The economic survey of the state tabled in the state legislature on Thursday has revealed a substantial dip in growth rate, estimated at 8.5% in 2011-12 against 11.3% during the last fiscal.
The gross state domestic product (GSDP), a measurement of the state's economic output, has taken a hit as agricultural growth fell to -9.1% in 2011-12 from 18.8% in the year before.
The report has reasoned that agricultural growth has been affected due to decline in the area under farming and uneven monsoon, which led to lower food grain production. Little wonder then we have been witnessing higher inflation, at 28.7%, in agricultural commodities compared to the all-India level of 9.9%.
The report outlines poor irrigation utilisation and low productivity of soil as major concerns in this sector for the state. "This points to an ongoing agrarian crisis and will lead to migration from rural to semi-urban and urban areas in hordes adding to the challenges in the cities,'' said Dr Ajay Dandekar, agrarian economist, who had chaired a study on farmers' suicides in Vidarbha for the high court.
Bureaucrats admit that land is being diverted for industrial purposes. The report points out that 22,216 hectares of land has been approved for various SEZs in the last five years.
Both the industry and services sector also recorded a slight dip from 2010-11, but managed to maintain the growth momentum at 9.1% and 10.1%. The industry sector witnessed a dip from 10.8% in 2010-11 as manufacturing industries plummeted to 4.2% growth due to the global slowdown. But the booming construction sector, which grew at 22.3%, bailed the sector out.
The services sector posted growth of 10.1%, with finance and insurance pushing up growth rates along with transport, hotels and communications businesses.
The silver lining in the state's growth story this year has been the performance of its industries.
In what may come as a major relief to state bureaucrats, Maharashtra has been ranked first in fetching industrial proposals and foreign direct investment (FDI) in the last two decades.
The state managed to attract 17,207 industrial proposals with an investment of Rs8.74 lakh crore with employment potential of 41 lakh people.