Karntaka economy updates
The Gross State Domestic Product (GSDP)
GSDP of Karnataka for 2019-20 (at current prices) is estimated to be Rs 15,88,303 This is 13% higher than the revised estimate for 2018-19.
Total expenditure
Total expenditure for 2019-20 is estimated to be Rs 2,34,153 crore, a 7.7% increase over the revised estimate of 2018-19. In 2018-19, there is estimated to be a decrease of Rs 1,037 crore (0.5% of the budgeted estimate) of expenditure as per the revised estimate. (Budget 2019)
Total receipts
Total receipts (excluding borrowings) for 2019-20 are estimated to be Rs 2,30,738 crore, an increase of 8.7% as compared to the revised estimate of 2018-19. In 2018-19, total receipts (excluding borrowings) are estimated to fall short of the budgeted estimate by Rs 1,506 crore (0.7%). Budget 2019)
Revenue surplus
Revenue surplus for the next financial year is targeted at Rs 258 crore, or 0.02% of the Gross State Domestic Product (GSDP). Fiscal Deficit is targeted at Rs 42,051 crore (2.65% of GSDP).
Budget allocation for Infrastructure-2/”>INFRASTRUCTURE projects
An amount of Rs 2,300 crore has been earmarked towards Nava Bengaluru Kriya Yojana for the development of infrastructure within the city of Bengaluru. Further, Rs 10,000 crore has been announced for the development of 7,940 km roads.(Budget 2019)
Per capita income
The per capita GSDP of Karnataka in 2017-18 (at current prices) was Rs 1,78,121. This is 9% higher than that in 2016-17.
Crop loan waiver
An amount of Rs 12,650 crore has been announced for the provision of crop loan waivers. Of this, Rs 6,500 crore has been allocated to Commercial Banks for the waiver of loans given to farmers, and Rs 6,150 crore to the co-operative sector. (Budget 2019)
According to the 5th Annual EMPLOYMENT-Unemployment Survey (2015-16), among the major states, Karnataka has the one of the lower unemployment rates in the country at 1.5% as compared to the all-India level of 5%. (Unemployment survey)
Capital expenditure for 2019-20 is proposed to be Rs 52,548 crore, which is an increase of 1.5% over the revised estimates of 2018-19.
Capital expenditure includes expenditure affecting the assets and liabilities of the state, such as: (i) capital outlay, i.e. expenditure which leads to creation of assets (such as bridges and hospitals), and (ii) repayment and grant of loans by the State Government. Karnataka’s capital outlay for 2019-20 is estimated to be Rs 40,080 crore, which is 11.6% higher than the revised estimate of 2018-19. The capital outlay towards water supply, sanitation, housing and urban development is estimated to increase by Rs 3,239 crore (an increase of 92%) from the revised estimates of 2018-19. (Budget 2019)
Revenue expenditure for 2019-20 is proposed to be Rs 1,81,605 crore, which is an increase of 9.6% over revised estimates of 2018-19. This expenditure includes payment of salaries, pensions, and interest, among others. Revenue expenditure accounts for 78% of the total expenditure of 2019-20.
Tax to GSDP ratio
The own tax to GSDP ratio is targeted at 6.4% in 2019-20, which is marginally lower than the revised estimate of 6.8% in 2018-19. This implies that Growth in collection of taxes has been marginally slower than the growth in the economy.
This is the excess of revenue expenditure over Revenue Receipts. A revenue deficit implies that the government needs to borrow in order to finance its expenses which do not create capital assets. However, the budget estimates a revenue surplus of Rs 258 crore (or 0.02% of GSDP) in 2019-20. This implies that revenue receipts are expected to be higher than the revenue expenditure, resulting in a surplus.
The 14th Finance Commission had recommended that states should eliminate revenue deficits. The 2019-20 estimates for Karnataka suggest that the state will meet this target of eliminating revenue deficit.
