Economy of Karnataka

Karnatakais one of the highest economic growth states inIndiawith an expectedGSDP(Gross State Domestic Product) growth of 9.5% in the 2021–22 fiscal year.The total expected GSDP of Karnataka in 2022–2023 is about $240 billion.Karnataka recorded the highest growth rates in terms of GDP and per capita GDP in the last decade compared to other states. In 2008–09, thetertiarysector contributed the most to GSDP (US$31.6 billion─55 percent), followed by thesecondarysector ($17 billion─29 percent), and theprimarysector (US$9.5 billion─16 percent).
With an overall GDP growth of 56.2% and aper capita GDPgrowth of 43.9% in the last decade, Karnataka surpassed all other states in India, pushing Karnataka's per capita income in Indian Rupee terms to sixth place.Karnataka received US$2,026.4 million worth ofForeign Direct Investmentfor the fiscal year 2008–09, placing it at the third spot among states in India.At the end of 2004, the unemployment rate of Karnataka was 4.57% compared to a national rate of 5.99%.For the fiscal year 2006–07 the inflation rate of Karnataka was 4.4%, which was less than the national average.
Between 2011-12 and2017-18, the GSDP of the state grew at a Compound Annual Growth Rate (CAGR) of 13.11 per cent to reach₹12.69 trillion (US$196.88 billion) and the net state domestic product (NSDP) grew at a CAGR of 12.83 per cent to reach₹11.45 trillion (US$177.68 billion).
Afiscal yearin Karnataka begins on 1 April of the previous calendar year and ends on 31 March of the year with which it is numbered.
AfterBengaluru Urban,Dakshina Kannada (Mangaluru)Hubli-Dharwad andBelagavidistricts contribute the highest revenue to the state respectively.
Agriculture is the primary occupation of most of Karnataka's rural people. A total of 123,100 kmof land is cultivated in Karnataka, constituting 64.60% of the total geographical area of the state.According to the 2001 census, farmers and agricultural labourers formed 56% of the workforce of Karnataka.Agriculture in Karnataka is heavily dependent on the southwestmonsoonsince the extent of arid land in the state is second only to Rajasthan.Only 26.5% of sown area (30,900 km) is subjected toirrigation.The state has three agricultural seasons –Kharif(April to September),Rabi(October to December) and Summer (January to March).
Given below is a table of 2015 national output share of select agricultural crops and allied segments in Karnataka based on 2011 prices
The main crops grown are rice, ragi, jowar (sorghum), maize, and pulses (tur and gram) in addition to oilseeds and a number of other cash crops.Cashews, coconut,arecanut,cardamom,chillies, cotton, sugarcane and tobacco are also produced. Karnataka is the largest producer of coarse cereals,coffee,raw silkand tomatoes among the states in India. Horticultural crops are grown in an area of 16,300 kmand the annual production is about 9.58 million tons.The income generated from horticulture constitutes over 40% of income generated from agriculture and it is about 17% of the state's GDP.In floriculture, Karnataka occupies the second position in India in terms of production and 700 tons of flowers (worth₹500 million) were produced in 2004–05.
A majority of the thirty-five billion rupee silk industry in India is headquartered in Karnataka State, primarily inMysoreand North Bengaluru regions ofDoddaballapura, the site of a planned 700 million "Silk City".
Karnataka has one of the largest concentrations of higher education including medical and engineering colleges. Apart from Bengaluru, places likeMangalore,Hubli–Dharwad,Mysore,Belagavi,Udupi,TumakuruandDavanagerehave been producing professionals for the Information Technology industry.Muddenahalli, in North Bengaluru, is the site of the upcoming Sri Sathya Sai Baba University and College of Medicine and a branch of theVisvesvaraya Institute of Advanced Technology.Devanahalliis set to be the location of a 95 billion Devanahalli Business Parks, which will contain Aerospace Education Special Economic Zones, near the Bengaluru International Airport. The North Bengaluru region is set to be a premier educational hub of Karnataka. There are many prestigious educational and research institutions inBengalurusuch asIndian Institute of Science,National Law School of India University,University Visvesvaraya College of Engineering,Ramaiah Institute of Technology,R.V. College of Engineering,PES University,Sir M. Visvesvaraya Institute of Technology,REVA University,Indian Institute of Management,International Institution of Information Technology,Jain Universityetc.
