Welcome Address at Vision Suvarna Karnataka 3rd April, 2008 at Raj Bhavan

Excellency Governor Rameshwar Thakur
Shri Krishna Kumar, Advisor to Governor
Shri Sajan Poovayya, Chairman FICCI Karnataka
Dr Amit Mitra Secretary General FICCI
Ladies and Gentlemen:

Good evening and welcome to this FICCI interactive session on Vision for a Suvarna Karnataka organized by FICCI Karnataka. I thank His Excellency the Governor for being here today. He has, in the short stint that he has had as head of administration of our State, already taken many decisions that needed to be taken to address some of the crying problems of the State and our city. He has proved that if there is a willful administration, progress can be made. Thank you Sir.

This was originally intended to be a discussion of the Karnataka Budget 2008 and it turned out that elections were around the corner and so it was decided to make it a broader discussion. Today’s discussion is made even more relevant because it’s clear that over the next 45 days, a new popular government will be governing our State.

As you are aware, it’s almost election season in Delhi as well and what FICCI has set out to do in this election season is to work with various political parties to evolve a common minimum economic agenda. This effort is driven by a belief that, in this age of coalition politics, there tends to be a lot of opposition to ideas and policies for the sake of creating political space and we ought to really ring fence the core economic principles that will deliver growth for the next decade from this form of politicking. Most of us realize and agree today that the pressing problems of poverty and destitution in our country and State can only be effectively solved by ensuring at least a full decade of uninterrupted economic and inclusive growth of 9%+ and therefore it’s in our interest to shape a common minimum economic agenda that ensures this growth, regardless of the other political agendas and conflicts that arise in our democracy.

FICCI believes that the same broad ideas are relevant in our State of Karnataka. Given the polity of Karnataka also fracturing around three established political parties and at least 2 new ones, a coalition type scenario is in the realm of real possibilities. It is safe to say that dis-satisfaction with the direction of current political leadership is very high amongst the very citizens who elect them. An example of this is the fact the almost 60+% of people who polled recently wanted the Governor’s Rule to continue instead of a popular government. There is clearly something wrong with this picture. The demographics of our State as in our country is pointing to a younger and more impatient population – that is increasingly unforgiving and impatient to the old style of politics – People want solutions today, to today’s problems, and are not prepared to be silent and wait.

In a nutshell, let me give my assessment of where we are at, as a State and City. A more detailed presentation will be made by Dr Amit Mitra.

• For a State that prided itself in solid growth and social indicators for the best part of 4 decades after independence, relative to its peers – our performance in recent years has been very disappointing. Growth in Karnataka has tapered off and stalled over the last 4 to 5 years.
• The Economy has been allowed to and has become dangerously uni-dimensional and over dependent on IT and off shoring and is vulnerable going forward to global trends in this sector.
• The growth and economic progress has not been inclusive with a large part of the State’s population and economy affected as a consequence of the Agricultural economy shrinking.
• 25% of the State still lives below poverty line and our State is lagging behind most other developed States. in terms of social indicators like Primary Education, Health etc.
• The demographics show that population is getting younger and more impatient with the slow pace of change and governance.
• Bengaluru, our capital city and the gateway to Karnataka, has progressively and surely gone into a slow spiral decay from being an overcrowded town to one that represents full blown urban chaos, despite the fact that Bengaluru alone contributes to almost Rs 11500 crores in Income tax revenues to the Centre.
• The Urban poor are being almost totally left out of the governance and planning process and growth equation is being tended to a large extent, only by NGOs and other concerned organizations.

In the recent debate in the Parliament, the Finance Minister responding to me, made two important points. That money is not the issue that is causing us to fall behind on areas like poverty, education, health. He said it was mal-governance by the States, in terms of delivery of the various programs and funds. On another occasion during the Karnataka Budget debate, when I asked for a special status for Bengaluru and more significant funding for our City – He said essentially the same thing? How will the city use this additional money because existing delivery and execution mechanisms cannot handle this? These are both issues that citizens of Karnataka and Bengaluru have to work on to get the answers from the people wishing to govern us.

Given that most of us are unhappy with the way things are going and want change – we believe the first step is to define the agenda for our Political parties. I am a believer that in a democracy like ours change can come about in the lives of the citizens only if there is a change in the hearts and minds of our Political leadership. It is FICCI’s endeavor to work with Media, RWAs, citizens and citizen organization to target this change in the hearts and minds of the Political leadership of various parties and create an agenda which is the agenda of the people of Karnataka for the future of our State.

What is the Economic agenda that we propose?

The agenda starts with two fundamental objectives which are achievable and we must insist on –

1. Karnataka will be a full developed State by 2015 with most progress in the next 5 years – which is 7 years or 1 and half terms of governance.
2. Karnataka to have a 10+% growth for this duration of 7 years, which will make it a $150 Billion dollar economy (Rs 6 Lakhs Crores) by 2015.

To achieve this goal, Political parties and leaderships must agree on the following 5 point agenda

1. Diversify and broad base the Economy and focus on other areas to develop create the catalysts for investments in these new areas.
2. Revive the Agricultural Economy
3. Improve economic governance and efficiency of government spending in targeting the rural and the urban poor.
4. Revamp institutions that deal with Government delivery of services
5. Develop Bengaluru - the gateway of Karnataka, into a modern City with a totally new governance model that will create an institutional space for its RWAs and do the same for all other Tier II cities as well.

We have deliberately and consciously focused on and suggested these building block issues. Because we believe that if we can get acceptance by one or two political parties of these fundamental issues of principles, then the micro solutions will evolve. Essentially, where there is a will there will be a way and our objective is to generate that political will around these issues.

Our early engagements with the Political leadership and thinking people within the parties have been positive. The idea is that, after today, there will be further momentum, driven largely by all of you, civil society and the media, to which FICCI can be a facilitator and can provide logistical support.

I thank you for your attention and look forward to your active participation in shaping the agenda for our State and City over the next 45 days.

Thank you and Jai Hind.