From Our Special Correspondent
Daijiworld Media Network
Bengaluru, Oct 18: Chief Minister Basavaraj Bommai on Tuesday released a book on ‘Karnataka: A $1 trillion GDP Vision’ published by Niti Aayog and State’s Planning Department.
The book is authored by former Infosys Executive and entrepreneur T V Mohandas Pai and Nisha Holla of 3one4 Capital and is based on State Planning Department’s Karnataka Economic Survey of 2021-22 with additional analysis by the Chief Minister.
Bommai released the book in the presence of Chief Secretary Vandita Sharma, Planning Department’s Additional Chief Secretary Dr Shalini Rajneesh, Finance Department’s Additional Chief Secretary I S N Prasad, Chief Minister’s Principal Secretary N Manjunath Prasad. The authors and representatives of FICCI Karnataka and McKensey and Senior Officers were also present.
The Chief Minister has indicated that the government will prepare an action plan for creating $1 Trillion GDP for Karnataka.
The report presents a comprehensive analysis of Karnataka's socio-economic status and explains various factors that have propelled the State 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 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).
The State is 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 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,’’ he said.
Dr Shalini Rajneesh, Additional Chief Secretary, Planning Department, remarked that 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,’’ she said.
The authors have suggested 9 Economic Strategies:
1. Amplify Agriculture sector value-addition through tech, branding, marketing and exports
2. Expand Manufacturing and Exports through labour-intensive industries (e.g. electrical, machineries, furniture)
3. Boost Construction sector value-addition through increased infrastructure spending
4. Beyond Bengaluru -Systematic Urbanization in 200 smaller towns
5. Expanding NITI Aayog’s Aspirational Districts Program
6. Specialized Hi-Tech Industries to drive high value-addition of manufacturing and exports industries
7. Invest in Bengaluru to become Global Hi-Tech City
8. Accelerate IT Services sector to build on feed forward capabilities and growth drivers
9. Invest in Start-up Ecosystem
The Chief Minister has provided following suggestions to expedite sectoral growth for achieving 1 trillion USD at the earliest:
• Regular review of the state progress to be carried out under the chairmanship of Additional Chief Secretary-Finance Department on preparing, monitoring and evaluating action plan for achieving US1 Trillion dollars.
• A vision group to be formed involving Chief Secretary, ACS to Planning Department, Mohandas Pai, Representatives from FICCI and Mckensey. Action plan to be ready by December 2022, to facilitate the outcome oriented targeted budget. We should be in sync with GOI target of 5 trillion with contribution of one trillion USD from Karnataka.
• Development of coastal corridor considering the enormous potential Mangalore port has for expansion to boost exports.
• Need to reduce infrastructure costs to promote infrastructure development
• Increasing borrowing capacities of people for promoting development
• Exploring the untapped potential of industry to stimulate employment and growth in industry as well as in agriculture and services sectors. Both Industry and private sector has to find out of the box solutions to break the traditional growth trajectory
The report is available to download on https://3one4capital.com// https://planning.karnataka.gov.in/english