Karnataka’s economy is likely to grow at 5.9 per cent in 2012-13 which is slightly low compared to 6.4 per cent in 2011-12.
The economic survey report, which was tabled in the Assembly on Thursday, stated that the state’s economy is expected to reach Rs 3,03,444 crore in 2012-13 as against Rs 2,86,410 crore in 2011-12.
The decline in the growth rate is attributed to the state’s economy being more open to external trade as compared to the national economy.
The silver lining of the state’s economic growth is in the agriculture and allied sector, which grew at a rate of 1.8 per cent in 2012-13 as against -2.2 per cent in the corresponding previous period, despite the drought.
The service sector which continues to be the key driving force in the state’s overall economic growth is pegged 8.9 per cent which is a shade low compared to last year’s 9.1 per cent.
The Industry sector, another key force of growth, is expected to decrease to 2.4 per cent from 3.6 per cent, owing to constraints in mining and manufacturing sectors.
The survey also reveals a marginal decrease in Gross State Domestic Product (GSDP) with the contribution of agriculture and allied activities and industry sectors from 16.1 per cent and 27 per cent in 2011-12 to 15.3 and 25.9 per cent respectively in 2012-13.
The Service sector, which has been the largest component of GSDP in Karnataka, witnessed a marginal increase from 56.9 per cent to 58.8 per cent.
The survey report also cautioned that the contribution of the agriculture sector to the economy has been declining continuously without the commensurate decline in the work force.
The report said that on account of the drought situation in 157 taluks of the state, low area coverage under Kharif and Rabi crops and loss of rain fed kharif crops was about 16.2 lakh hectares during 2012-13.
Hence, the state’s food grain production is likely to be 125 lakh tonnes as against the target of 136.55 lakh tonnes.