Karnataka's aerospace policy awaits Cabinet nod

The Karnataka government has finalised its much-awaited aerospace policy and the cabinet clearance is awaited. Through this policy the state government is looking at attracting $10 billion (Rs 55,000 crore) investment in the next 10 years and make Bangalore a major aerospace hub in South Asia.

“The policy draft was circulated to the stakeholders earlier this year and we have now fine tuned it. It is currently before the state cabinet for final approval,” M Maheshwar Rao, commissioner, department of commerce and industries said.

The new policy will be in place for a period of 10 years starting 2012. During the first phase of (2012-17), the state government is looking at attracting $4 billion investment into the sector. During the second phase (2017-22), it plans to attract another $6 billion worth of investment in the aerospace sector, the policy draft said. It also envisages creation of jobs for about 100,000 persons during this period.

The policy is likely to be announced in January 2013, a few days ahead of the forth coming Aero India 2013, the premier defence aviation industry exhibition in Bangalore.

The policy is aimed at increasing the contribution of Aerospace sector towards enhancing the share of industry in the State’s GDP from 28 per cent to 30 per cent in the first phase and to 32 per cent in the second phase.

Other main objectives of the policy are to make Karnataka a preferred global destination for manufacturing of aircraft, aircraft systems and sub-systems, assemblies and components. It is aimed at making Bangalore a magnet for global Tier-I suppliers and promote the state as one of the leading MRO hubs in Asia. Strengthening of R&D infrastructure for achieving innovative and cutting edge technologies.

Karnataka is already home to India’s aerospace industry. As early as 1940, India’s premier aerospace establishment, Hindustan Aeronautics Limited (HAL) started its activities in Bangalore. Other public sector undertakings like Bharat Electronics Limited, NAL, DRDO, ADA, ADE, ISRO among others are present in the city.

“Karnataka intends to take advantage of the promising scenario and strive to project the state as the aerospace hub for Asia in the next five years and as one of the top global aerospace and MRO destinations by 2022,” the draft Aerospace Policy document said.

The policy has been formulated through extensive consultation process with industry associations, trade bodies, related government departments, organizations and other stakeholders. The Aerospace Core Group committee constituted by the government of Karnataka also discussed the policy framework. The Confederation of Indian Industry (CII) and PwC offered suggestions.

Aerospace infrastructure shall include both new establishment, modernization of existing facilities, maintenance, repair and overhaul (MRO), testing facilities, laboratories, storage hubs and silos, warehouses, common technical and service centers, aerospace SEZs among others.

As part of its efforts to promote aerospace industry in the state, the Karnataka government has already earmarked 1,000 acres for Bangalore Aerospace SEZ and Park near the Bangalore international airport at Devanahalli. Already, land has been allotted to 27 companies including HAL, BEML, and Dynamatic Technologies among others.

Aerospace majors such as Boeing, Airbus, Bombardier and Embraer have evinced interest to take up space for setting up their India facilities in Bangalore. The park has potential to emerge as an aerospace industry cluster with an ecosystem to generate direct jobs to 242,000 people and house domestic and overseas firms in an integrated space with required infrastructure facilities.

Karnataka also proposes to establish a new Aerospace University in the state in association with a suitable knowledge partner. It is also proposed to have a flying training school to be located within the campus. The university and the flying school will be set up as a joint venture between the state and interested investors. It is also proposed to infuse capital into innovative ventures by creating an Aerospace Venture Capital Fund with a corpus of Rs 200 crore with participation of government (to the extent of Rs 50 crore), financial institutions and other investors.

It’s curtains for Pallavi theatre

Multiplex effect

Another Bangalore landmark is set to vanish. The 36-year-old Pallavi theatre, located across the street from the Kanteerava Indoor Stadium, will be brought down soon.

Since 1976, the theatre has long regaled Telugu moviegoers and will have its last screening on December 26. The building will make way for a 10-storey superspeciality hospital.

Hari Kumar, a staff member at the theatre, cited financial problems and a change in the taste of cinema audience as the reason for the closure. “The cinema-viewing culture in urban areas has undergone a drastic change. People are overawed by luxury theatres housed in shopping malls, which offer more than just movies. It has become difficult to fill all the 1,211 seats in our theatre. While we get viewers in the first week of any release, the number dwindles in the following weeks. Because of this, the management has decided to close down the theatre,” he said.

