Rajyotsava special: IT push to Karnataka's growth story

Karnataka, the eighth largest state in terms of geographical area, has outpaced every other state in the country in the economic growth over the last two decades, since the introduction of Information Technology (IT) policy way back in 1997, the first in the country.

Over the last two decades, Karnataka has recorded an impressive 17.3 times growth in its gross state domestic product (GSDP), thereby outpacing many other progressive states, according to data available with Central Statistical Organisation (CSO) and state economic surveys. Karnataka's GSDP stood at Rs 73,046 crore in 1997-98.

Other states like Maharashtra (12.79 times), and Tamil Nadu (13.8 times) have recorded much lower growth.

Karnataka's GSDP of the state stands at Rs 12,68,881 crore in 2017-18. The state's GSDP on current prices has grown 12.1% year-on-year against Rs 11,32,393 crore in 2016-17.

An analysis of the state’s economic growth trajectory conducted by DH on the occasion of the 63rd state formation day reveals that the entrepreneurial spirit of the state has spurred its growth over the years. This was possible after the state introduced its industrial and IT policies. Since then the state has emerged as the knowledge hub and startup capital in the country.

According to CSO, Karnataka's GSDP at current prices stood at Rs 6,210 crore in 1980-81. Over the next decade, the southern state’s GDP grew 3.85 times till the country witnessed liberalisation in 1991. The GSDP of Karnataka in 1991-92 stood at Rs 30,092 crore, as per the data.

However, the major impetus to state’s growth trajectory was in 1997, when the government introduced the first IT policy in the country. Since then the state's GSDP has grown 17.3 times. The steady growth has led to the state climbing to the 5th spot among the largest states in terms of economic growth in the country.

Over the last two decades, the state's capital Bengaluru has attracted a large number of multi-national corporations in the IT and technology area including several Fortune 500 companies. Bengaluru has become the fifth most preferred destination for global companies to set up their offices. Presently, Apple, Airbus, 3M, GE, IBM, Goldman Sachs, Visa, Uber, Toyota, Walmart, and Coca-Cola among others have made Bengaluru their base in India.

IT policy wasn't the only first by the state. In fact, in 2015, the state became the first to have its own startup policy, much before Prime Minister Narendra Modi launched the Startup India campaign. As of now, the state is among the top three startup hubs, globally.