Karnataka economy expands strongly: GSDP expected to cross ₹17.2 lakh crore with 8.1% growth, outpacing national rate

Economic Survey shows strong growth across agriculture, services and industry as Karnataka’s per capita income nears ₹4.3 lakh and exports rise sharply.

Karnataka’s economy is projected to record strong growth in the coming financial year, with the state’s Gross State Domestic Product (GSDP) at constant prices expected to cross ₹17.2 lakh crore in 2025-26, according to the Economic Survey released on Friday.

The survey estimates that the state’s GSDP will grow by nearly ₹1.3 lakh crore, registering a growth rate of 8.1% compared to the previous year. In 2024-25, the state’s GSDP stood at over ₹15.9 lakh crore. The latest projection also shows that Karnataka’s economic growth is higher than the national growth rate of 7.4%.

Presenting the state budget, Chief Minister Siddaramaiah highlighted that Karnataka’s economic performance is supported by steady growth across several sectors. He said the state has developed a diversified and stable growth pattern, which has helped maintain strong economic momentum.

The current estimate also reflects an improvement compared to the previous year’s growth trend. The GSDP growth rate is 1.2 percentage points higher than the 7.3% growth recorded in 2024-25. That year had already seen a slowdown compared to 8.2% growth recorded in 2023-24.

A closer look at sector-wise growth indicates that agriculture is expected to grow the fastest at 9.1%, followed by the services sector at 8.1%. The industrial sector is projected to grow at 6.7%, while manufacturing alone is expected to expand by 7.2%.

Apart from constant prices, the survey also provides estimates at current prices. In nominal terms, the state’s GSDP is expected to reach more than ₹32.8 lakh crore in 2025-26, compared to around ₹29 lakh crore in 2024-25.

Also Read:56-year-old woman falls into 25-foot pit during morning walk; Police rescue her after night-long operation

For a state facing revenue stress, a higher GSDP gives the government more financial flexibility. It allows the state to increase borrowing while remaining within the Fiscal Responsibility and Budget Management (FRBM) limits, which restrict total liabilities to 25% of the GSDP.

The Economic Survey also notes strong growth in Karnataka’s export sector. Total exports from the state increased by 13.8% in 2025-26 compared to the previous year. Agricultural exports also recorded significant improvement. The export value of agricultural commodities rose from $2,043.7 million to $2,457.4 million, reflecting a 20% increase.

According to the survey, this growth shows that Karnataka’s production base is becoming more competitive, diversified and better connected to global markets.

Government finances are also expected to improve. Total receipts of the state are projected to grow by 13.9%, increasing from ₹3.5 lakh crore to more than ₹4 lakh crore. Revenue receipts alone are estimated to grow 13.4%, from ₹2.5 lakh crore to ₹2.9 lakh crore. Meanwhile, capital receipts are expected to rise by 15.2%, from ₹1 lakh crore to nearly ₹1.2 lakh crore.

However, the survey notes that the final financial figures will become clearer after the fiscal year ends on March 31, when the actual numbers are confirmed.

Also Read:Contractors protest in Bengaluru: Government faces ₹37,000 crore pending bills challenge

Another important indicator of economic growth is the state’s per capita income (PCI). Karnataka’s PCI at current prices is estimated at ₹4.3 lakh, which is 97% higher than the national average of ₹2.2 lakh.

The state has also recorded a strong increase in individual income levels. Per capita income has risen from ₹3.8 lakh in 2024-25 to ₹4.3 lakh in 2025-26, marking a 12.2% growth at current prices. At constant prices, PCI increased from ₹2 lakh to ₹2.2 lakh, reflecting a 7.4% growth.

District-wise income figures for 2025-26 are yet to be estimated, but the data for 2024-25 shows that only one district, Kalaburagi, had a per capita income below ₹1.5 lakh, recording about ₹1.4 lakh during that year. The survey expects that Kalaburagi’s per capita income has likely crossed ₹1.5 lakh in the current fiscal year.

The Economic Survey also highlights the state government’s long-term planning. With four years remaining until 2030, Karnataka is aligning its economic sectors with the Sustainable Development Goals (SDGs) set under the United Nations’ 2030 Agenda.

The state is also encouraging private sector participation in sustainable development, promoting SDG implementation through environmental, social and governance (ESG) frameworks.

Overall, the survey indicates that Karnataka’s economy is growing steadily with strong contributions from agriculture, services, industry, exports and rising income levels.