Karnataka Economy

Industries and agriculture form the backbone of the economy of Karnataka. Apart from these two, tourism, mining industry and the banking sector also is a major support for the economy of Karnataka. It has been estimated that about 80% of the total population in Karnataka is dependent upon agriculture. Rice is the main food crop grown in the region. Other than this, the crops that contributes to a major portion of Karnataka economy are Ragi, Jowar, Pulses, Coffee, Cashew, Coconut, Arecanut, Cardamom an so on.

Besides, industries of Karnataka also is a major contributor in the economic growth of Karnataka. The state is showing extensive progress in both public and private sectors of industries. Some of the important industries of Karnataka are:
  • Bharat Electronics Limited
  • Bharat Earth movers
  • Hindustan Machine Tools - HMT
  • Bharat Heavy Electricals - BHEL, etc.
Further, Karnataka is known for its silk rearing and the production of khadi. The state has a large market for its silk products in India as well as in other parts of the world. Apart from these, we also find numerous other industries in Karnataka that helps extensively in the economic upgradation of Karnataka. They are Food Processing, Engineering, Electrical, Chemical, Electronic Goods, Agro-based, processing of plantation products like tea, coffee, rubber, cashew, etc.

The power and energy sector of Karnataka is another very important contributor in the economy of Karnataka. Recently, interest have been shown by the Reliance Energy Limited, Tata Power, National Thermal Power Corporation and GMR to set up 3 coal based power projects of 1000 mega watts in Karnataka. This will surely enhance the economy of Karnataka.


Agriculture is an important part of economy of Karnataka. Karnataka has got a topography that is highly suitable for agricultural activities. That is to say, Karnataka's relief, soil, climatic conditions taken together contribute immensely towards growing crops. Agriculture is one of the main occupation of the people of Karnataka. About 12.31 million hectares of land, including 64.6% of the total area, is used for agriculture in Karnataka.

According to the 2001 census, about 71% of workforce in Karnataka are farmers and agricultural laborers. Agriculture of Karnataka is mainly dependent on monsoon, as only 26.55 of land is supported by irrigation. In Karnataka, irrigation is done in about 26.5% of the total sown area.


Regardless of the size of one's business or aspirations, Karnataka Bank caters to individual demands. As a premier bank, it has developed a comprehensive range of customized products and services - personal banking, business banking, money transfer, and insurance. They include borrowing facilities, deposits, giving optimum returns on surplus funds and overseas transactions.

Karnataka Bank first realized the importance of Centralized Banking System and was among the first to apply Core Banking System in 2000. This system helped to process all the customers' accounts from one single place - the Data Center at Bangalore. Hi-tech technology from the best players in the industry like Infosys, Sun and Wipro help to provide non-stop services of the highest reliability.


Karnataka utilizes both commercial and non commercial types of energy. Recent surveys show that 53.2% of the total energy use is catered to by non commercial sources such as firewood (43.6%), cow dung cake (1.4%), and agricultural wastes (8.2%).

Whereas commercial energy like coal (5.8%), oil (11.6%), kerosene (2.6%), liquid petroleum gases (0.7%), and electricity (26.1%) contribute to 46.8% of the total energy use. A major part of these non conventional energy sources meet the heating (domestic) needs of the rural population (about 70-80% of the total) and, to a lesser extent, that of village industries. Whereas if electricity is considered, the share of the industrial sector in total consumption is about 44.9%, followed by irrigation pump sets contributing 28.6%, and domestic users who consume almost 15.5%.


Karnataka has become one of the leading states in terms of industries. The State capital of Karnataka has long been chosen by the government of India for the location of many big industries.

Moreover, the industries of Karnataka proves to be the basis of the economy of Karnataka. In fact, industries of Karnataka are the means through which Karnataka is counted among one of the leading states in India.

Speaking about industries, Karnataka houses some of the major industries of India. Some of such industries are:

Bharat Electronics Limited Bharat Earth movers Hindustan Machine Tools - HMT Bharat Heavy Electricals - BHEL, etc. All these industries work together in making Karnataka the nexus of the Industrial developments in India. Besides, apart from these industries there are other industries that are helping Karnataka to pace up with the increasing competition. Some of the other industries of Karnataka, viz.:

processing of plantation products like tea, coffee, rubber, cashew Beverage and soft drink based industries Food processing based industries electrical engineering based industries electronic engineering based industries mechanical engineering based industries chemical based industries petrochemical based industries agro-based industries textile based industries, etc.

