The bubble has burst. Former chief minister B.S. Yeddyurappa’s tall claims of making Karnataka the number one state in the country have remained on paper. The economic survey released by the government, paints a poor picture of the performance in two key sectors—agriculture and industry. The saving grace was the service sector which registered positive growth.
There has been a slowdown in agriculture and allied sectors (minus 2.9 per cent in 2011-12) which is attributed to a decline in crop area due to drought and floods. Industrial growth has declined to 3.6 per cent during 2011-12, largely due to the economic slowdown. “The growth of the service sector from 9.1 per cent in 2010-11 to 10.6 per cent in 2011-12 is a key reason for the growth of the GSDP (Gross State Domestic Product),” the survey said. The contribution of the services sector to GSDP has gone up from 54.6 per cent to 56.3 per cent.
The negative growth in agriculture and industry assumes significance with a series of big ticket events like the Global Investors Meet (GIM) coming up. The government cited the ban on mining and the overall slowdown in the manufacturing sector as the prime reasons for negative industrial growth. Similarly, an exclusive budget for agriculture seems to have failed in boosting the sector. It is obvious that spending money on populist schemes such as Suvarna Bhoomi, may help the party but not contribute to the overall development of the state. “A severe drought has led to the negative growth in sector,” the survey said.