Promises to keep, miles to go: Can Karnataka’s new government think out of the box?

Published : Jun 02, 2023 16:22 IST - 13 MINS READ One question being discussed intensely since the Congress’ sweeping win in the Karnataka Assembly election is whether the State’s finances will be capable of shouldering the burden of welfare measures promised in the party manifesto. This is expected to continue; even the Centre’s Economic Survey had said that Karnataka could see a decline in Central tax transfers by about 24.5 per cent between 2021-22 and 2025-26. Bengaluru city, for example, can contribute much more to the Bruhat Bengaluru Mahanagara Palike’s own source revenue, which currently forms about 63 per cent of its total receipts of Rs.11,163.97 crore, with the rest coming from State and Central grants. Karnataka’s Net State Domestic Product actually grew from Rs.14,67,522 crore in 2019-20 to Rs.15,75,400 crore in 2020-21, according to the Ministry of Statistics and Programme Implementation, registering a positive growth of 7.35 per cent at current prices even during a pandemic year. A historical analysis of Karnataka’s growth over three decades between 1990 and 2020 that we undertook showed that the contribution of the tertiary sector—services also, including IT but not limited to it—to the State’s GSDP grew from 44 per cent in 1993-94 to 64 per cent in 1919-20, while the primary sector’s contribution declined from 32 per cent to 11 per cent, and that of the secondary sector remained constant at 25 per cent during the same period.