Tata Posco Nano Singur etc. Need solutions, not constant reminders. Educate us on how to get this right, and not on masala worthy news items on how the state crushed the poor or the rich robbed the state.
Having said all of this, few points up there are valid. I am bothered as much on how the environmental clearances and needed resources (water, power) would come fast for all these "investment proposals". We should all be.
But not via notes like this, where the authors seem to be nitpicking on fancy statements attributed to the ministers via media But not their fault. By not providing clear information to public on projects and the mechanism for "clearing " them, more and more "we" are being encouraged to come out with notes like this.
Absurd to oppose
When we have mind-boggling numbers of BPL citizens that are struggling to find opportunities to get them out of their misery, it is sad that some of the more literate who can read, write & are capable of organizing such opposition efforts insist that those deprived would lose out further, including those that are better off who have bank accounts with healthy balances !
The claim that they know what's best for the state by quoting some dubious numbers, not to mention the obvious lack of any rationale in their arguments, is truly absurd, to say the least.
Some fundamental questions that they need to ponder over are:
1) How can poverty be overcome without campaigns & efforts to bring in more jobs into the state ?
2) Is the whole land bank of 1.5 lakh acres really on offer during GIM ? Is this not just a wish list item that the govt is yearning for, for long-term interests of the state with an eye on investments & for development in the future ? And what about the claim that the 3-lakh crores sum is being handed out in just two days ?
3) Haven't we seen many farmers commit suicide due to bankruptcy & is it not possible that many such farmers would be willing to give up farming & their lands for suitable compensations in exchange for possibilities of other better opportunities ?
Perhaps these opposers might serve the community better by scrutinizing the levels of compensation being given to land owners & come up with ways & means by which land owners can be made partners in the various ventures being proposed in GIM. The Orrisa (& Bengal) example support this.
comparing apples and oranges
I also want industries to come to our country and provide employment. But the problem with converting agricultural land to industiral hubs is that the people who lose out on land lose everything. They are not qualified enough to get the jobs in these high tech industries. You should clearly differentiate between those who benifit for this and those who are put to hardship.
@Naveen.
Yes you will give suitable compensation for giving up the land. What next after that? Are these farmers ( at least most of the them especially with small holdings) smart enough to invest this money in anything worthwhile? They will blow it up in no time and will be on streets with in a matter of months.
It is a complicated issue and it would be nice if govt can consider land which is not used for agricultural pupose for industries. I think the stretch between Bangalore and Tumkur is a bit dry and not so suitable for agriculture. We can consider that. First build the infrastructure and then invite people to invest instead of waiting for things to happen by themselves.
@Srinivas
the problem with converting agricultural land to industiral hubs is that the people who lose out on land lose everything. They are not qualified enough to get the jobs in these high tech industries. You should clearly differentiate between those who benifit for this and those who are put to hardship
There is already one successful example in India where the so called unqualified people have become shareholders in developing their lands through partnerships. This is Magarpatta in Pune. Can't this be used as a model for other such ventures with govt support ?
It is a complicated issue ....First build the infrastructure and then invite people to invest instead of waiting for things to happen by themselves
As long as we keep worrying excessively about complications, nothing will ever be resolved. Land is primary for all development including infrastructure. So, how can one expect infrastructure to be developed based on the premise that development will follow at that very spot - we are talking about several hundreds, if not thousands of crores worth of infrastructure here.
If we can emulate
If we can emulate the pune model nothing like it. I am all for it. But just giving away compensation and letting the farmers to fend for themselves is gross injustice and exploitation.
Regarding infrastructure, how did electronic city and ITPL happen? May be they are not very far from city but if we can provide good ( fast and efficient) connectivity then I don't see why it is not possible.
What does 3 lakh crore investment mean?
