chapter  3
27 Pages

Karnataka: the state of a determined path

Karnataka has been a forerunning state in implementing sub-national market-

oriented economic and institutional reforms. It was quick to adopt neoliberal

reforms after the GoI introduced a major programme of structural adjustment in

1991, and in 1996 it was the first state to be given a loan from an international

development bank for a large urban infrastructure development project. It was

also one of the first states to experiment with turning people in slums into paying

customers of public water services with support from various international and

bilateral development agencies. Furthermore, it embarked on many urban ‘good

governance’ reforms before they became part of a national level urban renewal

and institutional reform programme that was launched by the GoI in 2005. The

Government of Karnataka (GoK) has been rewarded by international develop-

ment banks for its commitment to reforms. For instance, the World Bank has

provided the GoK with a number of sub-national loans for state-level structural

adjustment and governance reforms, including a major project to radically trans-

form urban water governance. According to the World Bank, such progress has

positioned Karnataka as a ‘reform leader’ in the Indian sub-continent (World

Bank 2001a: 2). It is a state that other sub-national governments are expected to

learn from, model themselves on, and follow. But why was it that Karnataka

became a forerunner in accepting and adopting market-oriented reforms?