Despite slowing growth of the services sector, the Karnataka 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)) as against 5.5 per cent growth rate recorded in 2011-12. The services sector, which recorded 60 basis points drop in the growth rate, continues to be the major contributor to the state’s economy and is showing encouraging trends.
The state’s growth rate is slightly less than the all India average. The decline can be largely attributed to its economy being more open to external trade as compared with the national economy, the pre-Budget economic survey for 2012-13 released here on Thursday said.
The good news is that the agriculture and allied sector has bounced back despite facing drought for two consecutive years and has achieved a growth rate of 1.8 per cent in 2012-13 as against a contraction of 2.2 per cent in 2011-12, according to advance estimates of Karnataka’s gross state domestic product (GSDP) at constant prices (2004-05).
Foodgrain production is likely to be 12.5 million tonnes as against the target of 13.65 million tonnes. On account of drought in 157 taluks of the state, low area coverage under kharif and rabi crops and loss of rainfed kharif crops is about 1.62 million hectares during 2012-13.
“The state’s various initiatives in the primary sector, especially in agriculture and allied activities, have contributed to better redistribution of wealth and inclusive growth,” the survey said.
According to the economic survey of Karnataka for 2012-13 tabled in the Assembly on Thursday, the growth rate in the industry sector is estimated to have stagnated at last year’s level of 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, revenue realisation from major minerals increased 18 per cent to Rs 875 crore as against the target of Rs 742 crore for 2012-13.
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 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.