Reinvention

With the rise of multiplexes, standalone theatre owners have had to reinvent themselves or face extinction. Although several iconic theatres - Lido, Rex, Majestic and Kalpana, to name a few - still remain, by and large many of the old theatres have faded into history. 

Many standalone theatres have transformed into multiplexes to keep pace with the competition. Other theatres like Santosh, Nartaki and Sapna on KG Road whose land lease expires in 2013 are set to become multiplexes. 

“This has been the phenomenon in the last decade. The new concept of shopping and entertainment under one roof and the weekend culture has taken us by storm. Even people from Ramanagar and other semi-urban areas spend time at shopping malls and watch movies. We have to see this in the larger context of the development model and the ethos that it evokes in our society,” says B Suresh, director of Kannada films.

“One of the best things that the multiplex has done to films is that it has killed the hero and has given space for experimentation.”

K V Chandrashekar, owner of Veeresh Cinemas, said multiplexes have democratised film exhibition in the City. 

“Earlier theatres were concentrated in the Majestic area. They were only a few which we used to call suburban theatres, but now there are some 198 screens in the City, with films now being screened in Vijaynagar, Jayanagar, Bana*shankari, Jalahalli, Marathalli, Koramangala – areas which never had theatres earlier. Standalone cinemas that stood regally in the central business district are facing a shortage of audiences as cinephiles now have access to a screen closer home,” he said.

Subsidised tickets

Many cinegoers, however, complain about the high ticket prices at multiplexes and feel that such theatres will never be accessible to low-income groups. The average ticket price at a standalone cinema house is Rs 50, while it is at least Rs 150 at a multiplex. One way to redress these odds is to look at Tamil Nadu as an example, explained B Suresh.

At subsidised rates

“The Tamil Nadu government has decreed that 25 per cent of the seats at these multiplexes must be available at subsidised rates. Everyone would go to multiplexes if the same rule is followed in Karnataka,” Suresh said.

Recently, the Karnataka Film Chamber of Commerce tried to control the ticket fares at multiplexes, stating that it should be no more than Rs 20. Resistance from the multiplex lobby, however, resulted in a stay order on the proposal from the Competition Commission of India.

Bangalore ranked third in job generation in 2012

The year 2012 saw a 21 per cent decline in job generation in various sectors across India.

Bangalore ranked third among major cities as over 75,000 jobs were generated between January 1 and December 15, 2012, according to an analysis carried out by Associated Chambers of Commerce and Industry of India (Assocham).

The National Capital Region (NCR) topped the country as over 1.1 lakh jobs were generated during the period followed by Mumbai with over 77,000 jobs. Chennai secured the fourth place by generating over 44,000 jobs.

The least number of jobs were generated in Kolkata (over 25,000) among the top five metros, said D.S. Rawat, secretary-general, Assocham.

Over 5.3 lakh jobs were generated during the period across India. The first half of the year saw over 2.8 lakh jobs generated, said a survey, ‘Job trends across India in 2012’.

Assocham sourced its inputs primarily from data tracked on a daily basis for vacancies posted by about 4,000 companies in job portals such as timesjobs.com, naukari.com, monster.com and shine.com and job-related advertisements published in national and regional newspapers for 56 cities and 32 sectors. Information technology (IT) sector topped the list by generating over 2.1 lakh jobs in the country. Academics and education ranked second with over 34,500 jobs followed by insurance (over 27,100), banking (24,500), automobile (22,890), financial services (22,500), manufacturing (20,400), engineering (18,650), hospitality (16,100) and IT hardware (15,600 jobs).

Academics and education sectors registered a 16 per cent growth in job generation in the first six months of 2012.

The aviation sector registered a job generation growth of over 78 per cent in the second half of the year (till December 15) followed by sports (41 per cent) and retail (6 per cent).

In Delhi, the telecom sector generated maximum employment opportunities with over 53,000 jobs followed by IT (over 11,000 jobs), hospitality, manufacturing, architecture, infrastructure, textile, banking, real estate and gems and jewellery.

Assocham analysis shows that job market has slightly recovered in the last six months as employment generation growth declined by about 15 per cent between July and December 15 while the decline was by over 25 per cent during the first six months of the year.

Wipro plans to build its biggest campus near Bangalore

At a time when shaky global economic cues have pushed most companies to postpone real estate investments, India's third-largest software exporter Wipro BSE -1.65 % is finalizing plans to build its largest campus that can house at least 30,000 employees in Bangalore.

