“On Tuesday, the Karnataka government approved Aequs SEZ Private Limited’s Rs 3540 crore (US$ 483.64 million) investment to establish a cluster of consumer electronics and durable goods (CEDG) in Hubballi, about 430 kilometres from Bengaluru.
At the State High Level Clearance Committee (SHLCC), chaired by the Karnataka chief minister, Mr B S Yediyurappa, the investment was approved.
In line with the Atmanirbhar or self-reliance initiative of Prime Minister Mr Narendra Modi-led Union government, this is India’s first sector-specific investment, the state government and Aequs said.
The investment is expected to create about 20,000 jobs and the company has applied for the allocation and acquisition of 400-acre land in Ittigatti Village in Dharwad by the Karnataka Industrial Area Development Board (KIADB), a senior government official said seeking anonymity.
The planned industrial unit would, as planned, consist of storage facilities, a distribution facility, a skills growth centre and other support services.
In Karnataka, the sealing of the investment comes at a time when the state has been seeking industries and other companies to set up shop in the cash-hungry southern state and help bring in new and much-needed capital inflows to help revive its fledgling finances.
Mr Aravind Melligeri, Chairman & chief executive officer of Aequs Inc said in a statement to Mint, “”CEDG will be globally competitive and a self-sustained ecosystem, generating employment, creating significant opportunities for the region, and nurturing the country’s manufacturing potential. This campus will be spread across 400 acres with benefits of Special Economic Zone (SEZ) and Domestic Tariff Area (DTA)””.
The CEDG is expanding the Aequs footprint in Karnataka, where a production SEZ in Belagavi is already running, as well as a key stakeholder in the growth of the toys cluster in Koppal.
The company has investments in India, the USA and France in precision engineering, aerospace and allied industries.
The distress in Karnataka ‘s economy has been added to by revenue deficiencies due to the reduction in goods and services tax (GST) compensation, financial effect due to covid-19 induced lockdown, heavy rain related damage and other factors. In line with the Bhartiya Janata Party (BJP)-ruled government at the centre, the Karnataka government has proposed changing labour, land and industrial laws to bring in more investors into the country.
According to officials, the SHLCC, held on 30 September, cleared six investment proposals worth around Rs 15,045 crores (US$ 2.06 billion) that have the potential to create 21028 new jobs.
The government of Karnataka is proactively seeking developers, but due to endless delays in clearances and obstacles to land acquisition, it has had trouble converting plans into real investments.
State government data shows that delays in ironing out long winding issues on land availability for industries cost Karnataka an opportunity to transform investments totalling over Rs 39,000 crore (US$ 5.33 billion) and a chance to generate over 80,000 jobs between 2013 and 2019.
Of the total of 142 proposals, totalling Rs 49,379.13 crore (US$ 6.75 billion), approved between 2013 and 2019 pursuant to section 109 of the Karnataka Land Reforms Act for the establishment of new projects or existing manufacturing units in sectors such as automobiles, textiles, mines, among others, over 90 remain non-starters, including 23 which, according to government data, have been fully abandoned.”