Karnataka's Economic Growth Surges Ahead of National Average

Karnataka remains a key driver of India’s economic growth, achieving an impressive GSDP growth of 10.2% in FY 2023-24, well above the national average of 8.2%, according to the Ministry of Statistics and Programme Implementation (MoSPI).

This remarkable performance comes despite significant challenges, including the worst drought in a decade and a slowdown in global IT markets.

Initially, the National Statistical Estimate (NSE) projected a modest GSDP growth of 4% for Karnataka; however, this figure was revised to an impressive 13.1% by the end of the fiscal year, highlighting an early underestimation of the state’s economic potential.

While the agriculture sector faced setbacks due to drought conditions, Karna­taka’s reliance on the IT and hardware sectors—representing 28% of its Gross State Value Added (GSVA)—made it susceptible to global economic fluctuations.

The Indian IT industry’s growth declined from 15.5% in FY 2022 to 8% in FY 2023, reflecting concerns over global recession and inflation. Nevertheless, Karnataka’s economy demonstrated resilience, attributed to strategic governance and a diversified growth approach.

For FY 2024-25, the NSE anticipates Karnataka’s GSDP growth at 9.4%, slightly below the national average forecast of 10.5%. However, the Ministry of Finance predicts a more optimistic 14% growth for the state, backed by strong fiscal indicators.

As of September 2024, Karnataka recorded a 10% year-on-year increase in GST collections and a 24% rise in stamp duty revenue, indicating a positive economic trajectory. Karnataka’s per capita GSDP ranks among the highest in the nation, comparable to Telangana.

Industry experts stress that Karnataka’s leadership in the IT sector and its ongoing ability to attract investments highlight its significant role in shaping India’s digital and economic landscape.