The new campus, whose first phase is expected to have a built up space of 2.5 million square feet, will come up on a 50-acre plot that is 4 km away from its existing 1.9 million sq ft campus in Sarjapur, on the outskirts of Bangalore.

This will be in addition to Wipro's existing campuses across the country and is not aimed at consolidating operations. Currently, the software major's headcount stands at about 138,000 employees. "We are currently in the process of finalising the master plan for the new campus," said Hariprasad Hegde, vice-president and global head of operations at Wipro. He did not provide details on the developer of the project or how much it would cost.

The Sarjapur facility -the largest for the company so far - accommodates nearly 31,000 employees.

The proposal to develop an additional campus was pending for sometime due to issues with land approvals. However, these have now been sorted out and the company has received the go-ahead for the project. Wipro is currently working with architects on the master plan.

Software biggies have been investing in new development centers to cater to future growth even though the current industry situation is not encouraging. In October, India's largest software exporter Tata Consultancy Services BSE  -1.25 %  also announced plans to build a 1.5 million sq ft facility in Indore.

For Wipro, which added 13,000 employees last fiscal, the hiring pace has slowed down this year as the employee churn has stabilized. In November, software body Nasscom said the industry's growth target for the year to March 2013 would be at the lower end of the 11-14% range it forecast earlier.

Last year, the sector grew a little over 16% to touch $70 billion (about Rs 3.85 lakh crore) in exports. Faced with tough macro-economic situations in the US and Europe, large corporations there have been delaying technology spending.

Revenue from the US and Europe together make up over 80% of the revenue for Indian IT services companies. On Tuesday, shares of Wipro closed at Rs 388.10 on the Bombay Stock Exchange, down 1.6% from Monday's close.

Govt may unveil aerospace policy soon after winter session

An aerospace policy aimed at attracting global investments and making Bangalore a major aerospace hub in South Asia may be unveiled by the government immediately after the assembly winter session at Belgaum.

An aerospace policy aimed at attracting global investments and making Bangalore a major aerospace hub in South Asia may be unveiled by the government immediately after the assembly winter session at Belgaum.

"We have an aerospace policy, which may be announced immediately after the Belgaum winter session. We are scheduling it. It is ready," Principal Secretary (Industry) M N Vidyashankar told reporters here.

He said government had taken inputs from all stakeholders in the aerospace sector before framing it and claimed Karnataka was the first state to announce such a policy.

Vidyashankar said Karnataka would become the largest knowledge hub in the world. "It may not happen in two or five or ten years, but it will happen," he said.

He also said no other city can beat Bangalore as a 'knowledge city' as it boasts of 396 Research & Development laboratories. Cities like National Capital Region and Pune boast of only 107 and 103 laboratories respectively, he said.

"Twenty years down the line, the world will depend on India and Karnataka for high-end manpower," Vidyashankar said.

On the progress on Aerospace Park near Bangalore International Airport, he said three units are almost ready and one of them would launch production on January 25 2013.

"About seven to eight companies have already started construction," he added.

Karnataka expects close to about six to seven billion dollars with every major aviation player under one roof at the aerospace park.

Vidyashankar said government plans to have the ground breaking ceremony of infrastructure developer Sun Forest City's project in March 2013.

"We are meeting them almost every week. They should be in a position to give us project details by December end," he said.

Sun Forest City have identified land and landowners have willingly agreed to surrender the land, he said, adding the land would be acquired in phases."

City homes, country roads

Bangalore has been battered by negative publicity in recent days. Yet, there appears to be no serious threat to the growth of the housing sector here. According to consulting firm Prop Equity, compared to the drop in sales in the National Capital Region and Mumbai Metropolitan Region, there has been very little ups and downs in the prices in Bangalore. This may be the reason for quite a few new launches during the just concluded festival season. Even new developers are starting their ventures in Bangalore.

If we take a ride around the Outer Ring Road we can see the real estate growth in the BBMP and nearby areas. There is hardly any space left without construction, either finished or semi-finished. Almost all ‘outskirts’ too are filled with new projects. Some prominent areas beaming with construction activities can be grouped into the following ‘extensions’:

North: New airport road, Yelahanka, Devanahalli and Doddaballapur Road

South: Hosur Road, Bannerghatta Road, HRBR and Anekal road

East: Banaswadi, K.R. Puram, Marathalli, Whitefield and Brookfield

West: Tumkur Road, Jalahalli, Hesarghatta Road and Nelamangala.