Indian politicians are stuck between a rock and a hard place - the rock is our massive population and a hard place of sustainable and equitable development. If employment opportunities don't multiply we will face social unrest in 5 or 10 yrs. Some questions however
a. Why do they go after wetlands in their acquisition process?
b. What does 3 lakh crore investment mean and over how many years? Imagine some company sets up a steel plant and invests say Rs.2000 crores. Out of that land is say Rs.100 crores and machinery, building and equipment is the rest. If they import most of the machinery and equipment then the real investment is Rs.100 crores of land and the building. The rest has actually gone to their supplier who could be in Karnataka, outside Karnataka and even outside India.
c. Should they really go for steel plants and the like or for industries that generate maximum employment? Tourism is a better bet (IMHO).
It ultimately boils down to two things
a. How many jobs get created each year? We are adding about 1 million to our population each year.
b. What are the revenues that the government can generate which it can then spend in social sectors.
Srivathsa
Drive safe. It is not just the car maker which can recall its product.
From the july 2000 GIM...
http://www.hinduonnet.com/businessline/2000/06/17/stories/141760s5.htm
Shobha Intercity Technopolis' software technology park for Rs. 2,000 crores, Reliance Industries' proposal to set up an IT park for Rs. 1,600 crores, Enron India's optic fibre network project a t a cost of Rs. 600 crores and Estel Communications's optic fibre network for Rs. 52 crores.
Havent heard of these software parks and projects at all! btw was it the same enron then??
What happened to the planned wind power projects..havent heard/seen anything ! gone with the wind??
The State has also welcomed three wind power projects -- NEPC's 100 MW project in Chitradurga, Bellary, Gadag and Chikmaglur districts for Rs. 450 crores, Induj Enertech's Rs. 25-crore 11.25 MW wind power project, and Suzlon Energy's 100 MW win dmill.
The 2000 GIM was only for 27K cr projects...but wonder how much of it really materialized!
http://www.hinduonnet.com/businessline/2000/07/01/stories/14016033.htm
There will be some good
These projects cannot be opposed due to power shortage. These large projects usually have a small power plant of their own. And besides, there is proposal for investment in power sector also.
Shortage of power is partly due to the people of the state themselves. They have been opposing power plants due to their environmental impact, so the government has to wait till gas is in constant supply and then build gas based power plants. There are plans of 8000 MW of gas based power plants.
Most of these investments are going to come in North Karnataka. Compared to the rest of Karnataka it is not as developed and is an arid region. The farmers are being given a good compensation (based on newspaper reports) and one member of the family gets a job in these projects. This looks like a fair deal. The data on money needed to create one job doesn't make any sense.
Welcome New Investment, but..
Setting up new industry is good as it provides employment ( After providing for adequate compensation to those who are selling their land, One hopes ).,brings in new technology. However, Government should ensure that there is adequate power and water. Part of the investment should be for generation of power which is deficient in the State. Add shortage of water, the problem will become accute.
It is better State doesn't overcrowd Bangalore with more projects . The infrastructure cannot be stretched beyond limits.. The greed will hit the city's quality of life. The Govt. must try and disperse the projects to other districts to ensure statewide harmonious development.
GIM - Comments
But just giving away compensation and letting the farmers to fend for themselves is gross injustice and exploitation
True, no doubt - this was what I mentioned previously. However, no matter how well compensated people in our country are (with cash, jobs, etc), groups of disgruntled elements spring up just about everywhere since the system has been too tolerant, allowing, in fact inviting such clamor. In many cases, opposing politicians align themselves on opposite sides to add to the din & this cacophony continues without end.
Some harsh measures & unpopular decisions are also necessary. Not everything can work out for every group's best interests - public good must always prevail over private interests. Since this hasn't been happening most of the time, we have the situation as it is today, with very poor progress on human development & poverty erradication. In short, with insufficient job creation & severely depriving the many millions from reaching some degree of self sufficiency.
Regarding infrastructure, how did electronic city and ITPL happen? May be they are not very far from city but if we can provide good ( fast and efficient) connectivity then I don't see why it is not possible
Electronic city & ITPL had extremely poor connectivity when they had been started. Only after they became successful were the roads & other infrastructure developed. Whitefield's roads were deplorable even in the late 1990s.
Should they really go for steel plants and the like or for industries that generate maximum employment? Tourism is a better bet (IMHO)
I think core industries (such as cement, steel, power, etc) are the real building blocks for all other industries & businesses. Once these are in place, all other sectors will evolve by themselves since people's affordability will improve with jobs. With these basics in place to meet the demand for supply of materials, other industries can develop much more easily.
