Until just over a decade ago, Madhya Pradesh ranked low even among the BIMARU states — the traditionally backward states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh — in most economic parameters.
With the woeful basic infrastructure, attracting investments was a herculean task and the state remained industrially backward with a negative industrial growth from 2000-01 to 2003-04.
“With pot-holed roads, frequent power cuts and acute water scarcity, the scenario in the late 1990s was a nightmare for industry,” Dewas industry association president Ashok Khandelia said.
The infrastructure started improving after 2003 and over the last decade, the scenario has changed dramatically with the state’s gross domestic product (GDP) having expanded at a compound annual growth rate (CAGR) of 12.83% between 2004-05 and 2014-15.
The per capita income too has shot up from Rs 15,442 in 2004-05 to Rs 59,770 in 2014-15, as per the union finance ministry’s Economic Survey report.
With gradual increase in industrial investment inflow, the state’s GDP growth rate in industry sector, which was negative from 2000-01 to 2003-04, grew at an average rate of 8.08% from 2005-06 to 2013-14.
Experts attribute the high growth to rapid improvement in infrastructure that has attracted more investments and led to more job creation.
“Madhya Pradesh is no longer a Bimaru state as was the case a few years ago. MP’s GDP growth has been double that of the country in the last few years. The services sector has been growing at more than 10% year-on-year over the last seven years, while the state has been recording highest agriculture sector growth consistently over the last few years,” economist Jayantilal Bhandari said.
State chief secretary Anthony DeSa attributes the overall improvement in economic scenario to gradual industrialisation of the state and making agriculture a business of profit.
Another growth indicator shows that Madhya Pradesh has registered the second highest growth in direct tax collections between 2008-09 and 2014-15. According to Income tax department data, MP’s direct tax collection jumped 3.11 times from Rs 4,589 crore to Rs 14,262 crore over the six-year period.
The economic improvement is also reflected in corresponding improvement in human development indices with average infant mortality rate dropping from 76 (per 1,000 births) in 2001-05 to 54 in 2009-13, as per the Economic Survey data.
The number of households with access to safe drinking water has gone up from 68.4% in 2001 to 78% in 2011 although there is huge disparity between rural and urban regions.
However, despite the high growth in per capita income, Madhya Pradesh remains one of the poorest states in the country with Bihar, Uttar Pradesh, Jharkhand and Assam at the bottom of the rung.
Also, the annual per capita income of MP at Rs 59,770 is much below the national average of over Rs 80,000.
In terms of actual GDP numbers, the state has a long way to go before it enters the top league.