Kengeri and Bidadi on the south-west on Mysore Road can also be included in this cluster.

But what is of immediate concern is the condition of the roads leading to the new projects in the developing areas.

Most of the new projects quote ‘attractive’ prices as compared to the city areas and road or no road, the investor is lured to ‘book’ a flat or buy a plot before prices hit the ceiling. The promise of a ‘posh’ or ‘decent’ locale remains a promise even after the apartments are complete and the process of handing over the flat to the owner is done with.

One has to ponder over the need for at least a semi-developed road, lest you find your vehicle stuck in the mud, which problem remains for many months and even a couple of years till the owners or resident organisations shell out money to upgrade the approach road. The developers are also finding the going tough to dispose of the left out and surrendered apartments.

They try to attract investors by offering freebies like modular kitchen, modern furniture, festival discounts etc. Some of them get a VIP for inauguration of the flat as a route to improving the roads.

Property market and infrastructure

The critical role of roads and other infrastructure needs to be well understood by all stakeholders in the property market.

Even traders shun areas where the roads are in a bad condition. Lack of good roads and parking place can force even the leading brand outlets to move out /relocate.

The increasing number of malls too is a challenge to even well-established shopping centres as they have better ambience apart from other facilities under one roof. Prices of property will also be adversely affected when roads and other infrastructure are not well developed.

A recent report about posh shopping areas like M.G. Road / Brigade Road and Commercial Street losing their sheen needs to be taken as a prelude to worse days to come.

Some possible plans for the city’s roads and infrastructure

Ward-wise road development plans be put in place.

Sanction for new projects should essentially include plans for road development.

In addition to arterial roads, access roads to new projects should also find a place in the city’s annual plans.

Rubberised/concrete roads which may have longer life to be preferred to usual asphalt roads.

Maintenance of roads be entrusted to specialised agencies.

Loopholes in awarding work contracts be plugged and stringent standards prescribed despite opposition.

Other infrastructure like water supply and drainage to go hand in hand with property development instead of waiting for Cauvery water for years together.

Property prices and demand for houses cannot be viewed in isolation. It will be in tandem with the various infrastructure needed for better living and enhanced quality of life.

If this is not achieved, the demand graph will not hold on for long.

Bangalore emerging as a major city of ‘organic brands’

BioFach India, an offshoot of World Organic Trade Fair BioFach in Nurnberg, plans to hold its organic fair in Bangalore from November 29 to December 1.

The fourth edition of BioFach India 2012 by Nuremberg Messe is supported by the Karnataka Department of Agriculture and the International Competence Centre for Organic Agriculture (ICCOA).

“The fair is to facilitate organic production, manufacturing, trade and it is the single platform where various stake-holders in the organic value chain congregate to network,” said International Competence Centre for Organic Agriculture (ICCOA) Executive Director Manoj Kumar Menon.

Talking about trends in the organic food consumption in Bangalore, Menon said, “The city has emerged as a prominent organic brands city in the country.”

“Compared with other cities which have only a few of them, Bangalore has brands in black pepper, ginger, turmeric and coffee etc. The city has also attracted major crops to do good volumes on a daily basis,” he added.

Menon expressed confidence that the BioFach India would further boost the organic farming as well as organic trade in Karnataka. At the last year’s fair organic cotton and jaggery had fetched some business.

He explained that the previous edition of international organic trade fair held in Bangalore had seen a total business transaction of Rs 17.5 crore. The major chunk of this had gone to Karnataka as the home state had accounted for a business of Rs 11 crore.

Karnataka Principal Secretary Agriculture Department Bharatlal Meena said 141 exhibitors including 16 international players had so far confirmed their participation in the event.

Similarly, various States including Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Himachal Pradesh, Sikkim and Mizoram were participating in the event being held at the Bangalore Palace Grounds.

Meena said country accounted for 10.9 lakh hectares of crops under certified organic cultivation including 51,500 hectares in Karnataka. In 2011, the exports of organic crops had earned revenue of Rs 600 crore for the country while the domestic sales had fetched Rs 300 crore, he noted.

In a bid to encourage organic agriculture in the state, the Agriculture Department had taken up a plan to promote organic farming in about 100 acres of land in each taluk.