Karnataka’s economy is on a steady path to post-pandemic recovery.
The southern state, which achieved 90% double-dose vaccination coverage last month, expects its economy to bounce back in the current fiscal year despite the two Covid-19 waves it faced.
The gross state domestic product (GSDP) for FY22 at constant prices is likely to grow by 9.5% versus a 2.6% contraction witnessed in 2020-21.
“The economy seems to be rebounding,” Chief Minister Basavaraj Bommai said in his maiden budget speech on Friday, adding that “all efforts made to bring the economic development on the right track are finding success now.”
The advance estimates of GSDP of Karnataka for the year 2021-22 at current prices is Rs 20.5 lakh crore, up 18.4% from Rs 17.31 lakh crore in FY21. Constant prices adjust for the effects of inflation, while current prices don’t.
Karnataka's GSDP accounted for 8.8% of India's GDP in 2021-22, while producing 10% of the formal jobs in the country.
All the three key sectors showed growth in the current financial year.
"The industrial sector has grown by 7.4%, the service sector has grown by 9.2% and the agriculture sector has grown by 2.2%," Bommai said.
However, the GSDP at current prices revealed that the industry sector's compounded annual growth rate over five years - 6.1% - lags way behind that of the agricultural (16.6%) and services sector (11.6%).
This "signifies that the structures to support this sector are inadequate and require investment, incentives and a structured movement to skill and transfer excess agricultural workforce to industry," the economic survey of Karnataka 2021-22 stated.
The per capita state income of Karnataka at current prices is estimated to be Rs 3.05 lakh, the highest among the top five Indian states.
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