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Maharashtra to grow at 9.4% in 2016-17: Economic Survey

Business Standard:  March 20, 2017

Mumbai: Achhe din for the BJP-led government in Maharashtra are here. According to the Economic Survey for 2016-17 presented in the state legislature, the gross state domestic product (GSDP) for 2016-17 is expected to grow by 9.4 per cent compared to 8.5 per cent in 2015-16. 

The surge in growth is largely due to a 12.5 per cent growth in agriculture, 10.2 per cent in electricity gas, water supply and other utility services and 10.8 per cent in services.  

The state economy will grow faster than the Indian economy, which is expected to grow by 7.1 per cent in 2016-17.

State Finance Minister Sudhir Mungantiwar said he hoped Maharashtra would achieve double-digit growth in the coming years and it would continue to retain its pre-eminent position in the national economy due to skillful fusion of technology, social structure, infrastructure backed by natural and human resources along with an organised method of production.

However, the rise in debt stock continues to be a matter of concern as it is estimated to be Rs 3.56 lakh crore in 2016-17 against Rs 3.20 lakh crore a year earlier. This is 15.7 per cent  of the GSDP, within the limit of 22.1 per cent  laid down by the 14th Finance Commission. The state’s interest payments will be Rs 28,220 crore against Rs 26,217 crore. 

The state government’s revenue expenditure, especially on wages, pension and interest, is estimated at Rs 91,924 crore in 2016-17 against Rs 90,092 crore a year earlier.

On the other hand, capital expenditure is set to grow by 17.1 per cent to Rs 46,309 crore against Rs 39,714 crore in 2015-16.

Notwithstanding the Centre’s decision to withdraw currency notes of Rs 500 and Rs 1,000 on November 8, revenue receipts during April-December 2016 increased by 11.4 per cent to Rs 1.40 lakh crore. 

The per capita income has grown by 11.4 per cent to Rs 1,46,399 in 2015-16 against Rs 1,32,341 in 2014-15. Maharashtra is second only to Karnataka, whose per capita income stands at Rs 1,48,485.

The agriculture and allied sectors are expected to grow at 12.5 per cent in 2016-17 against a decline of 4.5 per cent in 2015-16. The growth in agriculture alone is estimated at 19.3 per cent against a decline of 10.3 per cent in the previous year.

During the kharif season of 2016-17 the area under cereals is expected to grow by three per cent, pulses by 28 per cent and oilseeds by six per cent while the area under sugarcane will fall by 36 per cent and cotton by 10 per cent. However, the production of cereals is likely to increase by 80 per cent, pulses by 187 per cent, oilseeds by 142 per cent and cotton by 83 per cent while the production  of sugarcane will fall by 28 per cent.

The area under rabi crops will be five per cent less than the previous year. The area under cereals will decrease by 16 per cent and oilseeds by 24 per cent while the area under pulses will rise by 22 per cent.

Ironically, the Economic Survey is silent on farmer suicides, which are continuing unabated.

The Economic Survey has not provided the actual area irrigated in 2016-17 citing revision in the process of collection of data. Under the state’s flagship Jalyukta Shivar Abhiyan (Water Conservation Project), 4,374 of 6,202 villages have been made water neutral and 11,82,230 thousand cubic meters of water storage was created in 2015-16.

Industrial Investments

According to the Economic Survey, the state continues to be the favoured destination by attracting 19,437 industrial proposals worth Rs 11.37 lakh crore between August 1991 and November 2016. Of these, 8,664 projects (44.6 per cent ) with an investment of Rs 2.69 lakh crore have been commissioned while 2,107 projects worth Rs 87,701 crore are under execution. The state’s share in industrial proposals nationwide was 17.9 per cent and in investment 10 per cent.

The state has approved 488 mega projects with an investment of Rs 3.79 lakh crore till December 2016. During the Make In India week in February 2016, the state signed 3,018 MoUs with a proposed investment of Rs 8.04 lakh crore. However, the Economic Survey has not disclosed the present status of those MoUs.

Social Sector Status

According to the Maharashtra Human Development Report (MHDR) 2012, the Human Development Index (HDI) of the state is 0.752. Mumbai comprising Mumbai city and suburban districts taken together has the highest HDI of 0.841 whereas the tribal dominated Nandurbar in north Maharashtra has the lowest HDI of 0.604. The literacy rate is 82.3 per cent  and the literacy rate for Scheduled Castes is 79.7 per cent and that for Scheduled Tribes 65.7 per cent. Mungantiwar said that the government proposes to increase the literacy rate especially of the 10th passed out in the coming years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.