Row over sale of land to JSW Steel: Industry body warns Karnataka of sending wrong signals

Industry body, the Bangalore Chamber of Industry and Commerce (BCIC) on Tuesday warned the Karnataka Government that the controversy surrounding the sale of land to Sajjan Jindal-controlled JSW Steel would send a wrong signal to investor community in both India and overseas.
The JSW Steel is based out of Vijayanagar (Toranagallu) in Ballari district, and Karnataka Cabinet decision to execute absolute sale of the land the listed company currently holds on lease has run into issues with the Opposition BJP and senior Congress leader HK Patil. The BJP is holding a dharna in protest of the decision.

The BCIC, in a press release, urged the JD(S)-Congress regime to work towards early resolution of issues related to such land transactions with major industrial houses in Karnataka. Over the last three years, the government not taken a policy decision on regularising land lease for industrial use.

BCIC president Kishore Alva said: “The facilitation of industry to setup shop in Karnataka is one of the most important tasks of the Government of Karnataka. The present controversy over regularisation of land lease of JSW Steel is unfortunate as well as unnecessary. We understand that political colour has been given to the legitimate use of land by a large industry to setup its plant and facilities."

He said the State Government were to take a rigid stand, it will send a wrong signal and no industry would think of investing in the State and Karnataka would stand lose out to the more aggressive neighbouring states.

The Mumbai-headquartered JSW Steel operates a 12 million tonnes per annum (MTPA) steel plant on the sprawling campus it got under a lease-cum-sale agreement, and awaits the status of 3666 acres of land to change from "lease-hold" to "free-hold" with necessary land registration formalities.

JSW Steel Deputy MD Vinod Nowal, in a recent chat with ET, said: “We signed the MoU with Karnataka in 1995, and paid the the price for the land as fixed by the government, and provided jobs to land losers. We have fulfilled all conditions, and the sale transaction was delayed because of elections.”

The state government allotted the land in two instalments of 2,000 acres in 2006 and 1,666 acres in 2007 at Toranagallu in Sandur taluk. “The company has invested about Rs 50,000 crore to build the steel facility, ancillary units, township and other infrastructure, and provided jobs to 25,000 people,” Nowal said. “We are the largest exporter of high-grade steel in India, and pay about Rs 7000 crore in taxes a year,” Nowal added.