Why GIM was required, its Reddy & Mittal Meet
Janardhan's wife has signed 36,000 Crore and Mittal has signed 30,000 in GIM.
When I saw news channel, Janrdhan's wife falling to Chief Minister feet after signing.
In over all, Bellary people are regularising all their acts in the name of GIM.
We did't see Mr Ratan Tata, both Reliance heads, Future Group and non of PSU commiting any big amount.
During Railway budget, & FM budget other states have got Railway Wagon manufacturing, setting up of new plants by PSU.
So now we know whats is this called GIM. We need Private participation, but not the selling state to Reddy & Mittal's
KPCL - the sacrificial goat?
And besides, there is proposal for investment in power sector also.
But, even as new investments into power sector are being attracted through Power Purchase Agreements (PPAs) covered by a three-tier payment security consisting of Letter of Credit, Escrow and State Government guarantee, payments to the are current mainstay of the state, viz government-owned KPCL, are being made in about 13+ months on an average - check this.
Can the company survive this way? What is the rationale behind this 'policy' of the government?
Reddy and use of his chair
A minister, who has iron ore mining interests is certainly using his postion to get a good customer to setup up a facility in his own backyard. There would be certainly be a conflict of interest wherein instead of focusing on his ministry (Tourism), Mr Reddy would be spending more time to generate opportunities for his mining business. His defence though would be that he is doing this to generate jobs for his constituency (Bellary). Fair point that one as well. So the case is sort of 50-50 on whether such use (misuse or abuse, whatever) of his public office to further his business interest is a fair thing or not.
Saw the list of MoUs signed in a newspaper this morning, didn't see anything at all for agri-based or food processing sector. Nothing real for Tourism as well (which tends to be a significant generator of job in the hinterland).
BTW, @Vinay, I did edit my comments above (bad tone, personal attacks in there, regretted. Though I'd still insist that parts of your note are very weak, and I am sure you didn't write those weak parts). But don't mistake me for a GIM supporter or anything like that.
Why do I have to always like or oppose things on blanket basis. The concept of hype, pomp and show to bring the investors is certainly a GOOD ONE. Now, whether they will bring in the right kind of investments, that is to be seen.
So far, not so good. No visible thrust on basic sectors - water, power, education, agri-processing or healthcare. Yeah, we need iron and steel, cement and textile (and the usual IT/BT etc). But real deal is in generating real jobs or infrastructure in the deeper areas of the state. Jury is still out on whether GIM will acheive that.
Let us wait one more week for the hype to clear out. We'd know the real deal by then. If not, RTI is our friend.
And on the side note....
.... as is very typical of our tenacity to make a mess out of even the best of efforts, today's Deccan Herald tells us a story of the mess at the meet.
As SB pointed out The concept of hype, pomp and show to bring the investors is certainly a GOOD ONE. But only if done right, else, it can backfire!
A couple of excerpts:
Chaos is too mild a word to describe the Day One of GIM. Confusion clouded the signing of certain major MoUs.
The worst mess was the media centre. Many computers had no internet facility. Phones would not work. Accoustics for the inaugural function were so bad that delegates and the media could hardly hear what was being said.
The stock reply from government officials was: “We do not know. Somebody else is handling... please wait”
Hope our friends get it right the second day. I'd like to see someone with appropriate event-organization experience going around the hall taking note of such issues, so they can be avoided the next time around.
not again
Its so unfortunate that we fail to analyse the present situation - mainly cause we do not want to acknowledge all our mistakes so far.
'Generating jobs' seems to be the miracle phrase that would shut everybody up. It seems to be the ultimate thing to have irrespective of the huge amouts of pollutants you may get surrounded by, 'jobs' at the cost of food, clean air, the pride of owning a piece of land as against to being slaves to an MNC. 'jobs' only so everybody gets to be a part of the rat race ?. 'Jobs' that discriminate between the educated and the knowledgeable....only generating a whole lot of 'trained' people !
