Soaring economy

The State has come a long way from the agrarian economy that it inherited in 1956.

in Bangalore

KARNATAKA, Indias eighth largest State in terms of geographical size (191,791 sq km) encompasses and mirrors everything that is the Indian subcontinent: diverse regions, cultures, languages and faiths; economic boom and agrarian crises; and a marked regional disparity in levels of human development. In terms of development, too, Karnataka is a typical Indian State, reflecting, generally, where the country as a whole stands.

With 53 million people, Karnataka accounts for 5.13 per cent of Indias population, the ninth largest among the States. While its sex ratio (965) stands above the all-India average of 933, the ratio for children under six declined from 960 in 1991 to 946 in 2001. Around 66 per cent of the States population lives in rural areas. The State has 1,67,378 km of well-knit motorable road, a 3,172-km rail network, important airports at Bangalore, Belgaum, Mangalore and Hubli, an all-weather cargo vessel handling seaport at Mangalore, and what will eventually become the biggest naval base this side of the Suez, the INS Kadamba at Karwar.

Karnataka is one of the most progressive and industrialised States in India and its capital Bangalore is also the countrys information technology (IT) and biotechnology capital. Rich in resources such as gold, iron ore, manganese, chromites, bauxite, china clay, granite, limestone and copper, Karnataka is also a tourists delight: the narrow coastal belt between the Western Ghats and the Arabian Sea, dominated by coconut groves and paddy fields; the Western Ghats or Malnad whose forests abound in coffee, pepper, rubber and cardamom plantations; and plateaus.

The southern plateau and its rolling hills are washed by the Cauvery, which originates in Kodagu, and its tributaries the Hemavathy and the Harangi. The less developed north is marked by the rich black cotton soil of the Deccan plateau. With meagre rainfall, the northern plateaus agriculture (chiefly jowar, cotton, oilseeds, sugar cane and pulses) is sustained by the Krishna and its tributaries the Malaprabha, the Ghataprabha, the Tungabhadra and the Bheema.

Karnataka, earlier known as Mysore, came into being on November 1, 1956, with the merger of five territories where Kannada was the main language; it has 27 revenue districts and 175 taluks. The State was carved out of four districts of the erstwhile Bombay State; three districts of the erstwhile princely state of Hyderabad; two districts and one taluk of the former Madras Presidency; the former Part C state of Coorg (now called Kodagu) and nine districts of the former princely state of Mysore. As a consequence of the amalgamation of regions of varying levels of socio-economic development and different political and administrative structures, the modern State inherited regional imbalances that still persist. Access to services in Karnataka largely depends on where one lives.

Unlike Mysore, the princely state of Hyderabad did not see much investment in human capital or in developing the region. As a result, the Hyderabad-Karnataka areas of the State are still worse off. A High Power Committee for the Redressal of Regional Imbalances (HPCFRRI) constituted in 2000 has identified 26 of the regions 28 taluks as being most or more backward; the other two have been classified as backward. Comprising Bidar, Gulbarga, Raichur and Bellary districts, this region has also been frequently devastated by droughts and famines. The Gazetteer of India gave vivid accounts of scarcity and famine conditions in the region from the 17th century onwards.

The Bombay-Karnataka region comprising Bijapur, Dharwad, Belgaum and Uttara Kannada districts, which were part of the erstwhile Bombay Presidency, and Bagalkot, Gadag and Haveri districts, which were added to it later, has a relatively better socio-economic climate: the HPCFRRI named 17 of its 31 taluks as most or more backward.

South Karnataka consists of 15 districts, most of which were part of the erstwhile princely state of Mysore and are still referred to as Old Mysore. Contrary to popular perception, this region is neither homogeneous nor uniformly prosperous. It is broadly classified into the coastal (Dakshina Kannada and Udupi), Malnad (Kodagu, Chikmaglur, Shimoga and Hassan) and plateau (Mysore, Mandya, Kolar, Tumkur, Chamarajnagar, Davangere, Chitradurga, Bangalore Rural and Bangalore Urban districts) areas. Whereas the Malnad and coastal areas have fared fairly well, the unirrigated plateau areas of the south, with the exception of the two Bangalore districts, remain relatively backward.

In terms of the extent of arid land, Karnataka is second only to Rajasthan.

Before Independence, the princely state of Mysore was reputed to be one of the most progressive regions of the country. A modern system of education was introduced here as early as 1833, with the opening of English schools in Bangalore, Tumkur, Hassan and Shimoga almost at the same time. The first school for girls was set up by the London Mission in Bangalore in 1840 when education for girls was still a novelty. The government girls school was started in 1881 with help from the Maharaja of Mysore. Mysore University was set up in 1916.

The importance given to education was reflected in literacy figures during the pre-Independence years: it was 20.3 per cent against the 16.6 per cent elsewhere in India. Basic health care was also one of the priorities of the governments of old Mysore and in 1806 it was arguably the first state in the country to take up vaccination against small pox. It 1930, Mysore became the first in the world to establish birth control clinics. A government hospital was set up in Bangalore in 1846 and the first public unit was opened in Mandya in 1929.

