Bengaluru: The Karnataka government Friday said it signed MoUs valued at over Rs 6.23 lakh crore during the three-day Global Investors Meet (GIM-2025) in Bengaluru, taking the total investment in this edition of the biennial event to Rs 10.27 lakh crore. The sum includes investment commitments worth over Rs 4.03 lakh crore made over the past year.
Renewable energy accounted for investment commitments valued at Rs 4,25,781 crore, followed by core manufacturing (Rs 1,59,843 crore), sunrise sectors (1,38,993 crore) and startup capital (Rs 89,868 crore).
The quantum of investment put to rest criticism from various quarters about Karnataka’s conspicuous absence from the World Economic Forum (WEF) in Davos last month.
M.B. Patil, Karnataka’s minister for large & medium industries, told the media that the total investment has the potential to create 6 lakh new jobs and the GIM itself was a culmination of the state’s efforts such as holding of roadshows and investor meets across the world.
“To bring in investment, it takes its own time. Investment realisation may take two years’ time also, some may take longer,” Patil said, adding that he would like to convert or realise around 70 percent of the investments this time.
Karnataka’s ability to convert interest into investment has in the past come under question. If government data is anything to go by, at best, Karnataka will be able to convert around half of the total investment commitments. There have also been years when it was able to convert less than 10 percent of all MoUs signed into actual projects.
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‘Can’t say no to MoUs’
In November 2022, then CM Basavaraj Bommai made a startling claim while delivering the valedictory speech at the GIM. According to him, in the first GIM in 2000, Rs 27,057 crore worth of MoUs were signed but only Rs 12,000 crore, less than half, were actually realised.
In 2010, of Rs 3.94 lakh crore worth of MoUs signed, only 14 percent were realised.
Under the second Bharatiya Janata Party (BJP) government in the state in 2012, only 9 percent of 6.77 lakh crore worth of MoUs signed that year were realised. At the time, investors had dropped 58 percent of the projects signed. In his response to the assembly in 2015, R.V. Deshpande, then industries minister, himself said that less than 15 percent of projects cleared by the state over the last seven years saw the light of day.
In 2022, Bommai said: “No government will reveal these figures. I want to bring transparency and I want to be honest to my people and all the investors. This time, already signed is Rs 9.8 lakh crore (worth of MoUs), out of which everything cleared, projects cleared are Rs 2.83 lakh crore… 29 percent has been cleared.”
But his own government, between 2021 and 2023, was not able to convert several of the MoUs signed. In 2022, the biggest investments were commitments of Rs 2.4 lakh crore for setting up of green hydrogen plants in Karnataka. Most of these have now been scrapped.
“We had signed Rs 2.4 lakh crore in green hydrogen, we didn’t have infrastructure. Out of Rs 2.4 lakh crore, Rs 2 lakh crore was almost lost. But at the time of signing an MoU, we can’t say no,” Patil said.
According to government data, out of 142 proposals totalling Rs 49,379.13 crore approved between 2013 and 2019 under Section 109 of the Karnataka Land Reforms Act, more than 90 proposals remain non-starters. These include 23 that have been dropped completely.
Delay in resolving land issues cost the state a chance to create 80,000 jobs, data shows.
Losing out
This GIM, Karnataka has announced a new Clean Mobility Policy 2025-30 with the aim to attract Rs 50,000 crore in investment across the rapidly-evolving and fast-growing space.
Swedish automobile maker Volvo has also announced to invest Rs 1,400 crore for manufacture of EV trucks in Karnataka, and automobile giant Honda has signed a deal of Rs 600 crore for manufacture of EV two-wheelers. But Karnataka has previously lost out on high-profile companies willing to move elsewhere for better prospects.
Electric two-wheeler maker Ather opened its third plant in Maharashtra and in 2020, Bengaluru-based mobility startup Ola announced investment of Rs 2,400 crore in neighbouring Tamil Nadu. There are several such instances where big-ticket investment commitments have not moved beyond approvals and announcements.
In December 2020, the then BJP government-led state high level clearance committee approved three investment proposals, two by Elest Private Ltd—of Rs 14,255 crore and Rs 6,339 crore—and a Rs 1,825-crore project by Hyunet Private ltd. The first two were floated by an individual under investigation for alleged tax fraud. He had no funds and after signing the MoU was planning to raise money for the multi-billion-dollar project.
Similarly, Gali Janardhana Reddy, mining baron and former tourism minister of Karnataka, signed a Rs 36,000 crore MoU to set up a steel plant in Ballari. Reddy-led Brahmani Industries Karnataka Limited had pipped the likes of steel tycoon Lakshmi Mittal to sign the biggest MoU in the 2010 edition of GIM. Both Reddy’s and Mittal’s projects never took off.
(Edited by Nida Fatima Siddiqui)
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