Services buck slowdown trend in Karnataka agri, industry sectors

Services buck slowdown trend in Karnataka agri, industry sectors

Karnataka fared poorly in the industry, agriculture and allied sectors as drought, floods and overall economic slowdown took their toll in 2011-12 but services were the saving grace, according to the state's economic survey.

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There has been a slowdown in the agriculture and allied sectors (minus 2.9 per cent in 2011-12) attributable to a decline in crop area due to drought and floods, the survey said.

The growth rate of the industry sector is estimated to have decreased to 3.6 per cent during 2011-12, largely due to adverse impact of the overall economic slowdown. However, services "The significant growth rate of the service sector from 9.1 per cent in 2010-11 to 10.6 per cent in 2011-12 is a key driver of the growth in the current year's GSDP (Gross State Domestic Product)", the survey said.

Moreover, the contribution of the services sector in the composition of GSDP has gone up from 54.6 per cent to 56.3 per cent. Meanwhile, advanced estimates of Karnataka's GSDP at constant (2004-05) prices show that the state's economy is expected to grow 6.4 per cent and reach Rs 2,97,964 crore in 2011-12 (from Rs 2,79,932 crore in 2010-11).

During the Eleventh Five Year Plan (EFP), the state's economy has grown by a Compounded Annual Growth Rate (CAGR) of eight per cent, whereas India as a whole has grown by a CAGR of 7.9 per cent, according to the survey. The annual growth rate of the state's industry and service sectors during the EFP is expected to be 5.3 per cent and 10.3 per cent, respectively, as against the target of 12.5 per cent and 12 per cent, respectively, set by the Planning Commission.

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