Ruled by benevolent maharajas and far-sighted dewans like C .Rangacharalu, K. Seshadri Iyer, Sir M. Visvesvaraya and Sir Mirza Ismail, Mysore established its Representative Assembly in 1887 when even the Presidencies did not have su ch bodies. In 1902, a hydroelectric power station was commissioned at Sivasamudram, another first in the country. Bangalore became the first Indian city to get electrification in 1905.

Bangalores salubrious climate and geographic location in the hinterland prompted Prime Minister Jawaharlal Nehru to locate major public sector enterprises such as the Indian Telephone Industries, Hindustan Machine Tools, Bharat Electronics, Bharat Earth Movers Limited and Hindustan Aeronautics Limited in the garden city. The location of a number of technical institutions, the Indian Institute of Science and research organisations has also been a boon for the States industrial sector, providing a continuous pool of talent.

For the State, the presence of these industries acted like a catalyst, creating industrial infrastructure and employment opportunities and leading to the setting up of hundreds of ancillary units and support facilities. According to the Karnataka Human Development Report (KHDR), 2005, which was brought out by the State government in 2006, the State witnessed the highest economic growth rate in terms of both Gross State Domestic Product (GSDP) and per capita GSDP during 1990-2001. Karnatakas income or Net State Domestic Product (at 1993-94 prices) increased from Rs.30,087.57 crore in 1990-91 to Rs.61,386.40 crore in 2001-02, registering an increase of 9.5 per cent per annum. During the same period, the per capita income increased from Rs.6,739 to Rs.11,516, an increase of 7.1 per cent.

The character of the States economy has changed over the years. In 1956, it was predominantly agrarian in character, but that changed significantly since 1980-81. According to the KHDR, the primary sector, which contributed about 60 per cent of the States GDP in 1960-61 (at 1980-81 prices) contributed only about 43 per cent in 1981; the figure subsequently declined to 26 per cent in 2001-02 (at 1993-94 prices). During the corresponding period, the share of secondary sector increased from 15.2 per cent to 23 per cent, and then to 26 per cent. The share of its tertiary sector from 24.8 per cent to 34 per cent and then, in 2001-02, to 48 per cent. Diversification is, of course, a characteristic of a modern economy. However, it is a matter of concern that the size of the States workforce dependent on the primary sector is not commensurate with the sectors share in the GDP.

Karnatakas GDP grew by 8.7 per cent during 2005-06. Though agriculture continues to be the mainstay of the people, Karnataka, which has been a pioneer in industrial development, now stands sixth among the States in terms of output. Thanks to cordial labour relations, proactive government policies and a rich talent pool, the State has become a favoured destination for domestic and overseas industrialists and entrepreneurs who have set up manufacturing facilities in automobiles, machine tools, electronic components, pharmaceuticals and garments across the State. According to the Economic Census 1998, there were 19.12 lakh enterprises in the State engaged in economic activities other than crop production. While the number of persons usually working in these enterprises was 52.53 lakh, Karnataka accounted for 8 per cent of the all-India enterprises, and 8.15 per cent of the total usually working employment. Also, while the State accounts for around 20 per cent of Indias turnover in the electronics and communication equipment sector, the automobile segment generates about Rs.2,000 crore.

But Karnatakas biggest success story in recent years has been the growth of knowledge-based industries information technology (IT) and biotechnology. The State accounts for approximately 37 per cent of Indias IT and IT-enabled Services (worth Rs.50,000 crore). Around 40 per cent the countrys biotech firms are located in Karnataka.

Fifty-six per cent of Karnatakas workforce still derives its living from the land, either as cultivators or as agricultural labourers. But with agriculture highly dependent on rain (only 25 per cent of net area sown is irrigated), farm output is at the mercy of the South-West Monsoon. In recent years, Karnataka has been hit by severe droughts and flash floods.

Karnatakas agriculture is marked by crop diversification. A slew of measures, including more funds for irrigation and hastening of construction works, has pushed up the extent of Karnatakas net irrigated area from 7.6 lakh hectares in 1957-58 to 26.4 lakh ha in 2000-01. While the State has estimated the irrigation potential from all sources at 55 lakh ha, the potential created until 2003-04 was 30.61 lakh ha.

The State has taken steady steps in the direction of universal literacy: the literacy rate increased from 56.04 per cent in 1991 to 66.64 per cent in 2001, with the female literacy rate moving faster than the male rate. Though Karnatakas literacy rates have been consistently higher than the all-India average, it is still to catch up with neighbouring States like Kerala (90.9), Tamil Nadu (73.5) and Maharashtra (76.9).

Although better than the all-India averages, Karnataka still has a long way to go before it can claim to have provided health for all. Life expectancy at birth has increased to 65.8 years in 2001, the decadal population growth rate has declined to 17.5 per cent. Mortality rates at infant (52 per 1000 live births), neonatal (37.1 per 1000), child (19.3 per 1000) and maternal (195 per lakh) stages have shown a downward trend.

Karnataka is also likely to achieve the Tenth Plan objective of reducing maternal mortality rates to 2 per 1000 births by the end of 2007. It ranks third among the States in its health expenditure, the per capita expenditure being Rs.238.38. There is one doctor for every 3,240 people.

Going by the methodology advocated by the United Nations Development Programme, which measures the core dimensions of human development health, education and income Karnatakas Human Development Index is much higher than the all-India average. Among the States it ranks seventh, while at the international level it stands at 120 (India is at 127). The States attainment of human development is on a par with that of Egypt.