The Hindu : Karnataka / Bangalore News : State registers low growth rate

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Wednesday, Jul 16, 2008
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Karnataka

Karnataka - Bangalore

State registers low growth rate

K.V. Subramanya

Economic Survey: 7 per cent growth against national average of 8.7 per cent

BANGALORE: Karnataka’s reputation of being in the forefront of economic growth in the country has taken a beating during 2007-08. The State has registered a low growth rate in the gross state domestic product (GSDP) compared to the national average.

According to the latest Economic Survey report (2007-08), prepared by the Planning, Programme Monitoring and Statistics Department, the State recorded 7 per cent overall real growth in GSDP during 2007-08 as against the national growth of 8.7 per cent.

Disappointing

While the agricultural sector has relatively fared better, it has been a disappointing show in the industrial and services sectors. Despite being one of the top five industrialised States in the country, the industry’s contribution to the State income has been 16 per cent, same as that of in 2006-07. However, the gross value added increased from 4.1 per cent in 2006-07 to 5 per cent in 2007-08.

One of the major reasons for lower industry output has been the decline in power production by 3.1 per cent (calculated up to December 2007).

While power generated from hydel sources decreased by 3.3 per cent, thermal power generation plummeted by 3.6 per cent. On the other hand, the registration of small-scale industries (SSIs) increased by 10.42 per cent. A total of 9,762 SSIs were registered with an investment of Rs. 805.63 crore, the report says.

More importantly, the rate of growth in the agriculture sector was 4.4 per cent, 1.8 per cent more than the national average of 2.6 per cent. The State’s rural population is 66 per cent (it is 72 per cent at the national level) and of that, 55.6 per cent has been classified as agricultural labourers.

“A good spell of rains ensured that the total area coverage under kharif crop was 74.31 lakh hectares in 2007, exceeding the target of 73.95 lakh. As a result, foodgrain production touched 11.7 million metric tonnes in 2007-08.

Inflation

The inflation in the State was more or less same as that in the rest of the country. The rate of inflation measured in terms of commodity price index (CPI) for industrial workers, non-manual employees and agricultural labourers was 3.8 per cent, 3.5 per cent and 6.7 per cent respectively, during March-October 2007 as compared to 5.62 per cent, .55 per cent and 6.21 per cent over the corresponding period in 2006.

Compared to the national movement of wholesale price index (WPI) indices, the rate of inflation in the State was higher only with regard to agricultural labourers.

Workforce

On the composition of the State’s workforce, the report says that the number of people dependent on primary sector have declined from 67.3 per cent in 2000 to 58.4 per cent in 2005.

However, employment in the secondary sector has increased from 12.8 per cent to 16.1 per cent and that of tertiary sector from 19.9 per cent to 25 per cent during the same period.

Labour relations

The report says that industrial relations during the year was “peaceful”. The number of strikes from April-November 2007 was three.

As many as 5,937 workers were involved in the strikes and this resulted in loss of 49,522 man-days. No incidence of lockout was reported.

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