The economy of the State of Karnataka is the 3rd largest in India, with a GSDP (Gross State Domestic Product) of $361 billion or $1.6 trillion PPP. It has a developed and diversified economy, and is home to one of the world’s largest and most important technology clusters.
With an overall GDP growth of 56.2% and a per capita GDP growth of 43.9% in the last decade, Karnataka surpassed many other states in India, pushing Karnataka's per capita income in Indian Rupee terms to sixth place. Karnataka received US$2,026.4 million worth of Foreign Direct Investment for the fiscal year 2008–09, placing it at the third spot among states in India. At the end of 2004, the unemployment rate of Karnataka was 4.57% compared to a national rate of 5.99%. For the fiscal year 2006–07 the inflation rate of Karnataka was 4.4%, which was less than the national average.
Between 2011-12 and 2017-18, the GSDP of the state grew at a Compound Annual Growth Rate (CAGR) of 13.11 per cent to reach 12.69 trillion (US$196.88 billion) and the net state domestic product (NSDP) grew at a CAGR of 12.83 per cent to reach 11.45 trillion (US$177.68 billion).
A fiscal year in Karnataka begins on 1 April of the previous calendar year and ends on 31 March of the year with which it is numbered.
Following Bengaluru Urban, the Dakshina Kannada (Mangaluru), Hubli-Dharwad, and Belagavi districts contribute the highest revenue to the state, respectively.
Agriculture and Livestock
Agriculture is the primary occupation of most of Karnataka's rural people. A total of 123,100 km2 of land is cultivated in Karnataka, constituting 64.60% of the total geographical area of the state. According to the 2001 census, farmers and agricultural labourers formed 56% of the workforce of Karnataka. Agriculture in Karnataka is heavily dependent on the southwest monsoon since the extent of arid land in the state is second only to Rajasthan. Only 26.5% of sown area (30,900 km2) is subjected to irrigation. The state has three agricultural seasons – Kharif (April to September), Rabi (October to December) and Summer (January to March).
Given below is a table of 2015 national output share of select agricultural crops and allied segments in Karnataka based on 2011 prices.2015 agricultural output of Karnataka based on 2011 prices Segment National Share % Mulberry 98.7 Coffee 92.7 Safflower 62.1 Ragi 59.2 Arecanut 58.6 Sunflower 55.2 Tamarind 32.4 Sericulture and Apiculture 28.9 Jowar 26.9 Horsegram 25.6 Sapota 24.6 Capsicum 19.9 Pomegranate 19.8 Water melon 19.7 Coconut 17.3 Grape 17.3 Floriculture 16.8 Narcotics 15.9 Wool and hair 14.8 Maize 14.5 Pepper 14.2 Cucumber 13.9 Condiments and spices 13.5 Sugarcane 10.7 Cashew nut 9.6 Arhar 9.4 Tobacco leaf 9.2 Tobacco stem 9.2 Fuel wood 8.4 Carrot 7.9 Tomato 7.2 Pineapple 7.1 Egg 6.7 Bean 6.6 Lemon 6.6 Pulse 6.5 Jackfruit 6.4 Turmeric 5.8 Cocoa 5.6 Groundnut 5.6 Marine fish 5.5 Ginger 5.4 Mango 5.4 Grass 5.2 Papaya 5.2 Rubber 5.1 Kitchen garden 5.0
Primary Crops grown in Karnataka The main crops grown are rice, ragi, jowar (sorghum), maize, and pulses (tur and gram) in addition to oilseeds and a number of other cash crops. Cashews, coconut, arecanut, cardamom, chili peppers, cotton, sugarcane and tobacco are also produced. Karnataka is the largest producer of coarse cereals, coffee, raw silk and tomatoes among the states in India. Horticultural crops are grown in an area of 16,300 km2 and the annual production is about 9.58 million tons. The income generated from horticulture constitutes over 40% of income generated from agriculture and it is about 17% of the state's GDP. In floriculture, Karnataka occupies the second position in India in terms of production; 700 tons of flowers (worth 500 million) were produced in 2004–05.
A majority of the thirty-five billion rupee silk industry in India is headquartered in Karnataka State, primarily in Mysore and North Bengaluru regions of Doddaballapura, the site of a planned 700 million "Silk City".
Education
Karnataka has one of the largest concentrations of higher education in India, including medical and engineering colleges. Apart from Bengaluru, places like Mangalore, Hubli-Dharwad, Mysore, Belagavi, Udupi, Tumakuru and Davanagere have been producing professionals for the Information Technology industry. Muddenahalli, in North Bengaluru, is the site of the upcoming Sri Sathya Sai Baba University and College of Medicine and a branch of the Visvesvaraya Institute of Advanced Technology. Devanahalli is set to be the location of a ₹95 billion Devanahalli Business Park, which will contain Aerospace Education Special Economic Zones, near the Bengaluru International Airport. Bengaluru is home to several educational and research institutions, including Indian Institute of Science, National Law School of India University, University Visvesvaraya College of Engineering, Ramaiah Institute of Technology, R.V. College of Engineering, PES University, Sir M. Visvesvaraya Institute of Technology, Indian Institute of Management, International Institution of Information Technology, Jain University, and Christ University.
Dharwad, in the northern part of the state, is another hub for education with several engineering colleges. It has institutions of national importance like AIIMS, IIT Dharwad, IIIT Dharwad, Dakshina Hindi Prachara Sabha, and the Karnataka Institute of Medical Sciences. Universities like Karnataka University, University of Agricultural Sciences Dharwad, Karnataka State Law University, KLE University, and SDM University are present in Dharwad & Hubballi City. A central university is present in Kalaburgi. These developments are set to contribute significantly to Karnataka's economy by creating jobs, expanding educational opportunities, and spurring infrastructure development. Manipal Academy of Higher Education is located in Manipal, Udupi city.
