By IANS,
Bangalore : Karnataka’s economic growth for this fiscal (2011-12) will dip 1.8 percent to 6.4 percent from 8.2 percent in the previous fiscal (2010-11) owing to negative growth (minus 2.9 percent) in agriculture and allied sectors.
According to the state’s economic survey (2011-12) report tabled in the state legislative assembly Tuesday on the first day of the 10-day budget session here, a double-digit growth (10.6 percent) in the robust services sector, driven by the resilient IT industry, has made up for the decline in growth from the industry sector (manufacturing) and the farm sector.
“Advanced estimates of the gross state domestic product (GSDP) at constant prices (2004-05) show that Karnataka’s economy is expected to grow at 6.4 percent to reach Rs.2,97,964 crore in 2011-12 from Rs.2,79,932 crore in 2010-11,” the report compiled by the planning department said on the eve of budget presentation for ensuing fiscal (2012-13).
A year-on-year growth of 1.5 percent to 10.6 percent from 9.1 percent in the services sector has been the key driver of this fiscal’s GSDP growth as the industry sector growth is projected to decline to 3.6 percent due to adverse impact of the overall economic slowdown.
“The industry growth rate is estimated to decrease due to constraints in the mining and manufacturing sectors while the agriculture sector contracted by 2.9 per cent due to a decline in crop area following drought and floods,” the report said.
As a result, share of the farm sector to the GSDP this fiscal will decline one percent to 15.9 percent from 16.9 percent last fiscal while that of the services sector will increase 1.7 percent to 56.3 percent from 54.6 percent.
“The services sector has been the largest component of the state’s GSDP over the past few years. The annual average growth rate of the state’s services sector during the 11th five-year plan period (2007-12) has been 10.3 percent as against the target of 12 percent set by the Planning Commission,” the report pointed out.
The state’s foodgrain production is likely to be 12.42 million tonnes as against the target of 13 million tonnes owing to drought in major parts of the state and failure of kharif and rabi crop during this fiscal. Foodgrain production last fiscal was an all-time record of 13.98 million tonnes, comprising 12.42 million tonnes of cereals and 1.56 million tonnes of pulses.
The state government declared drought in 123 local bodies in 24 districts across the state in the month of October 2011.
“It is a matter of concern that, over the years, the contribution of the agriculture sector to the economy has been declining without a commensurate decline in the workforce deployed in agriculture,” the report noted.
The per capita GSDP at constant prices is expected to increase 5.4 percent to Rs.49,843 this fiscal from Rs 47,310 in 2010-11.
The state’s revenue resources will recover, with revenue receipts set to increase to 15.27 per cent from 14.49 per cent in 2010-11 (revised estimates).
The state’s fiscal deficit has reduced to 2.87 per cent in 2011-12 as compared to 3.23 per cent in 2008-09.