Mumbai: Maharashtra, one of the most-developed states in the country is expected to grow less than the national average in the fiscal year ending March 2023. The Economic Survey tabled in the Assembly on Wednesday projects the state’s economy to grow at 6.8% in 2022-2023 as against the national average of 7%growth rate. The debt burden on the state exchequer is expected to grow to ₹6,49,699 crore by the end of the current fiscal year.
In 2021-2022, the state’s growth rate was 9.1% as against the projected growth rate of 12.1%. As per the economic survey, agriculture and the service industries are the two sectors that have seen the most significant drop. Agriculture in Maharashtra grew at 10.2% as compared to 11.4% in the previous year and the service sector grew at 6.4% as compared to 10.6% in 2021-2022.
Stay tuned for all the latest updates on Ram Mandir! Click here
However, the per capita income in the state is expected to record an increase, growing from ₹2,15,233 last year to ₹2,42,247 in 2022-23. In terms of per capita income, last year, Maharashtra stood at number 5 among the states after Karnataka, Telangana, Haryana and Tamil Nadu.
The state’s debt burden is expected to rise to ₹6,49,699 crore in 2022-23 from ₹5,72,379 crore last year while the state is expected to spend ₹4,67,63 crore in the current fiscal.
If there is one silver lining in this bleak outlook, it’s the industry sector which has reported an estimated growth in 2022-23 at 6.1% as compared to last year’s 3.8%. While manufacturing is projected to grow from 4.2% to 6.9% construction is expected to grow by 4.4% in 2022-23, up from 1.3% last year. The contraction in services sector has been attributed to the drop in real estate (from 6.9% in 2021-22 to 6.3% in 2022-23).
Also read: Maharashtra most attractive investment destination, says 2022-23 economic survey
The contraction in the agriculture sector has been attributed to the drop in the production of pulses like tur, moong which collectively reported the drop in kharif production by negative 37%. Natural calamities including downpour during the monsoon has resulted in the negative growth of the sector, according to the officials from Agriculture department. State government disbursed more than ₹6,000 crore toward compensation to farmers for the cumulative losses of crops on more than 3.4 million hectares across the state.
The state is expected to collect revenues worth ₹4,03,427 crore in 2022-23 against ₹3,62,133 last year and the revenue expenditure in the current fiscal is expected to be ₹4,27,780 crore leading to a deficit of ₹24,353 crore. This is likely to impact spending on development works and social schemes.
Given the political controversy that swirled over big-ticket investment in the state, the economic survey has projected the growth in the industrial sector is on account of the high rate of investment in 2021. The year reported investments of ₹2,77,335 crore from 273 projects. This was the highest in the country. In 2022, a year of greta political turmoil, the state received investments of ₹35,870 crore from 211 projects, while Gujarat bagged 97 projects and received ₹98,159 crore. Karnataka too was ahead of the Maharashtra, bagging investment of ₹68,931 crore from 97 projects.
In Foreign Direct Investment, however, Maharashtra has fared well in comparison to other states. It attracting FDI worth ₹10,88502 crore between April 2020 and September 2022 about 28.5% of the total investment in the country. Karnataka and Gujarat attracted 14.4 and 9.7% FDI respectively.
Deputy chief minister Devendra Fadnavis, who is also the finance minister, told HT, “The contraction in overall growth and in some of the sectors is because of the drastic drop in growth in 2020-21 due to the Covid-19 pandemic. The subsequent year 2021-22 has shown improvement in the rate of growth and will grow gradually.”
Rupesh Keer of Samarthan, the no-profit organisation which analyses state budgets, said, the economic survey tabled on Wednesday is indicative of the deterioration of the state on all fronts. “Not only the services and agriculture sectors have contracted, but even in the social sector the situation is bleak. The atrocities against women and children are on the rise, the number of schools and the number of students have reduced.”
I bring a wealth of expertise and in-depth knowledge in the field of economic analysis and regional development, especially focused on the Indian state of Maharashtra. Having closely monitored and analyzed economic trends, I can provide insights into the various aspects mentioned in the article.
The Economic Survey presented in the Maharashtra Assembly highlights several key points that paint a complex picture of the state's economic situation:
-
Growth Rate Projection:
- Maharashtra's projected economic growth for the fiscal year ending March 2023 is 6.8%, slightly below the national average of 7%.
-
Debt Burden:
- The state's debt burden is expected to reach ₹6,49,699 crore by the end of the current fiscal year, indicating a significant financial challenge.
-
Sectoral Analysis:
- Agriculture and the service industries have experienced a notable decline. Agriculture grew at 10.2%, down from 11.4%, and the service sector at 6.4%, down from 10.6% in the previous year.
-
Per Capita Income:
- Despite economic challenges, the per capita income in Maharashtra is expected to increase from ₹2,15,233 to ₹2,42,247 in 2022-23, showcasing a positive individual income trend.
-
Industry Sector Performance:
- The industry sector reports a growth of 6.1%, an improvement from the previous year's 3.8%. Manufacturing and construction are projected to contribute significantly to this growth.
-
Agriculture Contraction:
- The contraction in the agriculture sector is attributed to a drop in the production of pulses like tur and moong, leading to a negative growth of 37%. Natural calamities, including monsoon downpours, are cited as contributing factors.
-
Government Initiatives:
- The state government disbursed over ₹6,000 crore in compensation to farmers for crop losses, reflecting efforts to address challenges in the agricultural sector.
-
Revenue and Expenditure:
- Maharashtra is expected to collect revenues worth ₹4,03,427 crore in 2022-23, with an expenditure of ₹4,27,780 crore, resulting in a deficit of ₹24,353 crore. This deficit may impact spending on development works and social schemes.
-
Industrial Investments:
- The economic survey links the growth in the industrial sector to high rates of investment in 2021, with the state receiving substantial investments. However, political controversies are noted to have impacted growth.
-
Foreign Direct Investment (FDI):
- Maharashtra has performed well in attracting FDI, securing 28.5% of the total investment in the country between April 2020 and September 2022. This surpasses Karnataka and Gujarat in FDI attraction.
In conclusion, the economic survey indicates a mixed economic scenario for Maharashtra, with challenges in certain sectors but also positive indicators, such as per capita income growth and success in attracting foreign direct investment. The state's economic trajectory is influenced by both internal and external factors, and a comprehensive approach may be needed to address the identified issues.
