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Karnataka’s new, yet daunting, journey to development

  • Published
    23rd May, 2023

Context:

Over a 35-year period, between August 1988 to May 2023, the State has had 18 different governments and was under President’s Rule four times. So, it is 22 different configurations across a 35-year period, leading to a not-so-healthy average of 18 months per configuration.

A trillion dollar economy goal

  • GDP growth: Karnataka aspires to become a trillion-dollar economy by 2032 and needs a 17%-18% Compound Annual Growth Rate in its Gross State Domestic Product (GSDP) to make this happen over the next decade while the current CAGR is around 13%.
  • Skewed economy: Its GDP is around $250 billion, but the distribution is skewed, with the bulk of the contribution from the services sector.
  • Deficits: Karnataka owes about ?4,000-plus crore to power generation companies. Also, various government departments owe about ?6,000-plus crore to various electricity distribution utilities. With the free power promise, these numbers can further deteriorate.

Skilling and reforms

  • Telangana model: Telangana offers a good model to emulate, where the Telangana Academy for Skill and Knowledge (TASK) has trained and deployed an over 1,80,000 skilled workforce in the electronics industry. Karnataka needs to do this in electronics, software etc.
  • Entrepreneurship university: It must establish a greenfield skills and entrepreneurship university with intense partnerships with the private sector, on the lines of the institutes of eminence
  • Private-public task: Karnataka has had a history of broadly successful private-public task forces such as BATF, the Karnataka IT and biotechnology vision groups, all aimed at channelizing private sector ideas and resources to enhance government effectiveness.

    On Agriculture

    • Agriculture policy: Karnataka should implement the agriculture start-up policy to engender better funding, develop incubation infrastructure including branding and marketing, foster industry partnerships, and provide sensible state support in the form of market-aligned incentives. 
    • Amend Cooperative societies Act: Karnataka needs to amend the Co-Operative Societies Act to permit some kind of a pari-passu charge to rocket ship agriculture credit which remains low.
    • Startup policy: Karnataka should have a modern start-up policy in line with the demands of the times. This should come among the first five priorities of the new government to make the sector, currently embattled, roar again. 
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