The GSDP grew to 32.81 lakh crore ($357.06 billion) at current prices in 2025-26, a 12.9% increase over 29.06%. At constant prices, it went up by 8.1% year-on-year, from Rs 15.94 lakh crore to 17.23 lakh crore. Karnataka's economic output grew faster than the national growth rate of 7.4% during the same period.

Per-capita income - a better metric of a state's wealth - rose by 12.2% year-on-year, from Rs 3.86 lakh crore to Rs 4.33 lakh crore. The national average is Rs 2.19 lakh.

Services contributed 69.87% to the economic output compared to 69.1%, despite growing slower year-on-year (8.1% vs 8.4%). Its share rose from 69.16% to 69.87%.

Industries also reported a higher growth (6.7% compared to 4.1%), but contributed only 19.36% against 19.82%.

While agriculture clocked a robust 9.1% growth compared to 7% last year due to improved monsoon and good meat production, its share in economic output actually shrank from 11.02% to 10.77%.

Districts with stronger performance in the services and industrial sectors recorded higher growth in DDP, while those with a stronger agriculture sector fared poorly overall.

The state's total receipts are expected to rise year-on-year, from Rs 3.58 lakh crore to Rs 4.08 lakh crore. Its own tax revenue is estimated to rise from Rs 1.80 lakh crore to Rs 2.08 lakh crore. Revenue expenditure will rise from Rs 2.83 lakh crore to Rs 3.11 lakh crore due to rising spending on welfare programmes and obligatory payments.

Overall exports rose 13.78% year-on-year.

Karnataka has made some strides in diversifying its economy but continues to face challenges in boosting growth in all parts of the state.

Bengaluru Urban (Rs 11,73,574 crore, or 40.4%) continues to do the heavy lifting, followed by Dakshina Kannada at 5.3% and Belagavi at 3.9%. While Karnataka ranks third in per-capita income (after Delhi and Telangana), only five districts - Bengaluru Urban Rs 8.55 lakh, Dakshina Kannada Rs 6.26 lakh, Udupi Rs 6 lakh, Chikkamagaluru Rs 4.94 lakh and Shivamogga Rs 3.89 lakh - had a higher per capita income than the state average of Rs 3.86 lakh in 2024-25. Kalaburagi has the lowest per capita income at Rs 1.44 lakh.

The Kalaburagi division comprising seven districts recorded the lowest per capita income due to limited industrial and services activities. The survey highlighted the need to encourage private investments in the region.

The survey flagged slow progress in meeting Sustainable Development Goals (SDGs), noting that only 17% of targets are on track with just four years left until 2030.

Noting that while fiscal deficit has not crossed 3% of GSDP, the medium-term fiscal risk is "for real" due to trends in outstanding liabilities, which could put pressure on the quality of expenditure in the coming years.

The survey noted that the state is in "dire need to look for alternative sources of income," as GST compensation has stopped and grants-in-aid have declined. To address this, the government should increase non-tax revenue through auction of new mines, resolving issues related to forest clearances and period tariff revisions for utilities, public transport and urban services.