Its our responsibilty to reinstill the faith of the land owners in their land and not lure them into the rat race which is going to lead us nowehere. There are several innovative, truly inspiring ways people are opting for all over the world to become self sufficent and cut off from the corrupt system where the Reddys and Mittals only get richer while they make their loot of the 'natural resources' and then what ? Absolutely barren lands, diseases and many unskilled (talking life skills here) people ?
I think its time we push for self sufficiency rather than depending on the system thats has done a terribly lousy job so far....
There are several
There are several innovative, truly inspiring ways people are opting for all over the world to become self sufficent
Ok since you have thought past Bretton Woods 2010 lets hear where you can create the land, caves & berries for the 270 million working age people that will land up in the next 30 years at your door step.
MOU's details not public?
Actually its not surprising that is the govt not publicizing what it has committed to in the GIM..cos its not for public consumption..
Its because the global in the GIM was a nepa to take further local interests of some local important people..I heard a version on the ground realities..abt the natural resources needed for a steel industry..
When TB dam was commissioned, it was decided according to plan that most part of its water would go to irrigate farms (10L acres), some of it would go to drinking water supply and about 2 TMC would go to industries on the Karnataka side of the border..
One of the first industries to come up in the bellary region was Kirloskar..and then Kalyani..then JSW..these industries needed water and the TB board has alloted water from the 2TMC as below..
Kirloskar : .3 TMC
Kalyani: .5 TMC
JSW : 1.5 TMC
yes it doesnt add up to 2 TMC but ..the extra was taken depriving farmers of water..
Now for Reddy's company water needs..where will it come from?
Lets not even bother abt the needs of Mittal steel..I dont think he will ever step into Bellary at all..he played to the hype BSY's govt created to fly him down here..
Water is just one factor..there are so many..
Bunty sold the Taj Mahal in a movie and these people sell everything and anything in reality !
Veterinary college at Hebbal sold off?
If you go by this report in Indian Express, the Veterinary college on Bellary road between Mekhari Circle and Hebbal has been sold off to a private builder!!
Did a quick look up on google - the company City View Bangalore Private Limited doesnt even have an online presence.
Shouldnt we demand details of all MoUs signed between GoK and various companies during the GIM? RTIs?
Shocked to read abt Hebbal college
There definitely is a need to track all MoUs "signed" at GIM. Who is the nodal department with details of all MoU, is it IDD?
Let us shoot off an RTI straightaway, this week itself.
If GoK is convinced that attracting huge Investments is a good idea, then why not be more transparent about it? Without transparency, you will do nothing but lose support for the expectations you have built va the GIM hype.
Lakshmi Mittal, please step aside!
Although Lakshmi N Mittal, Chairman and CEO of the biggest steel conglomerate, stole the thunder on Thursday morning by signing the first MoU at the Global Investors Meet, the MoU for the highest investment proposal for a single project was by Bramhani Steels.
The company, which is promoted by Minister for Tourism and Infrastructure G Janardhan Reddy, has proposed to establish an integrated steel plant with a capacity of six million tonnes per annum, at a cost of Rs 36,000 crore. Lakshmi Aruna, who is managing director of the company, signed the MoU on behalf of the company.
For the full text in The Hindu, click here
Now, I recall reading in the press that namma Reddygaru presented a Rs 24 cr diamond crown to Lord Venkateswara a few months back. But, I had no inkling that he was on a level with Lakshmi Mittal. I couldn't even locate the Bramhani steels web-site. So, where's this Rs 36,000 cr coming from?
water..wat..water?
Heres the official word:
“The 15.5 tmcft of water is an additional requirement and the option is only to cut down the water supply to irrigation and divert it to the industries,”
http://timesofindia.indiatimes.com/city/bangalore/Can-Almatti-dam-feed-22-new-projects/articleshow/6073033.cms
Its talk about Krishna..what abt TB water for Bellary belt?
They will build ponds? for what?..for fisheries for displaced farmers?
Kempegowda has been attributed to building many lakes in and around Blr but the govt now at best is known for selling off lake beds..tell me one new lake/pond they have constructed/built around Blr?
Kurigalu saar kurigalu!