Karnataka is one of the foremost states in India, whose state economy currently ranks third in the country. The state has risen as an exemplar of harnessing 21st century growth engines using technology to drive socio-economic growth and development. The state is well-placed to become a Rama Rajya by 2047 with world-class development models and focused investments by successive governments.
A look at the state’s demographics indicate an ageing population. Its total fertility rate is currently 1.7, which is below the national average of 2.0. Global consensus has placed the replacement rate for emerging economies at 2.3 and for the developed world at 2.1. Karnataka’s population is already below replacement, barring immigration, which means that its current population of 6.66 crore will peak close to 7 crore in the 2030-2034 timeframe and reduce to 6.58 crore by 2047. The percentage of the population above 60 years of age will increase rapidly. Therefore, demography-wise Karnataka will soon resemble a developed nation and will require an adequate social security net.
On the economic front, models poin to Karnataka’s nominal GDP reaching Rs 333 lakh crore or US$ 2.12 trillion in 2047. This is considering a 3% depreciation of the rupee against the dollar and an economic growth at 8.5% CAGR. India after economic liberalisation grew from $275 billion in 1991 to $3.16 trillion in 2022, at 8.2% CAGR. While it is not far fetched to expect Karnataka to grow at this rate, maintaining this growth will require consistent investment and sound policies by successive state governments.
With explosive economic growth and levelling of its population growth, Karnataka’s per-capita GDP is set grow 8 times by 2047. From $4,060 in 2022, it could rise to $32,200 by 2047. This is, indeed, possible as already today, 66.3% of its economy is driven by the services sector with high value-add opportunities, consistent employment growth, and myriad expansion capabilities. The services sector in 2047 may grow to 75% of the state economy, with the balance 8-10% coming from agriculture and 15-17% from the industry sector.
Bengaluru is the jewel in the crown of Karnataka, contributing to a significant part of GSDP and taxes; its per-capita income is the highest among India’s cities. The city’s ecosystem ranks among the top 5 in the world for innovation, technology development, research and development, and human capital. It leads India’s IT, biotechnology, science, avionics, and space industries; in essence, is the Hi-Tech and Innovation capital of India. In 2047, Bengaluru will also have cemented its place as a global hub of innovation.
Moreover, Bengaluru and Karnataka have the potential to be the global model of an accelerated-growth strategy that is based on data analysis, the latest technologies, innovative urban planning, sustainable solutions and collaborative governance.
Clusters for sustainability
Karnataka must now invest in a vision to transform at least 10 new urban clusters and broad-base its economic growth. This will help sustain the state’s growth momentum. This vision calls for a balanced urban development by holistically leveraging the principles of density, proximity, and accessibility. The urban clusters are seen as potential regional drivers of economic growth as they harness the economic potential of neighbouring centres, and support the growth of domestic and international hubs. Integrating high-speed infrastructure for interconnectivity between clusters will further strengthen this regional development.
As these clusters develop and reap the benefit of economies of scale, they will strengthen their position as critical nodes, in turn contributing to the continued success of the economic corridors of the state. The economic corridors work on the principle of linking production centres, urban centres, and international gateways for export to facilitate efficient trade and investment. Improving access to markets by easing bottlenecks will help enhance the overall productivity and competitiveness of the region. The vision of these ten urban clusters presents an opportunity to synchronise Karnataka’s urban ecosystem and usher in a dynamic urban planning paradigm.
Urban expansion must go hand-in-hand with principles of sustainability. Karnataka must accelerate net-zero and water neutrality goals. Continued economic development means, for a period, certain pollution markers will increase. Initiatives of both the government and industry, and their successes must be tracked like the processes in mission-oriented war rooms. Scientific measurement protocols support phased adoption and measurement of performance against the goals set by the state, which will help the state to stay on course to achieve sustainable development.
Upgrade education
Ranked at the top on the NITI Aayog Innovation Index, Karnataka’s USP and core competence are its innovation and human capital. The state must protect, consolidate and secure its position for the future. It already houses the largest number of MNC R&D centres and research laboratories in the country. Looking ahead, we must upgrade the old, and build new, academic institutions specially focused on emerging technologies and research translation. This will help further the state’s credentials as India’s innovation hotspot.
Education and specialisation are two of the foremost drivers of human capital, innovation, and R&D. With the right policies and capacity building efforts today, all children in Karnataka in 2047 could expect to graduate from Class XII. About 75% of them could obtain a higher education degree, and the Gross Enrollment Ratio could rise to 70% in the 18-23 age bracket. Karnataka could produce 20,000 PhDs annually in its world-class institutions, and these graduates could work in the state-of-the-art research innovation ecosystem that Bengaluru already houses today.
Social security
Karnataka must focus on a comprehensive social security net for its vulnerable and ageing population. A pension system for different groups — old age, widows, and others— can be consolidated and disbursed from a single programme. Ayushmann Bharat can be leveraged for complete healthcare. The state must also work with civil society to weave old-age care into the fabric of the society, giving this segment a reasonable opportunity to live with dignity. With a declining population, a rise in nuclear families and increased mobility of youngsters, care for the elderly may become a daunting issue if the state does not act fast to institute a safety net.
Karnataka in 2047 will have world-class healthcare facilities in every one of its 30 districts, with a high-quality tertiary care in major urban areas. A multidisciplinary hospital with an attached medical college in each district will deliver state-of-the-art healthcare to people living in its districts.
Primary healthcare facilities and wellness centres will be within reach of every citizen in each taluk.
This vision of Karnataka 2047 is certainly achievable. It needs detailed strategies, focused investment, and improved governance.
(Prashanth Prakash is Chairman, Vision Group on Startups, GoK and Nisha Holla is Technology Fellow, C-CAMP)
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