Gujarat tops the list of preferred investment destination in the country with 1,455 projects worth Rs 13.35 lakh crore underway, according to Associated Chambers of Commerce and Industry in India (Assocham).
Karnataka is the next preferred investment destination in the country after Gujarat, with 1,528 projects worth Rs 9.1 lakh crore underway, it added.
Nearly 44% of the 1,528 projects in Karnataka are in manufacturing sector followed by 22.4% in services, 15% in power and about 14% in real estate.
The projects are in different stages of implementation, Assocham said in its study titled 'Karnataka - Next Growth Leader in the Making', unveiled here today.
The study was jointly released by Assocham President Dilip Modi, Co-Chairman of Assocham Southern Regional Chapter J Crasta and Assocham Secretary General DS Rawat.
Investment flows into manufacturing sector marked a 107.8% jump during 2010, compared to the previous year while those in services sector registered a healthy growth of 76.5%, it said.
Investments in real estate and irrigation sectors witnessed 30.2% and 19.3% growth, respectively.
"We appreciate the efforts made by current leadership to realise the growth potential", Modi said, adding that "Assocham believes that Karnataka needs to build further on its present strength".
Since 2000-01, the services sector has clocked an average growth rate of nine% and accounts for nearly 56% share of the state domestic product, while industrial sector contributes 28.5% (with 9.3% growth) and primary sector 15.7% (with negligible growth).
Assocham study further said Karnataka must reduce unproductive subsidies and called for special focus on micro, small and medium enterprises (MSMEs) and capitalising on the existing sectoral capacities.
"The state should promote industrial estates in backward regions in public private partnership mode by announcing special incentives and further streamlining single window clearances system which are essential elements of successful industrial policies", the industry body added.