HD Kumaraswamy questions the subsidy given to a US-based company for its Gujarat unit

New Delhi: Union Minister for Steel and Heavy Industries and Janata Dal (Secular) leader HD Kumaraswamy sparked controversy when he pointed out disproportionate subsidies given to a US semiconductor company. Kumaraswamy said US-based Micron Technology, which is set to set up its $2.5 billion unit in Gujarat, has been given a subsidy of Rs 3.2 crore for each job it creates.

“The new production plant will create approximately 5,000 jobs. For this purpose, we are giving them subsidies of USD 2 billion… If you do the math, it is 70% of the company’s total investment,” Kumaraswamy said on his return to Bengaluru after taking over as a minister in the Union government.

However, he quickly clarified that he was “not authorized” to identify the company in his public appearances.

Kumaraswamy’s remarks once again highlighted the raging political debate over rising inequality in the country, with opposition forces accusing the Narendra Modi government of waiving significant amounts of taxes for businesses, ostensibly to encourage investment, while granting little or no relaxation in regulations to individuals paying income tax.

At the same time, the opposition also criticized the increase in direct taxes on goods used in agriculture, the collection of customs duties on various services and the gradual tightening of indirect taxes on FMCG products.

Against this background, the newly appointed Union minister only gave a positive comment to the opposition’s criticism of the Modi government’s fiscal policy.

“I asked officials how it was justified to allocate such a large amount of funds. Conversely, there are small-scale industries… There are small-scale industries in Peenya (industrial estate in Bengaluru). How many millions of jobs have they created? What benefits have we provided them? I am considering issues like protecting the wealth of the nation,” Kumaraswamy said.

He added that his goal would be to create jobs for young people as a minister. “I can also make it easier to find a job outside the state. You must be ready for relocation,” the minister told his audience in Bengaluru.

The minister’s independent remarks are also a reflection of how a coalition government at the Center could face a situation where allies differ on policy issues. Over the past 10 years, when the BJP had a majority, Modi’s ministers rarely expressed their individual views on policy issues, which only reinforced their belief that they were guided by the Prime Minister’s Office in taking all important decisions.

Kumaraswamy urged the Congress government in Karnataka to put aside their differences and “cooperate and contribute” for the welfare of the state.