Action plan to make Karnataka a $1 trillion economy: CM Basavaraj Bommai

Karnataka Chief Minister Basvaraj Bommai on Tuesday said a vision group would be constituted to draw up an action plan to make the state a $1 trillion economy.

Bommai said the action plan should be ready by December this year "to facilitate outcome-oriented, targeted budget". The CM also said that Karnataka should be in sync with the Union government's target of $5 trillion economy, with the state contributing $1 trillion.

The vision group was announced after Bommai received a report titled ‘Karnataka: A $1 Trillion GDP Vision’ authored by T V Mohandas Pai and Nisha Holla of 3one4 Capital.

The report underlined that Karnataka will be “an aging state with declining fertility” over the next decade, which is one of the many challenges it faces if it wants to become a $1 trillion economy by 2032.

About 10 per cent of the state’s population is aged over 60 and this is projected to increase to 15 per cent in 2031. "The state will soon have an aging population, supported by a gradually shrinking workforce, barring immigration,” a statement from the chief minister's office said, citing the report.

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The report said Karnataka must grow faster than India over the next ten years to reach $1 trillion. "The report calls for a re-evaluation of the state's growth drivers in the light of the pandemic and the upcoming golden targets of reaching $500 billion GDP by 2026 and $1 trillion GDP by 2032, from the FY22 GDP of $273 billion (Rs 20 lakh crore)," the statement said.

The report added that a social security net for the growing senior population combined with opportunities to build a highly-skilled workforce that supports economic output while the population shrinks will be crucial as the state marches towards the $1 trillion target.

Pointing out the state’s resilience during the pandemic years, the report stated that the state did exceptionally well during the pandemic years despite the recessionary effect of the Covid pandemic. “The state has done well in handling finances during this turbulent times and in giving economic sustenance to those in need.”

The report pointed out that Karnataka has the lowest higher education gross enrolment ratio (GER) in the south. It also flagged large disparity between north and south Karnataka - 10 poorest districts all up north. Plus, inadequate spending on the state’s growth drivers - industry and services sectors, and urban sectors is another challenge.