Dharwad in the northern part of the state is another hub for education with several engineering colleges With National importance institutions like AIIMS,IIT Dharwad, IIIT Dharwad, Dakshina Hindi Prachara Sabha, Karnataka Institute of Medical Sciences (KIMS) and Universities like Karnataka University, University of Agricultural sciences Dharwad, Karnataka State Law University, KLE University, SDM University are present in Dharwad & Hubballi City, hence called Education Hub and a central university is present in Kalaburgi.These developments are set to contribute significantly to Karnataka's economy by creating jobs, expanding educational opportunities, and spurring infrastructure development.Manipal Academy of Higher Educationis one of the best universities present inManipal,Udupicity. With many great and prestigious InstitutionsKarnatakahas been the Educational Hub of India.
Karnataka evolved as the manufacturing hub for some of the largestpublic sectorindustries of India after India's independence.Hindustan Aeronautics Limited, which is dedicated toresearch and developmentactivities for indigenousfighter aircraftfor theIndian Air Force, employs over 9,500 employees making it one of the largest public sector employers in Karnataka.
Other heavy industries such asNational Aerospace Laboratories,Indian Telephone Industries,Bharat Earth Movers Limited,Bharat Electronics Limited, Hindustan Machine Tools and Indian subsidiaries ofVolvoandToyotaare also headquartered in Bengaluru. India's national space agency, the Indian Space Research Organization, is headquartered in Bengaluru and employs approximately 20,000 people.
TVS Motors has a motorcycle manufacturing plant at Mysore and Tata Motors atDharwad. Karnataka state has many companies engaged in the manufacturing of electrical equipment and machinery likeKirloskar,ABB Group, Kavika,Larsen and Toubroetc. This may be due to the location of theCentral Power Research Instituteat Bengaluru. Many multinational companies have set up their manufacturing units in Karnataka such asBASF, andBosch.
The state owns sugar factories in the northern region, edible oil processing factories, pharmaceutical factories, textile processing centers, and steel producing facilities. Vishwesharaiya steel plant atBhadravatiis run by SAIL.
Lithium has been discovered in Karnataka's Mandya district which is 100 km from Bengaluru, becoming the Nation's first-ever Lithium reserves so far confirmed at 1,600 tonnes.
Gold, iron ore, quartz, limestone, manganese,kyaniteand bauxite are some of the minerals that are found in Karnataka.After the closure of theKolar Gold Fieldsmine, the only company in India that produces gold by mining and extracting it from the ore isHutti Gold Mines Limitedthat has plants atHuttiandChitradurgain Karnataka.The major mines of manganese and iron ore are located atSandurinBellary district.Visweswaraiah Iron and Steel Ltd. atBhadravathiand Jindal Vijayanagar Steel Ltd. at Toranagal are engaged in the production of iron and steel. Indian Aluminium Company Ltd. (Hindalco) has an aluminum plant near Belgaum.Mysore Minerals Limited is in the mining and production of chromite industry inHassan district.Rajashree Cements at Adityanagar, Vasavadatta Cements atSedamand The Associated Cement Company Ltd. atWadiare engaged in the production of cement.Uranium deposits have been found in Deshnur, a small village near Belgaum.
