Tamil Nadu showed steady growth rates of 8.13 percent in 2022-23 and 8.23 percent in 2023-24, while Karnataka's underestimated projections of 4 percent were revised to 13.1 percent, showcasing its strong economic resilience against the national average of 8.2 percent
Published Oct 21, 2024 | 6:03 PM ⚊ Updated Oct 21, 2024 | 6:03 PM
Economic growth of Karnataka and Tamil Nadu: An overview for FY 2023-24(iStock)
The latest economic data released by the governments of Karnataka and Tamil Nadu provides a detailed perspective on the Gross State Domestic Product (GSDP) growth in these two key Indian states for the fiscal year 2023-24.
Karnataka’s GSDP has surpassed the national average by a mile and its growth has outpaced Tamil Nadu’s.
Karnataka has emerged as a crucial player in India’s economic landscape, achieving a GSDP growth of 10.2 percent in FY 2023-24, according to the Ministry of Statistics and Programme Implementation (MoSPI).
This growth rate is notably higher than the national average of 8.2 percent, reinforcing the state’s position as an economic powerhouse.
The state initially faced projections of a mere 4 percent growth by the National Stock Exchange (NSE), which were dramatically revised to 13.1 percent by year-end, indicating a significant underestimation in early assessments.
This discrepancy highlights the state’s robust economic performance, especially in the face of considerable challenges, including the worst drought in a decade that adversely affected agricultural output. The drought led to negative growth in the agricultural sector, emphasising the impact of environmental factors on economic performance.
Karnataka’s economy is heavily reliant on its IT and hardware sectors, which contribute about 28 percent of the Gross State Value Added (GSVA). The state faced additional challenges from a global economic slowdown, with the Indian IT industry’s revenue growth plummeting from 15.5 percent in FY22 to 8 percent in FY23, in line with global recessionary fears and inflationary pressures. According to the International Monetary Fund (IMF), global growth fell from 6.0 percent in FY21 to just 2.7 percent in FY23.
Despite these adversities, Karnataka’s economy demonstrated remarkable resilience, attributed to strategic investments and pro-growth policies from the state government.
Economic indicators further bolster this view, with a 10 percent year-on-year growth in GST collections and a 24 percent rise in stamp duty revenue as of September 2024. In projections for FY 2024-25, the NSE anticipates a growth rate of 9.4 percent, while the Ministry of Finance has a more optimistic estimate of 14 percent.
Key Economic Indicators for Karnataka:
In contrast, Tamil Nadu reported a GSDP of Rs.15,71,368 crore at constant prices for FY 2023-24, reflecting a growth rate of 8.23 percent. At current prices, the GSDP reached Rs.27,21,571 crore, resulting in a growth rate of 13.71 percent. This performance positions Tamil Nadu as the second-largest economy in India by GSDP at current prices, trailing Maharashtra.
The state’s GSDP figures indicate steady growth compared to the national GDP growth rates of 8.15 percent at constant prices and 9.60 percent at current prices. Tamil Nadu’s economic structure is diverse, with significant contributions from its services, manufacturing, and primary sectors.
Key highlights of Tamil Nadu’s economic performance include:
In terms of inflation, Tamil Nadu recorded rates of 5.37 percent in FY 2023-24, slightly lower than the all-India inflation rate of 5.38 percent during the same period. This controlled inflation rate, coupled with steady economic growth, reflects the state’s effective economic management.
Key Economic Indicators for Tamil Nadu:
(Edited by Ananya Rao)
