Karnataka represents a microcosm of the development prospects and problems and challenges for India, and for developing countries more generally. Known globally for the high tech achievements of Bangalore, and for being
an early proponent of the panchayat system, the state also contains large
rural areas where poor agricultural communities live in poverty, and spatial inequalities have grown in the last decade. It has enjoyed relatively high growth rates, but faces increasing water shortages and
problems of environmental degradation. It has an active civil society, which has produced the wellknown phenomenon of the "report cards" on municipal performance, drinking water and sanitation facilities. But it
also faces problems of corruption and misuse of public resources, in spite
of several good governance measures such as passing the Transparency Act
in 2000, and establishing Lokayukta and Consumer Protection Forums.
It has profitable public enterprises that are responsive to the needs of
consumers, and moribund parastatals that cannot be closed because of
political pressures. It has a need to shrink its public deficit, but faces
pressures for expenditure on social and public infrastructure, on which
depend the future growth and poverty reduction prospects of the economy.