The 8.9 percent growth of the IT-driven services sector growth is expected to boost Karnataka's economy in 2014-15, an official said on Monday.
"The healthy growth of the services sector, led by the software industry, to 8.9 percent from 8 percent year ago has bailed out the state, as the farm sector growth plunged to 4.5 percent this fiscal from 9.4 percent last fiscal," Finance Secretary I.S.N. Prasad told IANS.
With the industry sector's growth estimated at 4.4 percent as against 4.2 percent last fiscal, the gross state domestic product (GSDP) is likely to be 7.2 percent this fiscal as against 7 percent last fiscal.
"A three percent decline in food production has led to fall in the farm sector's growth. Preliminary estimates indicate that production will be 115-lakh tonnes against the target of 119-lakh tonnes due to long dry spell in June-July and excess rainfall in some parts of the state at the end the southwest monsoon in September," Prasad said.
In the budget for 2015-16, Chief Minister Siddaramaiah, who also holds the finance portfolio, however, told lawmakers that foodgrain production was likely to be 130 lakh tonnes despite drought and crop loss due to excess rainfall.
IT exports comprising software services and products is projected to be a whopping Rs.2 lakh crore from across the state, with Bengaluru accounting for 90 percent of it.
"The state accounts for 38 percent of the country's IT exports," Prasad noted.
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The IT industry in the state employs about a million (10 lakh) people directly and three million indirectly, as every technology job creates three indirect jobs.
Similarly, electronics and computer software accounted for 61 percent of the state's exports in last fiscal.
"Share of exports as percentage of GSDP has increased to 43 percent in last fiscal," Prasad noted.
The state is home to 2,500 IT firms including global software majors like Infosys and Wipro and multinationals such as IBM, Accenture, HP, Intel, Microsoft, GE and Texas Instruments among others.
According to the state's economic survey, a copy of which was tabled in the state legislature on Monday during the second day of the budget session, the GSDP at constant prices (2004-05) will grow seven percent to Rs.344,106 crore by this fiscal-end (March 31) from Rs.321,455 crore at last fiscal-end (2013-14).
"Per capita income at current prices is expected to be Rs.100,594 as against Rs.89,545 last fiscal, indicating 13.5 percent year-on-year (YoY) growth," Prasad said, citing the survey data.
The general index of industrial production (IIP) comprising mining, manufacturing and electricity sectors stood at 176, while the organized sector grew 3.7 percent YoY.
"About 26,000 micro, small and medium enterprises registered in the state and invested Rs.2,851 crore to provide jobs to 1,67,347 people last fiscal, indicating YoY growth of 7.3 percent, 32 percent and 7.6 percent respectively," Prasad said.