Buoyancy in agriculture and manufacturing seems to have lifted Karnataka from its economic lows. The state is expected to touch a growth rate of 8.2% for the 2010-11 fiscal as against 5.2% recorded in 2009-10. However, the state's growth rate still lags behind the national average, as it has been from fiscal 2008-09.

The Economic Survey of Karnataka 2010-11 says that the advanced estimate of Gross State Domestic Product (GSDP) is expected to grow by about 8.2% during 2010-11, mainly attributable to higher growth of primary and tertiary sectors.

The agriculture sector, contributing around 16% of the GSDP, recorded a 5.9% growth for FY11 as against 4.3% in FY10 and a dismal 0.5% in FY09. The manufacturing sector has grown at 9.3%.

The mainstay of the state's economy the services sector which includes the IT industry has come back from its low of a 3.7% growth rate in FY10 to touch 9.7% in FY 11, thanks to the general recovery from the slowdown.

On the revenue front, the survey has projected that the state's total revenue receipts would touch Rs 53,638.78 crore for FY11, recording a year-on-year growth of 16%. The budgeted tax revenue is anticipated at Rs 45,288.40 crore in FY11 as against Rs 36,338.70 crore in the previous year. Sales tax and VAT recorded a yearly growth of 30.17%.

According to the survey, the fiscal deficit, as a percentage of the GSDP for FY11, is expected to narrow down marginally to 3% as against 3.2% in FY10. "Targets as stipulated in the Fiscal Responsibility Act 2002 for the fiscal and revenue deficits have been achieved well within the stipulated timelines and resultant revenue surpluses have helped the enhancement of capital outlays," the survey said.

At the same time, the state's debt has ballooned. It is expected to touch Rs 91,575 crore for FY11 as against Rs 82,513 crore in FY10.

On the investments flowing into Karnataka, the survey said that the State Level Single Window Clearance Committee has approved projects worth Rs 6,087.37 crore while the State High Level Clearance Committee has cleared 130 projects with an investment potential of Rs 1.46 lakh crore.

The survey claimed that the foreign direct investment inflows to Karnataka stood third in India after Maharashtra and Gujarat. The state attracted Rs 9,143 crore FDI during 2008-09 and Rs 4,852 crore in FY10.

Source: Economic Times