Fiscal deficit
This is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government, and leads to an increase in total liabilities. In 2019-20, Karnataka’s fiscal deficit is estimated to be Rs 42,051 crore, which is 2.6% of the GSDP.
The estimate is below the 3% limit prescribed by the 14th Finance Commission. This limit may be relaxed to a maximum of 3.5%, if states are able to contain their debt and interest payments to certain specified levels.
Education budget
Karnataka has allocated 12.6% of its expenditure on education in 2019-20. This is lower than the Average expenditure allocated to education by other states (using 2018-19 BE). (15.9%)
agriculture Sector
Government announced Grading of Organic and Zero budget farm produce, encouragement to grading and packaging and branding units; 50% subsidy to eligible entrepreneurs and Start-up entrepreneurs with a grant of Rs.2 crore.
- Grant of Rs. 145 crore to Israel model farming scheme.
- The Grant of Rs.250 crore to Krushi Bhagya scheme. Direct cash transfer to millet growers: to encourage the millet farming with cash incentive of Rs. 10,000 per hectare under “Raitha Siri” scheme with a grant of Rs.10 crore.
- A grant of Rs. 5 crore to encourage “Country chicken Poultry Farming” (Nati Koli Sakanike) for 10,000 unemployed poor youth.
- Cooperative department – Establishment of a “Debt Relief Commission” in Karnataka after the Kerala model.
A grant of Rs.950 crore for “Ayushman Bharath – Arogyakara Karnataka” by the State and only Rs. 409 crore by the Central Government for the year 2019-20.
- Establishment of D.N.B. Centres at 11 selected districts and taluk hospitals at a cost of Rs. 2 crore with a view to ameliorate the shortage of Specialists.
- Sports Injury and Robotic Surgery: A grant of Rs. 10 crore for Sports Injury and Robotic Surgery facility at Sanjay Gandhi Institute of Trauma and Orthopedics, Bengaluru.
- Mammogram and Papsmear Scanning facilities in 10 districts at Mangaluru, Tumakuru, Vijayapura, Chitradurga, Davanagere, Bagalakote, Chikkamagaluru, Haveri, Kolar andChikkaballapur at a cost of Rs. 10 crore.
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The economy of Karnataka is the seventh-largest economy in India, with a gross state domestic product (GSDP) of â¹10.37 lakh crore (US$140 billion) in 2020â21. The state has a diversified economy, with major sectors including agriculture, Industry, and Services.
Agriculture is the largest sector of the Karnataka economy, accounting for 28% of the GSDP in 2020â21. The state is a major producer of rice, sugarcane, Cotton, and coffee. The state government has been promoting agricultural diversification and has been successful in increasing the production of Horticulture-2/”>Horticulture crops, such as fruits and vegetables.
The industry sector is the second-largest sector of the Karnataka economy, accounting for 27% of the GSDP in 2020â21. The state is home to a number of major industries, including information technology, Biotechnology, and manufacturing. The state government has been promoting industrial development through a number of initiatives, such as the Karnataka Industrial Area Development Board (KIADB).
The services sector is the third-largest sector of the Karnataka economy, accounting for 45% of the GSDP in 2020â21. The state is a major center for information technology and business process Outsourcing. The state government has been promoting the development of the services sector through a number of initiatives, such as the Karnataka State IT Policy.
Karnataka has a number of strengths that have contributed to its economic growth. The state has a well-educated workforce, a strong infrastructure, and a favorable Investment Climate. The state government has also been proactive in promoting Economic Development.
However, the state also faces a number of challenges. The state has a high rate of POVERTY and unemployment. The state government needs to focus on addressing these challenges in order to ensure sustainable economic growth.
The economy of Karnataka is expected to grow at a rate of 8% in 2022â23. The state government has set a target of achieving a GSDP of â¹15 lakh crore by 2025. The state government is taking a number of initiatives to achieve this target, such as the Karnataka Vision 2025 document.
The economy of Karnataka is expected to continue to grow in the coming years. The state has a number of strengths that will help it to achieve this growth. However, the state also faces a number of challenges that need to be addressed. The state government is taking a number of initiatives to address these challenges.
