Karnataka's Economic Surge: A Promising Growth Trajectory

Karnataka's economy is forecasted to continue its growth trajectory in 2025-26 with a projected GSDP of Rs 30,91,111 crore, supported by rainfall and robust performance in services and industrial sectors. The state reported a strong fiscal performance, controlling inflation and demonstrating high revenue and expenditure growth.

The Karnataka government projects a continued growth trajectory for the state's economy this fiscal year, supported by the anticipation of adequate rainfall. The 'Mid-Year Review of State Finances' report anticipates the Gross State Domestic Product (GSDP) reaching Rs 30,91,111 crore by 2025-26, according to the Ministry of Finance.

The report highlights a promising agricultural output driven by favorable monsoons, with the services and industrial sectors underpinning sustained economic momentum. Inflation remained controlled, aided by a bountiful monsoon that kept food prices stable, resulting in a fiscal performance bolstered by a year-on-year 7.7 percent growth in revenue collections.

Karnataka's strong tax administration and economic activity secured its second rank in the country's gross GST collections in the first half of 2025-26. The state's fiscal deficit is projected at 2.95 percent of the GSDP, with total spending reaching over a third of the budget estimates and a notable increase in capital project expenditure.

(With inputs from agencies.)