Karnataka election 2018: 2016 IT bonanza helped CM splurge on welfare schemes

After nearly four decades, an incumbent government in Karnataka could form the government again. It’s not a certainty, but almost all pre-poll surveys show there is no major feeling of anti-incumbency against chief minister Siddaramaiah. 
For that, the CM needs to thank the change in the methodology of estimating the IT sector’s contribution to state GDP in 2016. The new methodology sharply increased the size of the state’s IT sector, increased the state’s contribution to national GDP by 1.5 percentage points — in the process toppling West Bengal as the country’s 5th largest state — and allowed Siddaramaiah to increase his fiscal deficit (excess of government expenditure over revenue) in that year by a mind-boggling 50%.

The resources he had from that year on was so much bigger than previously that he could literally splurge on his bhagyas (welfare schemes) and Bengaluru, and change the electorate’s mood. Pollster C fore’s founder Premchand Palety said in an interview last week that during a survey for panchayat polls in Karnataka in 2016, he had seen a lot of anger among people because of water shortage, power shortage and bad roads. But his recent surveys show a dramatic change in that mood because the CM had addressed all those concerns. The most important explanation for why the CM could do that perhaps lies in the IT bonanza.

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