Karnataka lags southern peers in eco growth

Despite having a per capita GDP of Rs 77,050, which is higher than the country average of Rs 69,497, Karnataka lags the all India average economic growth during the last five years. The state's GDP growth is the lowest amongst the four southern states, a World Bank official said.

According to Vinaya Swaroop, sector manager, economic policy & poverty group, South Asia Region, World Bank, Karnataka's average growth rate in GSDP was 5.9 per cent between 2007-08 and 2011-12. This is lower than other four southern states and all India average. Other states like Tamil Nadu and Kerala averaged 8.1 per cent each, Andhra Pradesh averaged 6.8 per cent, while the all India average was 7.2 per cent during the same period.

Some of the low-income states such as Bihar and Uttar Pradesh recorded an average GDP growth of 11.6 per cent and 6.7 per cent respectively during this period. Economic growth in Karnataka is primarily driven by services, while the industrial sector contributes only 18 per cent to overall growth compared to 24 per cent at the all India level, he said. Speaking at a panel discussion on the second day of the two-day Karnataka Economic Summit, organised by Bangalore Chamber of Industry and Commerce (BCIC), here on Tuesday, Swaroop said 20 per cent of the population in Karnataka continues to live below the poverty line. The decline in poverty during the 2000's has been slower compared to southern states. Karnataka accounts for 4.8 per cent of the country's poor.

"There could be an issue of weak implementation and relatively poorer governance in the state. In this context, has Karnataka done (and is doing) all it could do to achieve the goals of reducing poverty and sharing prosperity?" he asked. Speaking on the occasion, S L Rao, former director general, National Council of Applied Economic Research, said there is a need to encourage and push very hard to set up nuclear power plants in the coastal areas of the state.

He also advocated the policy of allowing panchayats in the state to manage and distribute power. "The agriculture growth in Karnataka is poor despite supplying free power to farmers. It is better to provide the subsidy to panchayats and make them manage the supply of power," Rao said. "There is also a need to induct professional managers to run the state-owned electricity supply companies like Bescom," he added instead of appointing IAS officers to run it which has a turnover of Rs 12,000 crore," he added.

He also advocated the concept of shutting down sick public sector companies instead of running them. "We need to move away from populism," he added.