“The state achieved this feat despite severe challenges, including the worst drought in a decade and a slowdown in global IT markets,” said Chief Minister Siddarmaiah on Monday dismissing claims of stagnant growth of the state.
He clarified, backed with statistics, that the National Statistical Estimate (NSE) had underestimated Karnataka’s growth by projecting a modest 4% GSDP but revised it to 13.1% by the end of the financial year. This comes amid opposition BJP’s allegation of growth stagnating in the state.
The government also pointed out that Karnataka’s economy remained resilient despite the drought and impact on the IT and hardware sectors due to global economic problems such as the volatile US market and war in Ukraine.
“The state’s agriculture sector faced negative growth due to drought conditions. Karnataka’s dependence on the IT and hardware sectors—accounting for 28% of its Gross State Value Added (GSVA) also made it vulnerable to global economic downturns,” the CM said, adding that, the Indian IT industry’s growth slowed from 15.5% in 2022 to 8% in 2023, reflected global recessionary fears and inflation.
The government credited its strategic governance and diversified growth drivers for maintaining its growth pointers.Siddaramaiah taking to X said, “Karnataka’s per capita GSDP remains among the highest in the country, on par with Telangana, reflecting the strength of Congress-led governance in both states.” Justifying its spending on the much debated guarantee schemes, the Congress government said the benefits ensured growth reaches all sections of society, fostering inclusive and equitable development. “Thus, far from being a case of economic mismanagement, Karnataka is outperforming the national economy, driven by strategic investments, innovative policies, and a business-friendly environment. The state continues to be a leading engine of India’s economy,” the CM said. For 2024-25, the NSE forecasted Karnataka’s GSDP to grow at 9.4%, slightly below the national average projection of 10.5%. However, the Ministry of Finance projects a more optimistic 14% growth for the state, supported by strong fiscal indicators. “As of September 2024, Karnataka recorded a 10% year-on-year increase in GST collections and a 24% surge in stamp duty revenue, signalling a healthy economic trajectory,” the state government release noted.
Meanwhile the Deputy Leader of Opposition in the Assembly Arvind Bellad (BJP) disagreed with the CM’s claims and said Karnataka state’s GDP had always been ahead of the national average and there was nothing special about it. The data, he said, did not reveal any extraordinary initiative from the Congress regime to propel the state ahead.
These are signs of stagnant growth.” He added that there are numerous small and medium scale enterprises that have chosen other states because of the government’s “lack of focus,” he told ET.
