Regional disparity must be reduced

The per-capita income of Karnataka at current prices is higher than the national average, says the state Economic Survey report, but on the flipside, it exposes the wide disparity in income distribution across the state. While the annual per capita income in Bengaluru is Rs 5,41,638, at least five districts of the northern parts of the state find themselves at the bottom of the list, with Kalaburagi faring most poorly at just Rs 1,00,446. This points to the uneven economic growth, which is largely centred around Bengaluru. The capital city’s IT industry and the allied services sector have emerged as the mainstay of the state’s economy, contributing 66.3% to the Gross State Value Added (GSVA). In FY21, the industrial sector’s share fell to 19.4% from 21.3%, while the contribution from agriculture jumped to 14.3% from 12.3% due to good monsoons and government subsidies. What is concerning, though, is that agriculture, on which the largest segment of the workforce in the state is dependent, contributes the least to the GSVA, which naturally has a direct impact on the income of those dependent on the farm sector.

The findings raise questions about the poor economic planning over the decades, leading to the lopsided development of the state. The promises to set up IT hubs in tier-2 cities and create greater employment opportunities across the state have evidently not materialised. Besides, the over-dependence on the IT sector is undesirable and a risk. The industrial sector, which took a hit most recently during the pandemic, received little help from the government in terms of budgetary support or a revival package. But the biggest worry comes from the agriculture sector, which has consistently been receiving huge budgetary outlays right from Independence but has not shown commensurate growth in the income of farmers. Karnataka has 64.6% of land cultivated, largely dependent on rainfall, with only 26.5% under irrigation. Farmers usually receive about 30% of the market price at which their produce is sold, or even lesser. The Survey recommends that there is a need to connect farmers to markets through technology to enable them to earn higher incomes.

It is a travesty that the legislature rarely debates such important issues. The government should set up a committee of economists and other experts to identify the faults, including the infirmities in the budget document, and recommend corrective measures. The state should ensure balanced development of not only different sectors but also of all districts so that the income disparity is not as glaring as it is now and some semblance of equality is brought about.