Karnataka Elections: Congress has won the state but many pressing governance challenges await it

The Congress has swept Karnataka, winning 135 seats in the 224-member assembly.

In the run-up to the assembly elections, all political parties including the Congress which swept the polls, made tall promises, many of which may not be good for the financial health of Karnataka, but the biggest task before the new government is to correct the lopsided development of the state and ensure equitable growth.

Karnataka may pride itself as one of the fastest growing economies in  the country with the second highest Goods and Services Tax (GST) collection and robust Foreign Direct Investment (FDI), but the devil is in the details. While the budget presents a rosy picture of the state of affairs, the  Economic Survey 2021-22 exposes the stark imbalance in the economy both in terms of geographical areas and different sectors.

Overdependence on IT

Bengaluru (Urban) is the highest contributor to the state’s Gross Domestic Product (GDP), while promises by various governments to create economic hubs in Tier 2 and 3 cities as a counter balance to the over-saturated capital city has remained only on paper. This also translates to a huge disparity in the per capita income of Bengaluru as compared to other districts.

There is thus an urgent need to take economic development to the districts, particularly North Karnataka which continues to remain backward on virtually all parameters, including child nutrition.

A sector-wise analysis shows that the service sector, particularly IT-related services,  mainly contributes to the economic growth of the state. The contribution of services to Gross Sales Value Added (GSVA) stood at 66.1 percent (Fy 21-22) followed by industries at 19.8 percent and agriculture at 14.1 percent. Interestingly, while the contribution of agriculture to the GSVA is the lowest, it supports the highest workforce at 45 percent.

Promoting manufacturing

Experts and economists have called for rebalancing the workforce from agriculture to higher-wage opportunities in industry and service sectors, but that would require a political will to strategically tailor the budget which traditionally offers sops to farmers with an eye on their votes.

The industrial sector in Karnataka has been a laggard, growing at only 6.1 percent CAGR over the last 5 years in GSVA terms, as against 16.6 percent CAGR for agriculture and 11.6 percent CAGR for services in the same period. This obviously has dragged down the growth rate for Karnataka, consequently impacting the creation of jobs.

The new government should take steps to de-risk the state from its over-dependence on the service sector and focus on uniform industrial growth. The Economic Survey suggests that this could be achieved through adequate investment, incentives and a structured movement of skill  and transfer of excess agricultural workforce to industry.

Better quality of life

Though most development in the state is concentrated in Bengaluru, the city’s unplanned growth has made it unliveable. Bengaluru has a plethora of civic agencies which not only work in silos but at cross-purposes and there is an immediate need to bring them all under a single umbrella organisation if the city has to see better planned development.

Given the city’s notorious traffic jams, Bengaluru deserves a compressive mobility pitch with a stress on public transport, including early completion of the long pending sub-urban rail project.

The unpredictable weather conditions, including excessive rain and heat, have demonstrated that the threat of climate change is real, but besides the usual lip service towards protecting the environment, no political party has come out with an actionable blueprint. This is an area that calls for attention.

Progress and harmony

Though corruption is not new to the state, the last three years have seen several charges of graft being levelled against the state government from virtually all quarters. Karnataka has earned a name for itself as a progressive province right from the time of the Maharajas and unless efforts are made by the new government to restore its fair name, fresh investment may be impacted while there could even be a flight of capital to neighbouring states.

While most areas that require attention find a mention in the Congress manifesto, the promise to provide quality education and healthcare are likely to remain only on paper unless the budgetary allocation is significantly increased from the current 12 percent and 5 percent respectively. Besides, the new government will also have to evolve a legally tenable reservation policy considering that the matrix worked out by the current regime suffers from several infirmities.

However, the topmost priority before the government would be to maintain social harmony which has been the hallmark of the state for long. Karnataka’s poet laureate Kuvempu had described the state as sarva janagada shanthiya thota (a garden where all communities live in peace). All the progress that the state makes in various sectors would pale unless the people are able to live in peace and harmony.

(Gautham Machaiah is a senior journalist and political commentator based in Bengaluru. Views are personal and do not represent the stand of this publication)