BENGALURU: Many challenges continue to hinder Karnataka’s competitiveness as a preferred destination for investors, said a leading industrialist. While Karnataka is often lauded for its skilled workforce, strong technology ecosystem and strategic location, the entrepreneur stressed that “ground realities are far less friendly than they appear on paper”.
According to industrialist D Muralidhar, former FKCCI president, the biggest hurdles faced by new investors are land availability and pricing. “Affordable industrial land is scarce and the acquisition process is complicated,” he said, adding that power supply issues too affect industrial operations and investor confidence.
He noted that village panchayat taxes have become a burden for small and medium enterprises, while the overall cost of doing business in and around Bengaluru has risen sharply, making the region less competitive compared to neighbouring states. A key concern, he added, is the “unfriendly attitude of bureaucracy”.
Despite government assurances of reform, new enterprises face procedural delays, lack of clarity and discretionary decision-making, he said. “The ground realities for new investment are very different from what is promised,” he pointed out. Another source explained that red tape and delays are another word for corruption.
The inefficiency of digital systems also drew criticism. “Most digital systems are down most of the time and only certain officials know how to navigate them,” he said, suggesting that it creates room for manipulation.
He said the much-touted ‘single window’ clearance system as “ineffective in practice,” forcing investors to visit multiple departments for approvals. He urged the state to stay one step ahead of Tamil Nadu and Telangana, which are aggressively courting new industries through investor-friendly policies and streamlined processes.
Muralidhar said the creation of a dedicated ministry for investment would help. “Karnataka needs a single, empowered point of accountability who can coordinate across departments and resolve investor issues swiftly,” he said.
