Karnataka Economy Updated Data- Must for KPSC Prelims and Mains Exam

Karntaka economy updates

The Gross State Domestic Product (GSDP)

GSDP of Karnataka for 2019-20 (at current prices) is estimated to be Rs 15,88,303 This is 13% higher than the revised estimate for 2018-19.

Total expenditure

Total expenditure for 2019-20 is estimated to be Rs 2,34,153 crore, a 7.7% increase over the revised estimate of 2018-19. In 2018-19, there is estimated to be a decrease of Rs 1,037 crore (0.5% of the budgeted estimate) of expenditure as per the revised estimate.  (Budget 2019)

Total receipts

Total receipts (excluding borrowings) for 2019-20 are estimated to be Rs 2,30,738 crore, an increase of 8.7% as compared to the revised estimate of 2018-19. In 2018-19, total receipts (excluding borrowings) are estimated to fall short of the budgeted estimate by Rs 1,506 crore (0.7%).  Budget 2019)

Revenue surplus

Revenue surplus for the next financial year is targeted at Rs 258 crore, or 0.02% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 42,051 crore (2.65% of GSDP).

Budget allocation for Infrastructure projects

An amount of Rs 2,300 crore has been earmarked towards Nava Bengaluru Kriya Yojana for the development of infrastructure within the city of Bengaluru.  Further, Rs 10,000 crore has been announced for the development of 7,940 km roads.(Budget 2019)



Per capita income

The per capita GSDP of Karnataka in 2017-18 (at current prices) was Rs 1,78,121.  This is 9% higher than that in 2016-17.

Crop loan waiver

An amount of Rs 12,650 crore has been announced for the provision of crop loan waivers.  Of this, Rs 6,500 crore has been allocated to commercial banks for the waiver of loans given to farmers, and Rs 6,150 crore to the co-operative sector. (Budget 2019)


According to the 5th Annual Employment-Unemployment Survey (2015-16), among the major states, Karnataka has the one of the lower unemployment rates in the country at 1.5% as compared to the all-India level of 5%. (Unemployment survey)

Capital expenditure

Capital expenditure for 2019-20 is proposed to be Rs 52,548 crore, which is an increase of 1.5% over the revised estimates of 2018-19.

Capital expenditure includes expenditure affecting the assets and liabilities of the state, such as: (i) capital outlay, i.e. expenditure which leads to creation of assets (such as bridges and hospitals), and (ii) repayment and grant of loans by the state government. Karnataka’s capital outlay for 2019-20 is estimated to be Rs 40,080 crore, which is 11.6% higher than the revised estimate of 2018-19. The capital outlay towards water supply, sanitation, housing and urban development is estimated to increase by Rs 3,239 crore (an increase of 92%) from the revised estimates of 2018-19. (Budget 2019)

Revenue expenditure

Revenue expenditure for 2019-20 is proposed to be Rs 1,81,605 crore, which is an increase of 9.6% over revised estimates of 2018-19. This expenditure includes payment of salaries, pensions, and interest, among others.  Revenue expenditure accounts for 78% of the total expenditure of 2019-20.

Tax to GSDP ratio

The own tax to GSDP ratio is targeted at 6.4% in 2019-20, which is marginally lower than the revised estimate of 6.8% in 2018-19. This implies that growth in collection of taxes has been marginally slower than the growth in the economy.

Revenue deficit

This is the excess of revenue expenditure over revenue receipts.  A revenue deficit implies that the government needs to borrow in order to finance its expenses which do not create capital assets.   However, the budget estimates a revenue surplus of Rs 258 crore (or 0.02% of GSDP) in 2019-20.  This implies that revenue receipts are expected to be higher than the revenue expenditure, resulting in a surplus.

The 14th Finance Commission had recommended that states should eliminate revenue deficits.  The 2019-20 estimates for Karnataka suggest that the state will meet this target of eliminating revenue deficit.

Fiscal deficit

This is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government, and leads to an increase in total liabilities.  In 2019-20, Karnataka’s fiscal deficit is estimated to be Rs 42,051 crore, which is 2.6% of the GSDP.

The estimate is below the 3% limit prescribed by the 14th Finance Commission.  This limit may be relaxed to a maximum of 3.5%, if states are able to contain their debt and interest payments to certain specified levels.

Education budget 

Karnataka has allocated 12.6% of its expenditure on education in 2019-20.  This is lower than the average expenditure allocated to education by other states (using 2018-19 BE). (15.9%)


Agriculture Sector

Government announced Grading of Organic and Zero budget farm produce, encouragement to grading and  packaging and branding units; 50% subsidy to eligible entrepreneurs and Start-up entrepreneurs with a grant of Rs.2 crore.

  • Grant of Rs. 145 crore to Israel model farming scheme.
  • The Grant of Rs.250 crore to Krushi Bhagya scheme. Direct cash transfer to millet growers: to encourage the millet farming with cash incentive of Rs. 10,000 per hectare under “Raitha Siri” scheme with a grant of Rs.10 crore.
  • A grant of Rs. 5 crore to encourage “Country chicken Poultry Farming” (Nati Koli Sakanike) for 10,000 unemployed poor youth.
  • Cooperative department – Establishment of a “Debt Relief Commission” in Karnataka after the Kerala model.


A grant of Rs.950 crore for “Ayushman Bharath – Arogyakara Karnataka” by the State and only Rs. 409 crore by the Central Government for the year 2019-20.

  • Establishment of D.N.B. Centres at 11 selected districts and taluk hospitals at a cost of Rs. 2 crore with a view to ameliorate the shortage of Specialists.
  • Sports Injury and Robotic Surgery: A grant of Rs. 10 crore for Sports Injury and Robotic Surgery facility at Sanjay Gandhi Institute of Trauma and Orthopedics, Bengaluru.
  • Mammogram and Papsmear Scanning facilities in 10 districts at Mangaluru, Tumakuru, Vijayapura, Chitradurga, Davanagere, Bagalakote, Chikkamagaluru, Haveri, Kolar andChikkaballapur at a cost of Rs. 10 crore.


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