Bengaluru: Karnataka needs to provide greater impetus to the development of its manufacturing sector to calibrate its over dependence on the IT/ITes sector, according to Mr N K Singh, chairman of the 15th Finance Commission.
Speaking to reporters here on Tuesday, he said the state's growth rate of GSDP had fluctuated widely from 2012-23 to 2018-19 compared to the GDP of India. “The share of the tertiary sector in GSVA (current prices) of Karnataka is highest among all southern states and its main drivers in the state are IT and ITes,” he added, pointing out that Karnataka was home to the fourth largest technology cluster in the world and Bengaluru was known as the start-up capital of India, being home to nearly 30 per cent of start-ups in the country.
As for ease of doing business, Karnataka was at 8th place in 2017, he observed.
But it was a matter of concern, according to officials present, that the state’s buoyancy of non-tax revenue had plummeted from 1.30 in 2015-16 and 0.75 in 2017-18 to 0.38 in 2018-19. They noted that off-budget borrowings of the state had increased from Rs 1,853 crore in 2011-12 to Rs 13,173.44 crore in 2017-18 and the off-budget borrowings as a percentage of the state’s outstanding debt had risen from 1.80 per cent in 2011-12 to 5.65 per cent in 2017-18.
Noting that since 2017-18, the state government had announced three crop loan waiver schemes, requiring an estimated outgo of Rs 47,419 crore, the commission wanted a clarification from it on whether it had a long financially sustainable strategy to overcome agricultural distress and promote agricultural development in Karnataka....