Positive agricultural outlook to keep Karnataka economy growth steady: Report

The report said Karnataka's new Global Capability Centre policy 2024-29 can attract international companies specialising in technology, research and development.

Belagavi: Karnataka’s economic growth is likely to maintain a steady pace thanks to "positive outlook" in the agriculture sector, the government said in the mid-year review of state finances tabled in the Assembly on Tuesday.

Karnataka’s GSDP grew at 10.2 per cent in nominal terms for 2023-24.

The agriculture sector "has significantly picked up due to good south-west monsoon", the report said. "This will contribute to both supply and demand side factors behind GSDP growth," it added.

Nationally, inflation rate in has risen from 4.83 per cent in April to 5.49 per cent in September. "However, food inflation may come down in the upcoming months due to good kharif sowing and likelihood of good rabi season," the report said.

The report described Karnataka’s performance in the first-half of the fiscal as “exceptional” with the state registering a 13.8 per cent growth in revenue receipts compared with the corresponding period last year.

Karnataka expects more capital inflows with the state having attracted $3.5 billion of foreign investments in the first-half of the current fiscal, the report said.

"As the government has given great importance to development projects, our state will continue to receive more capital investments," the report said, adding that government expenditure on capital projects increased by 28.3 per cent in the first-half of the fiscal compared with the same period last year.

The report said Karnataka's new Global Capability Centre (GCC) policy 2024-29, which comes with incentives such as rent and tax breaks, can attract international companies specialising in technology, research and development.

“Additionally, Karnataka is actively promoting investments beyond Bengaluru, in cities like Mysuru, Mangaluru, Hubballi-Dharwad and Kalaburagi with the objective of diversifying its economic landscape,” the report said.

Revenue surplus

The report also said that “resource mobilization” and “effective expenditure management” has helped the state reduce revenue deficit. Revenue deficit is estimated at Rs 27,354 crore for the 2024-25 financial year. However, for the April-September period, the state has a revenue surplus of Rs 3,648 crore.

Borrowings

In the current fiscal, Karnataka has budgeted gross borrowings of Rs 1.05 lakh crore and repayment of Rs 24,974 crore. Up to September, the government has borrowed Rs 7,349 crore while incurring Rs 8,144 crore for loan repayment. The total liabilities of the state are expected to increase from Rs 5.81 lakh crore last year to Rs 6.65 lakh crore this fiscal.