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Karnataka is one of the most economically developed states of India, which posted a GDP growth of 9.2 percent during the 2006-07 fiscal. Agriculture and industry are the backbone of the business and economy of Karnataka. Karnataka has large reservoirs of minerals, and large tracts of land, suitable for cultivation. Hence the people of Karnataka grow a variety of crops like cashew, coconut, cardamom, ragi, jowar, pulses and rice. Rice is of course the main crop grown in most parts of rural Karnataka. Approximately, 56 percent of the labour force of Karnataka is engaged in agriculture and its associated activities.
The topography of Karnataka is highly suited for agricultural activities as it has a suitable climate, soil and relief for growing crops. Karnataka is highly dependent on the monsoon for its agriculture, and this state does get plenty of rainfall. Consequently, it actually has three agricultural seasons known as Kharif, Rabi and summer crops.
Karnataka leads in the coffee, coarse cereals and raw silk production. Because of its favourable climatic conditions, it has become a hub for the horticultural industry. At Karnataka, many exotic flowers are being grown, both for the local use and for exports to other countries, adding to the economy of the state.
Besides industries and agriculture, the economy of Karnataka is supported by sectors like tourism, banking, finance and mining. It is only in the recent times that information technology has emerged as an important sector, which has caused a surge in the economy of Karnataka in general, and services sector of Karnataka in particular.
With many of the major information technology conglomerates setting up offices in and around Bangalore and Mysore, the whole state has been flourishing economically. The capital of Karnataka, Bangaluru, is known as the Silicon Valley of India with a lot of IT companies operating in this region. The IT revolution has spearheaded a service sector boom in the state. By 2003, the services sector contributed approximately 50 percent to the state's GDP.
Besides having a booming private sector, boosted by the IT growth, the state of Karnataka also has been the base for many important public sector enterprises like the Bharat Earth Movers Limited, Hindustan Machine Tools, Bharat Electronics Ltd., Hindustan Aeronautics Limited, Bharat Heavy Electricals Ltd., Central Food Technological Research Institute, etc.
Silk rearing and Khadi production are also well known industries in Karnataka. Power and energy sector is another economy booster to Karnataka, and many leading power companies have set up coal-based power projects in this state. This will go a long way in giving an impetus to the economy of the state.
Karnataka has a well developed infrastructure where the government has implemented many infrastructure projects like construction of expressways, flyovers and roads in the recent times. Due to the information technology boom in Bangalore and Mysore, and with big multinationals like the Microsoft, Accenture, Wipro, Infosys and Yahoo setting up shops in the state, there has been a spate of construction activities in Bangalore, which pertains to housing, malls and supermarkets. The government has also initiated the metro rail project to help ease road congestion and to aid growth in the transport sector.
Other than the major industries of the state like processing of plantation products like coffee, rubber, cashew, etc. there are industries based on food processing, electrical engineering, chemical industries, etc. Mining of minerals like gold and iron ore is another major industry in Karnataka. The coastal regions of Karnataka, mainly Udipi and Dakshina Kannada, have been known for their banking and financial institutions. Many leading banks, like the Canara Bank, Syndicate Bank, Corporation Bank, State Bank of Mysore, Vijaya Bank have their origins in the state of Karnataka.
Besides the large scale industries, many small scale industries like making of agarbhattis, sandal wood carving and handicrafts are also there in the state, which contribute to the economy of Karnataka.
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