’ ₹16,000 subsidy for 5,000 jobs’: HD Kumaraswamy questions US firm in Gujarat getting incentives, clarifies later

HD Kumaraswamy, the Union Minister of Heavy Industries and Public Enterprises of India, reportedly raised concerns over the central government subsidy given to large firms like US-headquartered semiconductor manufacturer Micron. He questioned the company "potentially receiving ₹3.2 crore in subsidies for every job it creates" in Gujarat.

“The new manufacturing unit will generate about 5,000 jobs. For this, we are giving them $2 billion [around 16,000 crore] in subsidies... If you calculate, that’s 70% of the company’s total investment,” Kumaraswamy was quoted by the Times of India as saying on Friday.

The Union minister said he had asked officials "how justifiable it is to allocate such a significant amount of funds". He also questioned the benefits given to small-scale industries.

"Conversely, there are small-scale industries... In Peenya (an industrial estate in Bengaluru), there are small-scale industries. How many lakh jobs have they created? What benefits have we provided to them? I am contemplating these matters, such as how to safeguard the nation’s wealth," Kumaraswamy reportedly said.

He was speaking to party workers upon returning to Bengaluru after joining the third Narendra Modi government.

Opposition leader Priyanka Chaturvedi said Kumaraswamy raised a "valid question". She posted in X, "In Gujarat, promise to create 5000 jobs, subsidies worth USD 2 billion given to US based semiconductor manufacturer. For each job created GoI has given a subsidy of 3.2 crores."

Kumaraswamy offers clarification

Kumaraswamy's JD(S) party is part of the BJP-led NDA government at the Centre. He took over as the Union Minister of Heavy Industries and Public Enterprises of India in Prime Minister Narendra Modi government last week. Meanwhile, the BJP is also in power in Gujarat.

After identifying the company in his address to party workers in Karnataka on Friday, Kumaraswamy clarified that he was “not authorised” to do so, the Times of India reported.

He told media houses on Saturday that he was "misquoted". He said, "I have not mentioned any state. Why has my statement been picked up like this? I have to be very cautious in the future."

He added, “Bringing the semiconductor sector in India is strategic; we require it. Parallelly, we have to create jobs for the second-line sector, our small-scale industry...We are thinking about it and working out on it...”

Micron Technology deal

Micron Technology announced in June 2023 its plans to build a new assembly and test facility worth $2.75 billion in Gujarat. In a press release, the company had said, "Micron’s investment will be up to $825 million over the two phases of the project and will create up to 5,000 new direct Micron jobs and 15,000 community jobs over the next several years."

Micron had said it will receive 50 percent fiscal support for the total project cost from the Indian central government and incentives representing 20 percent of the total project cost from the state of Gujarat.