Karnataka is taking a longer time to emerge out of the global economic slowdown compared to the country as a whole.
According to the Economic Survey 2009-10, tabled in the Legislative Assembly on Thursday, the State has registered a lower growth rate in Gross State Domestic Product (GSDP)at 5.5 per cent during 2009-10 compared to the national advance estimates of 8.7 per cent. The State growth rate in 2008-09 was just 4.5 per cent.
A less than national average growth rate will not be the only worrying factor for Chief Minister B S Yeddyurappa, who also holds the finance portfolio, when he presents the state Budget for 2010-11 on Friday.
Yeddyurappa will be faced with the delicate task of ensuring that the State’s economy does not derail due to decline in resource mobilisation by the key revenue generators —commercial taxes, stamps and registration and motor vehicle taxes — and at the same time continue the populist programmes his government announced.
According to the Survey, a major worrying factor is the decline in foodgrain production. Against a target of 118.35 lakh tonnes, the anticipated foodgrain production is 106.53 lakh tonnes.
The oilseed sector will also fall short in meeting its target. Only 11.03 lakh tonnes will be produced against a set target of 16 lakh tonnes.
It is no surprise that agriculture will be logging a negative growth of 0.4 per cent its GSDP 2009-10. The devastating floods in North Karnataka last year seems to have taken its toll. The survey states that 18.95 lakh hectares of kharif crops were lost by submergence, deposition of silt and deterioration of grain quality.
Positive factors
However, on the positive side, several key sectors like manufacturing, mining, constructions, housing, real estate, banking and insurance are showing signs of recovery. While these sectors showed a decline in growth last year, they are projected to show an average growth of 7.5 per cent this fiscal.
The service sector continued to dominate the economy contributing 54 per cent to the GSDP as compared to other sectors. The contribution of the secondary sector (mainly industry) and primary sector (agriculture and allied activity) are 29 and 17 per cent respectively.
Inflation was more or less the same as that of the country. The rate of inflation in consumer price index for industrial workers has increased to 14.9 per cent in December 2009 as compared to 9.7 per cent in the same period during the previous year.
The survey predicts that per capita GSDP or per capita income in real terms during 2009-10 at constant prices is likely to attain a level of Rs 32,411 as compared to Rs 31,041 during 2008-09.
The growth rate in per capita income is estimated at 4.4 per cent during the year 2009-10 as against the pervious year estimate of 3.4 per cent.
The survey estimates that the cumulative irrigation potential to be created by the end of 2009-10 is 34.84 lakh hectares from all three categories of irrigation (major, medium, and minor irrigation)projects.