Maharashtra is the biggest economy within India at Rs 16.87 lakh crore in terms of gross state domestic product (GSDP), according to the latest report by credit rating agency Brickwork Ratings. The state is followed by Tamil Nadu and Uttar Pradesh.
The report, which said Maharashtra’s GSDP has grown by 11.69 per cent for the financial year ended March 31, 2015, also highlights the fact that Maharashtra earns approximately 70 per cent of its total receipts through tax revenues — the highest among the bigger states — followed by Gujarat and Tamil Nadu.
The findings are part of Brickwork’s fourth edition of a nationwide, multi-state research analysing finances of all the states. The rating agency looks at the State government’s willingness and ability to honour debt obligations, and the rating criterion includes an analysis of political, economic, budgetary, financial and institutional parameters considered relevant to the State government’s creditworthiness.
According to the report, Gujarat and Maharashtra accounted for 27.26 per cent and 25.18 per cent of GSDP respectively in 2014-15, and led other state economies in terms of level of contribution from the manufacturing sector. Other states with higher manufacturing sector share were Tamil Nadu (19.1 per cent), Jharkhand (18.8 per cent) and Haryana (18.1 per cent).
Karnataka leads in the growth of services sector, largely due to the growth in the IT/BPO/ KPO sector, followed by Tamil Nadu, Maharashtra and Andhra Pradesh. Maharashtra, along with Karnataka, has also been able to keep the expenditure on general services under check. Bihar, Orissa, Tamil Nadu and Kerala spend the most on pensions. Also, Maharashtra’s infant mortality rate (IMR) of 25 is below the national average for all states, which stands at 50.
Meanwhile, at a national level, India’s GDP growth rate at 7.3 per cent in 2015 exceeded that of China, which grew at 6.9 per cent. The report states that China has been registering double digit growth since 1990, and India seems to have begun that journey now.
The three fastest-growing states were Bihar at 17.06 per cent, MP (16.86 per cent) and Goa (16.43 per cent). The laggards were Telangana at 5.3 per cent, Punjab (10.16 per cent), Rajasthan (11 per cent). Telangana was formed only last year and the administrative machinery is still evolving.
While agriculture has been the mainstay of most states, employing 40-60 per cent of the workforce directly or indirectly, it has been neglected by all political parties, according to Brickwork. “The futures markets are not well developed and farmers have to bear the price risk of crops. That results in everyone going for the same crop like sugar cane, and the sugar factories are unable to crush the standing cane.
“Banks are cautious in lending to agriculture due to fears of loan waivers that result in no repayments from rich farmers,” says the report.