The services sector continues to be the major contributor to the State’s economy and is showing encouraging trends.

Despite slowing growth of the services sector, the Karnataka’s economy is expected to grow at 5.9 per cent and reach Rs 3,03,444 crore in 2012-13 (GSDP at constant prices 2004-05) compared with 5.5 per cent growth rate recorded in 2011-12.

According to the Economic Survey of Karnataka 2012-13, which was tabled in the State Assembly on Thursday, despite drought in 157 taluks, the agriculture sector is expected to register a growth of 1.8 per cent against minus 2.2 per cent in 2011-12.

Grain production

The food grain production is likely to be 12.5 million tons compared with the target of 13.65 million tons. Low area coverage under kharif and rabi crops and loss of rain fed kharif crops is about 1.62 million hectares during 2012-13.

The survey highlighted with cautioning note that the contribution of the agriculture sector to the economy has been declining continuously without commensurate decline in the work force deployed in agriculture.

Industry figures

The industry sector is estimated to register a growth of 2.4 per cent during 2012-13. In 2011-12 also, the industry sector recorded 2.4 per cent. This was largely due to a sharp decline in the manufacturing sector and contraction in the growth rates of mining and quarrying sectors.

However, the Sate’s revenue realization from major minerals has increased by 18 per cent to Rs 875 crore as against the target of Rs 742 crore for 2012-13.

The services sector continues to be the major contributor to the State’s economy and is showing encouraging trends. The services’ sector is likely to grow by 8.9 per cent as against 9.5 per cent in 2011-12 and it continues to be the key driver of the 5.9 per cent growth of GSDP in 2012-13. The services sector consists of real estate, ownership of dwellings and business services and banking and insurance among others.

At the same time, the per capita GSDP at constant prices is expected to increase by 4.9 per cent at Rs 50,254 as against Rs 47,911 in 2011-12.

Less than national average

The State’s growth rate is slightly less than the all-India average. The decline can be largely attributed to the State’s economy being more open to external trade as compared to the national economy, the survey said.

The services sector is likely to grow by 8.9 per cent as against 9.5 per cent in 2011-12 and it continues to be the key driver of the 5.9 per cent growth of GSDP in 2012-13. The services sector consists real estate, ownership of dwellings and business services and banking and insurance among others.

At the same time, the per capita GSDP at constant prices is expected to increase by 4.9 per cent at Rs 50,254 as against Rs 47,911 in 2011-12.

A marginal decrease is observed in the composition of GSDP with the contribution of agriculture & allied activities and industry sectors changing from 16.1 per cent and 27 per cent in 2011-12 to 15.3 per cent and 25.9 per cent respectively in 2012-13.

However, a marginal increase in the composition of the services sector is seen at 58.8 per cent from 56.9 per cent. During the last few years, the services sector has been the largest component of GSDP in Karnataka.

Per capita income

Per capita net income (i.e. per capita NSDP) of Karnataka, at current prices, is estimated at Rs 78,049 in 2012-13, an increase of 13 per cent as against Rs 69,051 in 2011-12. During 2012-13, the per capita income at constant prices is estimated at Rs 44,389 as compared to Rs 42,218 achieved in 2011-12.

“The state’s revenue resources are showing signs of recovery and are further expected to increase to 15.64 per cent in 2012-13 from 15.28 per cent in 2010-11. The state’s own tax revenues increased to Rs 51,821 crore during 2012-13 from Rs 25,987 crore in 2007-08, showing a CAGR of 14.8 per cent,” the survey pointed out.

The share of development expenditure in GSDP has significantly increased from 10.51 per cent in 2007-08 to 12.89 per cent in 2012-13, while the share of interest payments has declined from 1.93 per cent to 1.44 per cent.

Human development

In overall human development, Karnatanka is ranked tenth among 19 major States in the country. Karnataka is way behind Kerala (number 1) and Tamil Nadu (sixth).

Urbanization in Karnataka increased from 22 per cent in 1951 to 39.48 per cent in 2011. This trend declares the state as the fifth most urbanized state in India and estimated to maintain the position by 2030. (EOM).

(This article was published on February 7, 2013)
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