Karnataka is the leader in the information technology sector in India and its capital, Bengaluru, is known as theSilicon Valley of India. In the IT sector, Karnataka generated a total revenue of₹516.5 billion in the financial year 2006–07 which included₹487 billion from software exports and₹29.5 billion from hardware exports.A total of 1973 companies in the state are involved in Information Technology-related business.While the bulk of the IT related companies are located in Bengaluru, some companies are located in Mysore and Mangalore as well. Bengaluru is also the headquarters ofWiproandInfosyswhich are among the top three IT companies in India in regards tomarket capitalization.TheNandi Hillsarea inDevanahallioutskirts is the site of the upcoming $22 Billion, 50 square kilometreBIAL IT Investment Region, one of the largest infrastructure projects in the history of Karnataka.
As of June 2006, Karnataka housed 55% ofbiotechnologyrelated companies in India.Bengaluru is also the home of the largest biocluster in India with total revenues of₹14 billion and having 158 of the 320 companies working on biotechnology in India.Karnataka has a headcount of over 6,800 scientists involved in biotech research and out of twenty eight biotech companies that were registered in India in the year 2005–06, 27 were located in Karnataka.
Karnataka, particularly the coastal districts ofDakshina KannadaandUdupi, is sometimes called the "cradle of banking" inIndia.This is because seven of the country's leading banks,Canara Bank,Syndicate Bank,Corporation Bank,Vijaya Bank,Karnataka Bank,Vysya Bankand theState Bank of Mysoreoriginated in this state.The first five in the above list of banks were established in the districts of Dakshina Kannada and Udupi. These districts have among the best distribution of banks in India—a branch for every 500 persons.Between 1880 and 1935, twenty two banks were established in coastal Karnataka, nine of them in the city of Mangalore.
As of March 2009, Karnataka had 5,759 branches of different banks servicing the people of the state.The number of people served by each branch was 10,000 which was lesser than the national average of 15,000, thereby indicating better penetration of banking in the state.
The state is well connected to its six neighboring states and other parts of India through 14 National Highways (NH); it accounts for about six percent of the total NH network in India.
Its district centers are linked through 114 State Highways (SH)
The total road network of NH, SH, and district roads is about 2,07,379 km, of which 1,27,541 km is surfaced (61.5 percent)
Road Type Road length (km)
National highways: 4,396
State highways: 28,311
District roads: 19,801
New Mangalore Port(2010–11).
Total traffic handled: 67.30 MTA.
Total imports handled: 23.6 MTA.
Total exports handled: 32.9 MTA.
Number of vessels: 1,186
Cruise vessels: 26
Revenue: US$65 million
Karwar Port (2007–08)
Total cargo handled: 2.7 MTA
Total imports and exports: 6 MTA
Revenue: US$2.7 million
25 Private liquid cargo tanks: 75,000 MT
>Railway network of 3,172 km
>South Western Railway covers almost part of Karnataka and its headquarter is at Hubballi
SSS Hubballi Junction's Platform 1 is the "World's Longest Platform" and also holds the Guinness World Record!
>There are three divisions in SWR
There are two Railway Heritage Museums in Karnataka :
Urban transport
Metro rail and suburban-rail projects are underway in Bengaluru. The first phase of the Namma Metro is complete and covers a total of 42.3 km. Second phase is in testing phase.
Hassan–Sakhleshpura–Mangalore line gauge conversion is completed. Both freight and passenger trains run on this route on a daily basis connecting the seaport city of Mangaluru to the state capital of Bengaluru and Mysuru.
Key connectivity projects, doubling of Mysore–Bengaluru railway line, Gadag–Bagalkot, Bengaluru–Hassan to be taken up in the near future.
Generation:Karnataka Power Corporation Limitedand IPPs (GMR/Jindal/ Bhoruka)
KPCL has an installed capacity of over 9315 MW.
Number of consumers: 16.3 million
Independent power producers have installed capacity of 2,005 MW.
Transmission: Karnataka Power Transmission Corporation Limited (KPTCL).
Area covered: 192,000 km
Sub stations: 1,205
Transmission lines: 28,000 km, 33 kV, 130,000 km of 11 kV.
