Bengaluru: Karnataka's development in all sectors has taken a hit this year with the IT and services sector in particular seeing a 2% fall in growth rate in the fiscal year ending March 2017 as against the previous year. Other sectors, too, have been pulled down because of the central government's move to demonetise high-value currency notes last November.
The services sector, which includes IT services and hospitality, will grow at 8.5% as against 10.4% the previous year. The overall Gross State Domestic Product in 2016-17 grew at 6.9% as against 7.3% in 2015-16.
Agriculture, which has seen consecutive droughts in the last four cropping seasons, is estimated to grow by just 1.5%. The industry is expected to grow at just 2.2%, compared to 4.9% the previous fiscal.
The services sector that has seen a higher growth every year in at least the last eight fiscals is likely hit by a cascading effect of the decline in growth in other sectors, IT Minister Priyank Kharge told News18. "Karnataka is still better off than other states," he said.
The effect of demonetisation pulled down overall growth, Chief Minister Siddaramaiah said in his budget speech.
"Demonetisation caused a huge amount of distress to the public, but the Union goverment is yet to disclose what outcome has been achieved by it. The entire cooperative sector that is so critical in servicing the farmers and rural folk virtually came to a stand-still. The manager of implementation betrayed a lack of preparedness, with the banking system just not geared up for this…. The goal posts were changed mid-way and rules repeatedly modified," he said.
Revenues in the Stamps and Registration Department will also take a hit. While a target of Rs 9,100 crore was fixed earlier, there is a likely shortfall of Rs 1,350 crore as the number of registrations have come down at least 25% since November.
Siddaramaiah also said the decline in growth is reflective of what's being seen in the rest of the country. Overall growth in the country has fallen from 7.9 to 7.1 per cent, while industry sector has come down from a projected growth of 8.9 to just 5.8 per cent.
The services sector in the country too has come down from 9.8 per cent to 7.9 per cent.
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