Tussle for IT/BT ministry between M B Patil and Priyank Kharge led Karnataka CM Siddaramaiah to retain portfolio: Sources

The IT/BT portfolio is central to the economy of the state as Bengaluru is recognised as the IT capital of the country.

A source said, “Priyank Kharge sought the IT/BT portfolio since he had handled it previously. However, as industries minister M B Patil was of the view that the IT/BT portfolio is closely allied to the industries ministry. A decision was taken by the CM to keep the portfolio with himself on account of the competition for the portfolio.”

According to the notification on portfolios issued on May 28, Siddaramaiah now holds Finance, Cabinet Affairs, Department of Personnel and Administrative Reforms, Intelligence, Information, IT/BT, Infrastructure Development and all unallocated portfolios.

Patil, who is a close associate of the CM, has been entrusted with the Large & Medium Industries portfolio while Kharge has been allocated the Rural Development and Panchayat Raj ministry.

The IT/BT minister incidentally has a key role to play in facilitating the smooth functioning of the bellwether IT and start up industry in Bengaluru and has to work in close liaison with the industries ministry, the labour ministry, the infrastructure development ministry and the Bengaluru development ministry.

The previous BJP government and its IT/BT minister C N Ashwathanarayan had set a target of $150 billion of software exports from Karnataka by 2028 compared to the $58 billion exports at present.

According to the state’s economic survey for 2022-23, “Karnataka is home to over 5,500+ IT/ITES companies, ~750 MNCs contributing to over $ 58 billion of exports, giving direct employment to over 12 lakh professionals and creating over 31 lakh indirect jobs. The industry contributes to over 25% of the State’s GDP. The share of software exports is nearly 40% of the country’s exports of $155 billion.”

Meanwhile, Karnataka’s Biotechnology economy recorded 15 per cent Year over Year (YoY) growth in 2022 and is valued at $18.9 billion. Nearly 30 per cent of the overall GDP of the state is driven by the digital economy.

The previous BJP government had outlined plans of “hosting 5,000 IT companies and start-ups by 2026 in the Mysuru, Hubbali and Mangaluru clusters and creating employment opportunities for 10 lakh people (direct and indirect) by 2026”.

While the IT services sector has been the main driver of the state’s economy, Karnataka is also looking to attract foreign investments in allied industries like manufacturing. The state attracted $39.36 billion FDI equity inflow over the period October 2019 to September 2022 or 23 per cent of all India FDIs.

Among notable recent investment moves is the purchase of land at a cost of Rs 300 crore on the outskirts of Bengaluru by the Hon Hai Precision Industry Co which is the owner of Foxconn the mobile phone manufacturing firm for global cellphone giants like Apple.

On May 8 this year, ahead of the state Assembly polls, Hon Hai Precision Industry reportedly informed the London Stock Exchange of the purchase of 300 acre of land in the Information Technology Investment Region (ITIR), Devanahalli Taluk, Bangalore Rural District, at a cost of Rs one crore per acre and total cost of Rs 300 crore. The firm is reported to be considering building a manufacturing unit on the land acquired from the Karnataka Industrial Area Development Board.

Interestingly, the tussle between Patil and Kharge for the IT/BT portfolio is one of two competitive bids for portfolios that is believed to have delayed the allocation of portfolios by a day in the Congress cabinet.

A second and a more high profile battle for the portfolio was for the role of the Bengaluru Development Minister between Deputy Chief Minister D K Shivakumar and senior Bengaluru MLA (eight term) Ramalinga Reddy. The Bengaluru development ministry was taken by Shivakumar after parleys, leaving Reddy to sulk.

Sources said that Siddaramaiah had initially indicated that the Bengaluru development portfolio would go to Reddy, a veteran, but Shivakumar insisted on the portfolio and was given control.

The Deputy Chief Minister and the Karnataka Pradesh Congress Committee chief, Shivakumar has also bagged the irrigation ministry which was sought by Patil who had handled the portfolio during the previous Congress regime under Siddaramaiah.