Beside these major industries, we also find a number of small scale industries in Karnataka. The small-scale industries work hand in hand with large-scale to uplift the economic status of Karnataka. Precisely speaking, besides, these industries, other sectors like tourism, telecommunications, power and energy, transportation, mining, and banking industries also contribute towards the economy of Karnataka. It can be said that a joint alliance of all these industries are helping Karnataka to soar upwards.


The infrastructure of Karnataka is very well developed. The Karnataka government is making all efforts to enhance the infrastructure of the state as a number of industries have come up in the recent era. Another factor which has also contributed heavily for the various infrastructural projects that have been taken up by the government is the IT boom. All the top companies like Microsoft, Infosys, Accenture, Wipro, Yahoo, Logica CMG started operating in Bangalore, the capital of Karnataka.

In order to support this boom in industry the government has implemented many projects to improve the infrastructure of Karnataka. A number of flyovers, expressways and roads have been built as a result of this infrastructural growth. Some of the developmental work that has been done by the government are:

An international airport near Bangalore An International Convention Center and the Electronic Trade, Technology Development and Exhibition Center will be operational soon A Mega City project for the development of Bangalore A technology park at Whitefield near Bangalore The Bangalore-Mysore Expressway A 99-kilometer long Elevated Light Rail System Development of ring road around Bangalore Several growth centers like Dharwad, Hassan, Raichur Airstrips are emerging at Hubli, Gulbarga and Mysore for better transport mobility


Mining in Karnataka is one of the major industries of the state. The history of mining in Karnataka goes back to the ancient days. The gold found in the Harappan sites are believed to have been excavated from the mines of Karnataka. Karnataka still continues to be equally rich in its mineral wealth. Gold along with iron-ore are the main mineral wealths of Karnataka. Chitradurga, Bellary, Belgaum and Bagalkot are some of the districts in which mining in Karnataka have continued to be major industries.

Iron ore lies at the very center of Karnataka's mining industry. Balidala, Donimalai and Panna are some of the leading iron-ore producing areas of Karnataka. Gold and diamond mines are chief attractions of Karnataka mining. The Hutii gold mines have supplied gold to the world from very ancient times. Now with many international companies taking a keen interest in mining at Karnataka, the future of mining in Karnataka looks extremely bright.

Various private companies look after the mining operations in Karnataka. They undertake mining operations at the major mining sites of Karnataka. They also look after the extraction, processing and distribution of these metals. They work under the direct supervision of the ministry of mining industry, who oversee all the works of the private companies.


Power in Karnataka features an efficient blend of conventional and unconventional energies to cater to the wide and varied needs of the inhabitants of the state who belong to a wide range of occupational groups.

Following the privatization drives of the post-1991 era, power sector in Karnataka has been largely privatized to optimize the use of natural resources of the state. A possible agreement with the Andhra Pradesh government also stays in the pipeline to enhance the all-over power situation of the state. Power at Karnataka has been a problem in the last few years. But the state authorities have been extremely active to steady the situation through the formation of many diesel generated power grids and formation of many mini and micro level hydro-electricity plants to effectively optimize the power resources of the state. Most of the power of Karnataka is drawn from traditional sources like heat and water. After the seventh five year plan, many diesel power generating units and gas grids have been successfully introduced to largely improve Karnataka's power situation.

Power in Karnataka has been markedly improved with the introduction of private companies to spruce up the power situation. The Karnataka Power Corporation and the Karnataka State Electricity Board are the two major power organizations of the state. They look after the production, distribution and revenues of Karnataka's power sector. The government also ends up being a beneficiary from these privatization drives.


Telecommunications is one of the most significant sectors of Karnataka. The reason behind it is the growth of the IT industries. Today, the IT sector mainly relies on the communication network and Karnataka being one of the largest IT hubs in India, development in this sector is necessary.

Last Updated on 27 June 2013