A large number of MoUs are expected to be signed during GIM 2012 in the micro, small and medium enterprises (MSME) sector. At least 300 MoUs were mobilised during the road shows held in different parts of the world, says Industries Minister Murugesh Nirani.
But even as the State government proclaims that the MSME sector will be under special focus this time, trade bodies and MSME entrepreneurs who signed MoUs during the last GIM, sound apprehensive. The reason? The government is yet to allot land for the smaller projects cleared in 2010, even though the Karnataka Industrial Area Development Board (KIADB) boasts of possessing 40,000 acres in its land bank.
Says an aggrieved investor on condition of anonymity, “My project was cleared in GIM 2010. As per the rule, I deposited Rs 60 lakh (20 per cent of the land value) with KIADB towards purchase of land. However, the government has not allotted any land to date, as it seems to prefer big investors. Many big investors have been allotted land for housing projects before me, though I top the seniority list for land allotment as I paid the deposit much prior to them.”
The State government insists that it has identified 1.19 lakh acres (of which 40,000 acres has already been notified) and investors have deposited Rs 1,200 crore with KIADB for purchase of land. Says D. Muralidhar, past president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), “GIM is welcome as it works as a catalyst to bring about change in policies and helps fine-tune the system to encourage industries. The MSME projects don’t take off because they need small expanses of land – two to five acres - which the government is unable to provide. The industrial demand for land is growing much faster than the government’s process of land acquisition and allotment. This is paving the way for red-tape and land hoarding.”
Mooting reforms ahead of GIM 2012, potential investors in the MSME sector are demanding land on priority. “Proper scrutiny of fake project reports will ward off land hoarders, while provisions to allot land to a cluster of MSME projects and simplification of the process to give clearances and land will help encourage entrepreneurship and generate employment. The single window system should function like a single window to begin with. Udyog Mitra should be pro-active not only during GIM but throughout the project implementation process,” says a representative of the trade bodies.