Industry
Karnataka became the manufacturing hub for some of the largest public sector industries of India after India's independence. Hindustan Aeronautics Limited, which is dedicated to research and development activities for indigenous fighter aircraft for the Indian Air Force, employs over 9,500 employees making it one of the largest public sector employers in Karnataka. India's national space agency, the Indian Space Research Organization, is headquartered in Bengaluru and employs approximately 20,000 people.
Other heavy industries such as National Aerospace Laboratories, Indian Telephone Industries, Bharat Earth Movers Limited, Bharat Electronics Limited, Hindustan Machine Tools and Indian subsidiaries of Volvo and Toyota, are also headquartered in Bengaluru. TVS Motors has a motorcycle manufacturing plant at Mysore and Tata Motors at Dharwad.
Karnataka houses several companies engaged in the manufacturing of electrical equipment and machinery, including Kirloskar, ABB, Kavika, and Larsen & Toubro. This sector is supported by the presence of the Central Power Research Institute in Bengaluru. Many multinational companies have set up their manufacturing units in Karnataka, such as BASF and Bosch.
The state owns sugar factories in the northern region, edible oil processing factories, pharmaceutical factories, textile processing centers, and steel producing facilities. The Vishwesharaiya steel plant at Bhadravati is run by Steel Authority of India Limited.
Minerals Gold, iron ore, quartz, limestone, manganese, kyanite and bauxite are some of the minerals that are found in Karnataka. After the closure of the Kolar Gold Fields mine, the only company in India that produces gold by mining and extracting it from the ore is Hutti Gold Mines Limited, with plants at Hutti and Chitradurga in Karnataka. The major mines of manganese and iron ore are located at Sandur in the Bellary district. Visweswaraiah Iron and Steel Ltd. at Bhadravathi and Jindal Vijayanagar Steel Ltd. at Toranagallu are engaged in the production of iron and steel. Indian Aluminium Company Ltd. (Hindalco) has an aluminum plant near Belgaum. Mysore Minerals Limited is in the mining and production of chromite industry in Hassan district. Rajashree Cements at Adityanagar, Vasavadatta Cements at Sedam and The Associated Cement Company Ltd. at Wadi are engaged in the production of cement. Uranium deposits have been found in Deshnur, a small village near Belgaum.
Lithium has been discovered in Karnataka's Mandya district 100 km from Bengaluru, becoming the nation's first known lithium reserves, so far confirmed at 1,600 tonnes.
Information and biotechnology
Karnataka is the leader in the information technology (IT) sector in India; its capital, Bengaluru, is known as the Silicon Valley of India. In the IT sector, Karnataka generated a total revenue of 516.5 billion in the financial year 2006–07 which included 487 billion from software exports and 29.5 billion from hardware exports. A total of 1973 companies in the state are involved in Information Technology-related business. While the bulk of the IT related companies are located in Bengaluru, some companies are located in Mysore and Mangalore as well. Bengaluru is also the headquarters of Wipro and Infosys which are among the top three IT companies in India in regards to market capitalization. The Nandi Hills area in Devanahalli outskirts is the site of the upcoming $22 Billion, 50 square kilometre BIAL IT Investment Region, one of the largest infrastructure projects in the history of Karnataka.
As of June 2006, Karnataka housed 55% of biotechnology related companies in India. Karnataka has over 6,800 scientists involved in biotech research. Out of twenty eight biotech companies that were registered in India in the year 2005–06, 27 were located in Karnataka. Bengaluru is also the home of the largest biocluster in India, having 158 of the 320 companies working on biotechnology in the country, with total revenues of 14 billion.
Over 400 Fortune 500 companies have offices in Karnataka.
Banking
Karnataka, particularly the coastal districts of Dakshina Kannada and Udupi, is sometimes called the "cradle of banking" in India. This is because seven of the country's leading banks, Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, Vysya Bank and the State Bank of Mysore originated in this state. The first five in the above list of banks were established in the districts of Dakshina Kannada and Udupi. These districts have among the best distribution of banks in India—a branch for every 500 persons. Between 1880 and 1935, twenty two banks were established in coastal Karnataka, nine of them in the city of Mangalore.
As of March 2009, Karnataka had 5,759 branches of different banks servicing the people of the state. The number of people served by each branch was 10,000 which was lesser than the national average of 15,000, thereby indicating better penetration of banking in the state.
Infrastructure
Roads The state is well connected to its six neighboring states and other parts of India through 14 National Highways (NH), which account for about six percent of the total NH network in India. Its district centers are linked through 114 State Highways (SH). The total road network of NH, SH, and district roads is approximately 207,379 km, of which 127,541 km (61.5 percent) is surfaced.
Road Type Road length (km)
National highways: 4,396
State highways: 28,311
District roads: 19,801
Ports Karnataka is served by both major and minor ports. New Mangalore Port (2010–11 data): Handled 67.30 million tonnes per annum (MTA) of total traffic, comprising 23.6 MTA in imports and 32.9 MTA in exports. The port accommodated 1,186 vessels, including 26 cruise vessels, generating US$65 million in revenue. Karwar Port (2007–08 data): Handled 2.7 MTA of total cargo, with total imports and exports reaching 6 MTA. It generated US$2.7 million in revenue and maintains 25 private liquid cargo tanks with a 75,000 MT capacity.
Airports