Karnataka vows to become $1 trn economy by 2032

Bengaluru: Karnataka Chief Minister Basavaraj Bommai on Tuesday indicated to prepare an action plan for creating $1 trillion GDP for Karnataka.

He was speaking after launching the report 'Karnataka: A $1 Trillion GDP Vision' authored by economists TV Mohandas Pai and Nisha Holla of 3one4 Capital.

"Karnataka has demonstrated economic resilience during the Covid-19 pandemic and has taken several policy decisions to accelerate growth. We look forward with great optimism towards reaching the $1 trillion target and being an integral part of India's march towards $10 trillion this decade. As India reaches the $5 trillion target by 2026, we will take measures to grow faster than the all-India GDP and contribute substantially towards these goals. We are committed to increasing all our citizens' economic status and improving the quality of life and ease of living in Karnataka. I'm happy to release this report authored by TV Mohandas Pai and Nisha Holla of 3one4 Capital, on the vision for Karnataka to reach one trillion dollar this decade," the Chief Minister said.

Dr Shalini Rajneesh, Additional Chief Secretary to Government, Planning Department, remarked during the occasion, "The Planning Department's Economic Survey of Karnataka 2021-22 made a detailed analysis of the state's socio-economic condition. It incorporated inputs from subject-matter and domain experts, making it a truly inclusive and forward-looking survey. This new report encapsulates the learning's from the Economic Survey. It suggests policy measures and investment areas to accelerate economic growth post-pandemic and reach the golden target of $1 trillion GDP."

The report makes a detailed analysis of Karnataka with extensive data analytics. The findings suggest an asymmetry in the workforce-to-sector dependence in the symmetry. Generally, dependents on the services and industry sectors earn 5.1 times and 2.7 times what an agriculture-dependent earns, respectively. Populations in the north of the state earn much lower incomes than the south because of the heavy dependence on agriculture.

The content is prepared based on the Planning Department's Karnataka Economic Survey 2021-22 with additional analysis. The report presents a comprehensive analysis of Karnataka's socio-economic status. It explains various factors that have propelled Karnataka to consistently rank as one of India's Top -5 state economies. The state has the third highest GDP in FY 22, the highest per-capita income among the larger states, and 66 per cent of its economy comes from services. It also hosts robust agriculture and industry sectors. The report calls for a re-evaluation of the State's growth drivers in the light of the pandemic and the upcoming golden targets of reaching $500 billion GDP by 2026 and $1 trillion GDP by 2032, from the FY 22 GDP of $273 billion (Rs20 lakh crore). The state is one of India's foremost employment generators; EPFO data shows Karnataka produced 13.6 lakh formal jobs in FY 22, 11 per cent of India's total. Of this, 4.4 lakh were in the age group of 22-25 (new graduates), a 13 per cent of India's total.

Today, 10 per cent of Karnataka's population is over 60, projected to increase to 15 per cent in 2031. The state will soon have an aging population, supported by a gradually shrinking workforce, barring immigration. A social security net for the growing senior population combined with opportunities to build a highly skilled workforce that supports economic output while the population shrinks will be crucial as the state marches towards the $1 trillion GDP target by 2032.

Karnataka has demonstrated economic resilience during the Covid-19 pandemic and has taken several policy decisions to accelerate growth. We look forward with great optimism towards reaching the $1 trn target and being an integral part of India's march towards $10 trn this decade

- CM Basavaraj Bommai