Here are some frequently asked questions and short answers about the Karnataka economy:
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What is the size of the Karnataka economy?
The Karnataka economy is the fifth largest in India, with a gross state domestic product (GSDP) of â¹10.34 lakh crore in 2020-21. -
What are the major sectors of the Karnataka economy?
The major sectors of the Karnataka economy are agriculture, manufacturing, and services. -
What are the major challenges facing the Karnataka economy?
The major challenges facing the Karnataka economy are Infrastructure Development, unemployment, and poverty. -
What are the major opportunities for the Karnataka economy?
The major opportunities for the Karnataka economy are in the areas of information technology, biotechnology, and tourism. -
What are the government’s initiatives to promote the Karnataka economy?
The government of Karnataka has taken several initiatives to promote the economy, including the following: -
The Karnataka Industrial Areas Development Board (KIADB) is responsible for developing industrial areas in the state.
- The Karnataka State Electronics Development Corporation (KEONICS) is responsible for promoting the electronics industry in the state.
- The Karnataka Biotechnology and Information Technology Services (KBITS) is responsible for promoting the biotechnology and information technology industries in the state.
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The Karnataka Tourism Development Corporation (KTDC) is responsible for promoting tourism in the state.
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What are the key indicators of the Karnataka economy?
The key indicators of the Karnataka economy are the following: -
Gross state domestic product (GSDP): The GSDP is the total value of goods and services produced in a state in a given year.
- Per capita income: The per capita income is the average income of a person in a state.
- Employment: The employment rate is the Percentage of the Population that is employed.
- Inflation: Inflation is the rate at which prices for goods and services are rising.
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Poverty: The poverty rate is the percentage of the population that lives below the Poverty Line.
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What is the future outlook for the Karnataka economy?
The future outlook for the Karnataka economy is positive. The state is expected to continue to grow at a healthy rate, driven by its strong manufacturing and services sectors. The government’s initiatives to promote the economy are also expected to bear fruit in the coming years.
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Which of the following is not a major sector of the Karnataka economy?
(A) Agriculture
(B) Industry
(C) Services
(D) Tourism -
The service sector contributes the largest share to the Karnataka economy. What is the percentage share of the service sector in the state’s GDP?
(A) 50%
(B) 60%
(C) 70%
(D) 80% -
The IT and BPO sector is a major contributor to the Karnataka economy. What is the annual revenue generated by the IT and BPO sector in the state?
(A) $10 billion
(B) $20 billion
(C) $30 billion
(D) $40 billion -
The manufacturing sector is also a major contributor to the Karnataka economy. What are the major manufacturing industries in the state?
(A) Electronics
(B) Automobiles
(C) Aerospace
(D) All of the above -
The agriculture sector is the backbone of the Karnataka economy. What are the major crops grown in the state?
(A) Rice
(B) Sugarcane
(C) Coffee
(D) All of the above -
The Karnataka economy is growing at a healthy rate. What is the annual growth rate of the state’s GDP?
(A) 7%
(B) 8%
(C) 9%
(D) 10% -
The Karnataka government has taken several steps to improve the state’s economy. What are some of these steps?
(A) Infrastructure development
(B) Tax Reforms
(C) Investment promotion
(D) All of the above -
The Karnataka economy is facing some challenges. What are some of these challenges?
(A) Power shortage
(B) Water shortage
(C) Infrastructural bottlenecks
(D) All of the above -
The Karnataka government is working to address the challenges facing the state’s economy. What are some of the measures being taken?
(A) Increasing power generation
(B) Improving water management
(C) Addressing infrastructural bottlenecks
(D) All of the above -
The future of the Karnataka economy looks bright. What are some of the factors that are expected to drive the state’s economic growth in the coming years?
(A) The growth of the IT and BPO sector
(B) The growth of the manufacturing sector
(C) The growth of the agriculture sector
(D) All of the above