Half of Rs 10 lakh cr investments in Karnataka non-starters

Mangaloretoday/ PTI

Bangalore, Apr 14, 2012: As much as 43 per cent of Rs 10 lakh crore investments in about 1,624 projects in Karnataka remain non-starters, Assocham today said.

The study by the apex industry body said almost 57 per cent of projects under implementation are at the MoU stage and a lot more needs to be done to facilitate them.

With a share of over Rs 3.84 lakh crore, manufacturing sector accounts for the lion’s share of 39 per cent of total live investments.

This is followed by services (24.6 per cent), real estate (15.2 per cent) and electricity (14.1 per cent), the strategy paper titled ’Achieving Higher Growth in Karnataka’ released by it said.

It was jointly released by Ravi Sanareddy, J Crasta, chairman and co-chairman, Assocham Southern Regional Council and national secretary general of the organisation D S Rawat.
"...Karnataka accounted for 7.1 per cent of total investments made by both government and private sectors in India as on December 2011," the study said.

While the private sector contributed about 55 per cent of total investments, the government accounted for the remaining 45 per cent, according to the strategy paper.
Having grown at a Compounded Annual Growth Rate (CAGR) of about 8.41 per cent between 2004-05 and 2009-10, the State Domestic Product (SDP) grew from over Rs 166 lakh crore to over Rs 249 lakh crore during the period, it said.

The state, however, lags behind Andhra Pradesh (8.7 per cent), Kerala (8.7 per cent) and Tamil Nadu (9.7 per cent) in terms of growth rate during the period under review.

The services sector accounted for over 55 per cent of SDP of Karnataka in 2009-10, clocking a CAGR of over 10 per cent during the course of five years, Assocham paper said.
Besides, agriculture and allied activities contributed about 15 per cent of State Gross Domestic Product (SGDP), registering a CAGR of about four per cent, while industrial sector accounted for over 28 per cent and expanded by over eight per cent CAGR.