Karnataka’s economy outpaces national growth despite global headwinds

Karnataka has registered GSDP growth of 10.2% in FY 2023-24, surpassing the national average of 8.2%

Karnataka has registered a robust Gross State Domestic Product (GSDP) growth of 10.2% in FY 2023-24, significantly surpassing the national average of 8.2%, according to data from the Ministry of Statistics and Programme Implementation (MoSPI).

Karnataka achieved this despite severe challenges, including the worst drought in a decade and a slowdown in global IT markets, the State Government informed on October 21.

Initial projection versus final numbers

Initially, the National Statistical Estimate (NSE) had projected a modest 4% GSDP growth for Karnataka, but this was revised to 13.1% by the end of the fiscal year, indicating early underestimation of the State’s economic performance.

The State’s agriculture sector faced negative growth due to drought conditions, while its dependence on the IT and hardware sectors — accounting for 28% of its Gross State Value Added (GSVA) — made it vulnerable to global economic downturns. The Indian IT industry’s growth, which slowed from 15.5% in FY 2022 to 8% in FY 2023, reflected global recessionary fears and inflation. “However, Karnataka’s economy remained resilient, thanks to strategic governance and diversified growth drivers,” according to the State Government.

For FY 2024-25, the NSE forecasts 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.

Per capita GSDP

‘Karnataka’s per capita GSDP remains among the highest in India, on par with Telangana, reflecting the strength of Congress-led governance in both States. The State Government’s pro-people policies, including its guarantees, have ensured that the benefits of growth reach all sections of society, fostering inclusive and equitable development’, according to the State Government.

The government claimed: “Karnataka’s success demonstrates the synergy between economic growth and social progress, making it a key engine of India’s economy. With its innovative policies, business-friendly environment, and ability to adapt to challenges, Karnataka stands as a model for sustainable development.”

The government stated: “Karnataka’s leadership in the IT sector and its continued ability to attract investments has made the State a major contributor to India’s digital and economic landscape.”

Published - October 21, 2024 11:26 am IST