Mysuru's blueprint: The historical roots of Karnataka's growth story

Ask why Karnataka builds satellites, steel, and software with equal ease, and most answers begin in 1991 with liberalisation, global capital, and the rise of Bengaluru’s tech industry. It is a convenient story, and not a false one. But it skips the opening chapter. Long before economic reform entered the national vocabulary, the Kingdom of Mysore, under Nalwadi Krishnaraja Wadiyar was already governing on a set of principles that would look strikingly familiar to Karnataka’s policymakers today: infrastructure built ahead of demand, industry actively planned rather than passively awaited, and education treated as an economic investment rather than a civic courtesy. Traced from the 1880s through to the present, this history is not a footnote to Karnataka’s success; it is the blueprint for it.Early State-led industrialisation under Nalwadi Krishnaraja Wadiyar shaped Karnataka’s institutional and policy orientation to industrial and economic development.The groundwork was laid before Krishnaraja Wadiyar even took the throne. The 1881 Rendition of Mysore restored native administration and set off a wave of reform under Dewan C V Rangacharlu. A decade later, in 1891, Mysuru introduced a civil service examination, establishing a merit-based bureaucracy at a time when most of India still ran on patronage. By the late 1890s, specialised departments of geology (1894) and agriculture (1898) were functioning. While these measures did not produce factories, they produced a State capable of planning and coordinating, well before it had much to coordinate.The Shivanasamudra hydroelectric project, commissioned in 1902, was among the earliest of its kind in Asia, and it signalled that Mysuru viewed power generation as a foundation for growth rather than a convenience. The real acceleration followed Sir M Visvesvaraya’s arrival as chief engineer in 1909, later as Diwan in 1912. In a short span, Mysuru assembled the financial and administrative scaffolding of a modern economy: the Bank of Mysore (1913) to finance it, the Department of Industries and Commerce (1913) to steer it, and the Mysore Economic Conference (1914) to plan it—a system that was soon tested.The World War I disrupted sandalwood exports, leaving the stocks unsold. Rather than absorb the loss, Krishnaraja Wadiyar, Visvesvaraya and the industrial reformer, Alfred Chatterton, turned the crisis into a strategy by setting up a sandalwood oil distillery in Bengaluru in 1916. The same year, the University of Mysore was founded, a move to supply the technical talent such ventures would require. The Mysore Soap Factory followed in 1918. Within six years, a commodity crisis had produced a distillery, a university and a template: don’t merely export raw material, convert it into value.The Bhadravati Iron and Steel Works expanded in 1923, and the Krishna Raja Sagara dam, an engineering landmark of its era, was completed in 1932. Even after Visvesvaraya’s departure, Mirza Ismail consolidated this model, evidence that what had been built was an institutional tradition, not the achievement of a single administrator. By 1940, Mysuru had sequenced the essential components of what economists now call a developmental state: administrative capacity, planning institutions, financial infrastructure, technical education and industrial enterprise. The more interesting question is whether this history actually shaped what followed.Consider infrastructure. Mysuru treated hydropower and irrigation as prerequisites for industrialisation, not conveniences. Karnataka’s Industrial Policy 2025–2030 applies the same reasoning to industrial corridors, logistics parks, and digital connectivity: build the foundation, and industry follows.Think about coordination. The Department of Industries and Commerce and the Mysore Economic Conference planned and directed economic activity. Today, bodies such as the KIADB and the KSSIDC perform that function. The state no longer owns the factories, as it once did with the Bhadravati Iron and Steel Works or the Soap Factory, but it still shapes the conditions under which factories are built.Count human capital. The University of Mysore and Visvesvaraya’s technical institutions rested on a conviction: industry needs trained people at least as much as raw material. Karnataka’s skill-development missions and the Startup Policy 2025–2030’s emphasis on industry-academia collaboration restate that same conviction for a knowledge economy.Even the sandalwood story has a living descendant. Karnataka Soaps and Detergents Limited still sells the Mysore Sandal brand in international markets, a business built directly on the 1916 pivot from raw export to processed value addition.This pattern aligns with what economic historian Douglass North calls institutional persistence: rules and administrative habits established at one point in time tend to outlast the specific conditions that produced them, shaping outcomes long after. Mysuru’s institutions survided more as governing instincts than as museum pieces.One part of this legacy is harder to celebrate. When Karnataka was formed in 1956 by merging Mysuru with territories from the former Hyderabad and Bombay presidencies, it inherited Mysuru’s institutional strengths and its geography. The developmental disparity between ‘Old Mysore’ and Hyderabad and Bombay regions, formally documented by the Nanjundappa Committee in 2002, traces directly back to where the investments of 1902 to 1940 did, and did not, reach. To its credit, current policy treats this as unfinished business rather than a footnote. KIADB now operates industrial areas across all 31 districts. In a sense, even correcting the imbalance follows Mysuru’s method: the state stepping in deliberately, as it once did. Karnataka’s habit of treating industrial growth as something the state actively builds, rather than something markets simply deliver, did not begin with liberalisation.(Arshia is an intern at ISEC and Krishna Raj is a professor and head, CESP, ISEC, Bengaluru)

Source: Deccan Herald