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  1. Ahead of Karnataka polls, a look at economic performance of the 3rd fastest growing state

Ahead of Karnataka polls, a look at economic performance of the 3rd fastest growing state

In just one month, Karnataka -- one the only four states ruled by the Congress -- will go into the polls, with India's largest political party, but an opposition here, the BJP fighting tooth and nail to claim Siddaramaiah's turf. Here's a look at the economic performance of the 3rd fastest growing state.

By: | Updated: April 11, 2018 1:33 PM
Karnataka polls: Congress vs BJP a look at economy In just one month, Karnataka — one the only four states ruled by the Congress — will go into the polls. (Image: FE)

In just one month, Karnataka — one the only four states ruled by the Congress — will go to the polls, with India’s largest political party, but an opposition here, the BJP fighting tooth and nail to claim Siddaramaiah’s turf. The battle between the Congress and the BJP in Karnataka is crucial to set the tone for the upcoming 2019 Lok Sabha elections. And while the political fight in India is often about wooing the voters with catchy slogans, fiery speeches, and narratives set by campaigns, even political pundits have not completely ruled out the role of economic performance as an X-factor in many elections in India.

Although, Karnataka has always been one of the prosperous states in the country and has shown strong macroeconomic fundamentals, here’s how its performance has been on different parameters between 2012 and 2016.

The third fastest-growing state economy

(Graph: Ind-Ra)

Karnataka’s Gross Domestic Product (GDP) grew at an average of 7.68%, which is the third fastest among 20 states included in a report published by Ind-Ra. Karnakata is behind Gujarat (10%) and West Bengal (8.30%) in terms of state GDP growth rate.

Fiscal deficit

In terms fiscal deficit, Karnataka has kept it restrained to 2.8% of the total state GDP, which could be seen as a good sign as even Gujarat (2.13%) and West Bengal (3.25%) have higher fiscal deficits. Only Maharashtra (1.56%), Odisha (1.18%) and Telangana (2.6%) have a fiscal deficit lower than Karnataka.

Education and health

And while Karnataka emerges as a topper in terms of GDP growth rate, when it comes to expenditure on education and health, it has not spent much on education as other states — both developed and backward.

(Graph: Ind-Ra)

With only a 15.3% of total expenditure on education, Karnataka is not only behind Gujarat and West Bengal but even states with a higher literacy rate such as Kerala and Himachal Pradesh. On health expenditure, it fares a little better but still behind nine states.

Expenditure on roads & bridges, power, and irrigation

On this indicator, Karnataka has maintained a fine balance between all with an average expenditure of 6.3%, 6.9%, and 6.8% on roads & bridges, power, and irrigation respectively, while in other states the expenditure has been too low, or one took precedence over the other.

Human Development Index

On Human Development Index, which includes life expectancy, per capita income etc, with an average score of 0.52 Karnataka is behind seven states — Kerala, Himachal Pradesh, Tamil Nadu, Haryana, Gujarat, Maharashtra and Punjab.

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