Maharashtra may have got back on to the high growth path, at least by the government's calculations. Powered by a four-fold rise in the farm sector's growth rate, the state economy survey projects a gross state domestic product growth of 10.5% in 2010-11 as against 8.7% in the previous year.
According to the survey, tabled in the state legislature on Tuesday, the agriculture and allied activities sector is expected to grow at 12.5%, as against 3.1% recorded last year, on the back of increased agricultural production. The previous four years had seen farm production hit by untimely rains and floods. The services sector, which is a major source of employment in Mumbai, is projected as the other big growth driver. It is expected to grow at 10.9%, industry by 9.1%.
The projections come as Ajit Pawar, Sharad Pawar’s nephew and NCP leader, gets ready to present his first budget as state finance minister today. The budget, also the first since Prithviraj Chavan became chief minister, is crucial as the state has a debt of Rs2.1 lakh crore, and the government’s moves to raise revenue to reduce this deficit will be closely watched. The state has projected a revenue deficit of 0.7% of GSDP (Rs 7,654 crore) and a fiscal deficit of 2.4% of GSDP (Rs 24,294 crore).
The survey reveals that per capita income has increased by 16.9% over the previous fiscal, from Rs 64,238 to Rs 74,027. Inflation, on the other hand, has declined from 11% in April 2010 to 8.2% in January 2011.
The rise in per capita income is expected to lead to an increase in the state’s revenue. Tax collections would form more than 70% of the revenue receipts.
When he presents his first budget as head of finance department on Tuesday, deputy CM Ajit Pawar will have to consider the following...
Boost to urban areas: It is fast becoming an urban state with half its population living in cities that are badly governed and need sound infrastructure.
Energy: The state is reeling under power cuts. With the demand-supply shortfall crossing 5,000 MW daily, the government will have to give priority to augmenting the power generation capacity of the state.
Compensation to farmers: State farmers will be expecting the government to announce compensation for them.
Security: Since 26/11, security preparedness is top priority. Allocation for the home department is expected to increase.