LT lines: 451855 km
Distribution transformers: 1,50,000
Physical infrastructure – power
Distribution/supply: Electricity Supply Companies (ESCOMs)
Bangalore Electricity Supply Company (BESCOM)
Mangalore Electricity Supply Company (MESCOM)
Hubli Electricity Supply Company (HESCOM)
Gulbarga Electric Supply Company (GESCOM)
ChamundeshwariElectric Supply Corporation (CESC)
Source: Power sector at a glance as in July 2009‖, Karnataka Power Transmission Corporation Limited website, accessed 23 September 2009.
Leading telecom companies in the sectors of telecommunication network, basic telephony services (both wire line and wireless) and networking services for telecommunication equipment are operating in the state.
The entire State is networked via Optic FibreCables (OFC) by the state-run BSNL (formerly DOT) as well as private companies like Bharti, Reliance, VSNL and TATA Tele Services.
Last Mile Access is provided by BSNL as well as TATA Tele Services in various parts of the state. Bhartiand Reliance Communications provide the Last Mile Access directly to the customer in all major cities in Karnataka.
Seven new telephone exchanges were opened in 2007–2008.
Telecom service providers in Karnataka.
BSNL, BhartiAirtel, Reliance Communications, Vodafone Essar, Spice Communications, Tata Teleservices Ltd.
Key statistics (2007–08)
Cellular subscribers: about 10 million
Internet/broadband
Subscribers: about 0.8 million
Telecom towers: about 14,000
Post offices: 9,826
Telephone connections provided: 2,610
Telephone exchanges: 2,727
Karnataka Industrial Area Development Board (KIADB) and Karnataka State Industrial Investment Development Corporation (KSIIDC) are jointly responsible for the development of industrial infrastructure in the state.
Directorate of Commerce and Industries has set up a district andtalukindustrial centres across the state to facilitate investment
The Government of Karnataka is promoting the development of several SEZs across Karnataka such as pharma and biotech SEZ, food processing and agro-based industries and textiles SEZ at Hassan and IT and Coastal SEZs at Mangalore.
Key industrial clusters
IT/ITES cluster in electronic city and Whitefield (Bengaluru).
Food Parks – 4 old State sponsored and 2 new MoFPI sponsored Food Parks in 6 Districts of Karnataka
Biotech park/cluster in electronic city, Bengaluru.
Integrated Food Parks in Hiriyur, Bagalkote, Jewargi & Malur for pay-n-use common facilities & MSME Food Processing Manufacturers
Machine tool cluster at Peenyaindustrial estate
Textile cluster at Doddaballapur
Foundry cluster at Belgaum
Industrial valve cluster at Hubli–Dharwad
Coir clusters at Hassan.
Handicrafts cluster at Channapatna.
Coffee production and processing cluster in Madekeri
SEZs in Karnataka
Notified: 27
Formal approvals: 52
In-principle approvals: 9
Source: StatewiseSEZs in India, www.sezindia.nic.in. accessed 23 September 2009
The water supply is provided by the local authorities like municipalities andpanchayats. The first hydroelectric plant in the state was built atShivanasamudra Fallson theKaveri Riverin 1902.
Karnataka has an installed capacity of 27 gigawatts (GW) of electricity, of which 12 GW comes from renewable energy sources.The state is India's top producer of solar energy, with an installed capacity of 5.16 GW.
Karnataka Power Transmission Corporation Limited (KPTCL) is the sole provider of electricity for the state. The Linganamakki reservoir will supply around 35 percent of power to the state. Electric power from KPTCL is distributed through distribution companies like Bangalore Electricity Supply Company (BESCOM), Mangalore Electricity Supply Company (MESCOM), Gulbarga Electricity Supply Company (GESCOM), Hubli Electricity Supply Company (HESCOM) and Chamundesvary Electricity Supply Company (CESCOM) for different parts of the state. A good number ofwindmillswere present. TheRaichur Thermal Power Stationand Near Bellary (Kuduthini). Karnataka is also the location of companies likeSELCO (India), which is promoting the use ofsolar electricityamong the rural areas of the state and is also a twice winner of theAshden Awards.