'Karnataka: A $1 Trillion GDP Vision' book launched

Bengaluru: A book on creating "Karnataka: A $1 Trillion GDP Vision" authored by Economists, T V Mohandas Pai and Nisha Holla of 3one4 Capital which is prepared based on the Planning Department's Karnataka Economic Survey 2021-22 with additional analysis was launched by Chief Minister Basavaraj Bommai on Tuesday. The CM has indicated to prepare an action plan for creating $1 Trillion GDP for Karnataka.

The report was launched in the presence of Vandita Sharma, Chief Secretary, I S N Prasad, Additional Chief Secretary and Development Commissioner, Dr. Shalini Rajneesh, Additional Chief Secretary, Representatives of FICCI Karnataka and McKensey and Senior Officers of the Government of Karnataka.

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% of its economy comes from services. It also hosts robust agriculture and industry sectors. Karnataka did exceptionally well during the pandemic years, despite the recessionary effect of the pandemic. The state government did well in handling the finances during this trying time and in giving economic sustenance to those in need. 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 USD 500 billion GDP by 2026 and USD 1 trillion GDP by 2032, from the FY 22 GDP of USD 273 billion (INR 20 lakh crore).

One of India's foremost employment generators

EPFO data shows Karnataka produced 13.6 lakh formal jobs in FY 22—11% of India's total. Of this, 4.4 lakh were in the age group of 22-25 (new graduates)—13% of India's total. Today, 10% of Karnataka's population is over 60, projected to increase to 15% in 2031.

The state will soon have an ageing 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 USD 1 trillion GDP target by 2032. This analysis is based on the conservative/achievable growth rates.

During the report launch, the Chief Minister Bommai said, "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 USD 1 trillion target and being an integral part of India's march towards USD 10 trillion this decade.

As India reaches the USD 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 from 3one4 Capital, on the vision for Karnataka to reach USD 1 Trillion this decade."

The Additional Chief Secretary to Government, Planning Department, Dr Shalini Rajneesh 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 learnings 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."

"Our report makes a detailed analysis of Karnataka with extensive data analytics. Our 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.

Authors have suggested nine economic strategies. At the end, Chief Minister of Karnataka has provided few suggestions to expedite the sectoral growth for achieving 1 trillion USD at the earliest.