Slowing growth puts Karnataka on a par with national average
- The gloomy picture, owing to both domestic and global economic slowdown, and spread of Covid-19, is likely to put Karnataka on the back foot
- Yediyurappa’s ₹2.38-trillion state budget saw an increase of ₹11,268 crore, up 4.92% from the previous coalition government’s revised budget estimates for FY19
The closing gap between the national growth rate and that of Karnataka presents a worrying trend, which could not only add to the woes of state, but could further impact services, agriculture and industries sectors, analysts said.
If projections for 2020-21 holds true, then Karnataka’s estimated growth rate of 6.3% and the national growth rate of 6-6.5% is likely to be on a par, raising concerns for a state which has not only been one of the top performers, but also one of the biggest contributors to the central coffers.
The gloomy picture, owing to both domestic and global economic slowdown, and the spread of Covid-19, is likely to put Karnataka on the back foot, forcing it to endure sustained decline in growth, widening regional imbalances and deepening agrarian distress. This may also prolong the economic recovery of the state.
Karnataka, which accounts for 8.3% (2019-20) of the national GDP (gross domestic product), has witnessed a decline in growth rate in services from 9.8% in 2018-19 to 7.9% in 2019-20, while industries fell from 5.6% to 4.8% during the same period.
Kshitij Urs, public policy expert and visiting faculty, National Law School, said Karnataka has remained in the top five performing states, but the budget does not promise to invest in ambitious projects to remain competitive. “You cannot really expect this in the given limitation for the state administration to think of competing in that top five.” Urs also hinted at a further slip due to lack of stimulus and direction in the state budget presented by the B.S. Yediyurappa-led Bharatiya Janata Party (BJP) government.
Yediyurappa’s ₹2.38-trillion state budget saw an increase of ₹11,268 crore, up 4.92% from the previous coalition government’s revised budget estimates for FY19. However, at constant (2011-12) prices, Karnataka’s gross state domestic product (GSDP) growth rate has consistently fallen for the fifth consecutive year from 11.1% in 2015-16 to 6.8% in 2019-20, and is projected to grow at 6.3% in 2020-21, according to the Medium Term Fiscal Plan 2020-24. During the same period, the national GDP at constant prices fell from 8% in 2015-16 to 5% in 2019-20.
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First Published:9 Mar 2020, 11:59 PM IST
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