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Food output down by 15 lakh tonne

The economy of Karnataka, which has experienced political turmoil over the last three years, grew at 6.4 per cent over the year ending March 31, lower than that of the country’s growth rate of 6.9 per cent.

The growth rate projections, contained in the Economic Survey of Karnataka 2011-12 released on Tuesday, are advance estimates, and may change significantly when the final figures are released two years later.

The Survey says that due to global economic slowdown and wide-spread drought, agriculture and industry sectors in the State took a severe beating. Agriculture is expected to register an alarmingly negative growth of 2.9 per cent, compared with last year’s growth of 5.9 per cent. Foodgrain production is expected to be 124 lakh tonnes – a staggering 15 lakh tonnes less compared with the 2010-11 output. The growth of industry is expected to virtually halve -  from 6.9 in the last fiscal - to 3.6 per cent.

The Survey was circulated among the members of the legislature and the media.

The ruling party in the State appears to be blissfully oblivious of the omens, with its members engaged in a fratricidal battle for power. A large number of ruling party ministers and MLAs loyal to former chief minister B S Yeddyurappa kept away from the budget session of the State Legislature that commenced on Tuesday.

When Deccan Herald asked Rural Development minister Jagadish Shettar to comment, the senior BJP figure from north Karnataka appeared to be complacent.

“The economic situation at the national level is also grim. Compared with the Centre, Karnataka has done well.”

Deputy Chairman of State Planning Board Ramachandra Gowda refused to comment. “I do not want to comment on any developments. I have become aloof now. Though I am the Deputy Chairman of Planning Board, nothing comes to me,” he said.

Manufacturing and construction industries were the worst sufferers in the industry sector in Karnataka during the year ending March 31.

“The decline (in industry sector) can be largely attributed to the State’s economy being more open to external trade as compared to the national economy,” the Economic Survey of Karnataka 2011-12 released on Tuesday states.

The key driver for the growth in the current fiscal is service sector (IT and ITES), the growth of which has jumped from 9.1 per cent in 2010-11 to 10.6 in 2011-12.

The Gross State Domestic Product (GSDP) has increased to Rs 2.97 lakh crore from Rs 2.79 crore of the last year (at 2004-05 constant prices).

As far as the sectoral contribution to the GSDP, the primary sector’s share is expected to be 15.9 per cent, industry sector 27.7 per cent and 56.3 per cent share of service sector.

The economy appears to be again coming under the shadow of economic slowdown, after bouncing back to high growth trajectory in 2010-11 by clocking an impressive 8.2 per cent growth after being hit by two successive years of global economic slowdown.

All three ­­sectors of the economy had performed well.

Despite the slow down, the State’s finances were steady, with an estimated 15.16 per cent increase in the State’s own tax revenues.

This is largely due to improved tax to GSDP ratio, which is expected to be 10.1 per cent in the current year from 9.11 per cent of the last year.

The biggest worry to the government, however, is the declining non-tax revenue.

The survey, which has been released at the end of 11th Five Year Plan, has however noted that Karnataka has performed well in agriculture sector during the 11th Plan period and achieved an overall average growth rate of 5.7 per cent, against the Planning Commission’s target of 5.4 per cent.

The average growth rate of agriculture at the all-India level is 3.3 per cent.

Stunted growth

* Growth rate slumps to 6.4 pc from 8.2 pc last year.
* Economic slowdown and drought take their toll on agriculture & industry sectors.
* Agri sector worst hit with -2.9 pc growth compared to last year’s 5.9 pc.
* Foodgrains production to nosedive to 124.21 lakh tonnes from 139.86 lakh tonnes last year.
* Industry sector to grow by 3.6 pc against 6.9 pc in 2011.

BSY relents

The crisis in the BJP over the leadership issue eased on Tuesday with former chief minister B S Yeddyurappa relenting and deciding to attend the Budget session of legislature along with his supporters on Wednesday.