Maharashtra economic survey: Growth sees a Maha dip amid Covid-19 pandemic
Amid the Covid-19 pandemic that forced months-long lockdown, the state’s growth has slipped in the negative, -8%, in 2020-21, the lowest in history, according to the economic survey report presented in the Assembly by deputy chief minister Ajit Pawar on Friday.
This also means the growth has dipped by 13 percentage points in 2020-21 over 2019-20. Barring agriculture, all other sectors, including industry and services, are expected to register a negative growth in the current financial year.
The pandemic has had a direct impact on the individual income owing to the loss of income and jobs. This resulted in the reduction in the per capita income to ₹1,88,784 in 20201-21, from ₹202,130 the previous year and ₹1,87,118 in 2018-19. The industry and services sectors are expected to see a
-11.3% and -9% growth in 2020-21, from 0.2% and 8.3% in 2019-20, respectively.
The agriculture sector is expected to grow by 11.7%, more than last year’s 6.1% in 2019-20. The agriculture sector had reported a growth of 0.7% in 2017-18 and 0.9% in 2018-19.
The finance minister is scheduled to present a deficit budget on Monday. Pawar had said a few weeks ago that the revenue deficit of the state is expected to be over ₹1.12 lakh crore owing to the economic crisis amid the pandemic. The economic survey presented on Friday reflects the bleak economic health of the state, said an official from the finance department.
The pandemic has also affected the Gross State Domestic Product (GSDP), which is expected to drop to ₹26,61,629 crore, ₹1,56,925 crore down from ₹28,18,555 crore in 2019-20. It was ₹25,79,628 crore in 2018-19.
The debt stock of the state is expected to touch ₹520,717 crore in 2020-21, from ₹464,020 in 2019-20, and is 19.6% of the GSDP. The percentage of fiscal deficit to GSDP is 2.1%. The interest paid on the debts in the current financial year is ₹35,531 crore.
The revenue of the state during the current fiscal, was hit badly owing to the pandemic, the report has stated. “The revenue collection between April and December 2020 was ₹1,76,450 crore (or 50.8%) of the estimated receipts of ₹3,47,457 crore in the 2020-21,” the report stated.
This means the estimated revenue is expected to report a huge deficit in the current fiscal, badly affecting the spending on development works and social schemes. The state had planned 68.7% of the revenue receipts on development works in 2020-21.The budget had earmarked 17.8% of its funds for capital expenditure. The state has received ₹3,09,881 crore in 2019-20, the report has stated.
Mumbai University economist Neeraj Hatekar said the revival of the economy may take one or one-and-a-half years. “We have been studying the industrial units in Dharavi, which are facing shortage of material leading to a hike in its cost. To cut cost, the units have reduced the wages, although 95% of the workers migrated to their native places are back. This is an indicative picture for all other industries. The revival is expected in one or one-and-half-a-year in big cities and in the next six-eight months in smaller cities and towns. To record pre-Covid growth rate, we will have to register a growth of around 13%, which is possible next year, as we are starting at a low base,” he said.
Former finance minister and BJP leader Sudhir Mungantiwar has blamed the Maharashtra Vikas Aghadi government. “The figures from the economic survey are disturbing. The dip in the growth rate is a result of the failure of the state government to take corrective steps during the pandemic.”
The agriculture growth has been attributed to satisfactory rainfall (113.4% of normal rainfall) and overall increase in agricultural production. “The crops sector is expected to grow by 16.2%, livestock by 4.4% and forestry and logging by 5.7%,” it has stated.
The production of cereals, pulses, oilseeds, cotton and sugarcane is expected to increase by 60, 14, 28, 33 and 40%, respectively.
Manufacturing and construction sectors were hit the hardest as their growth dipped to -11.8% and -14.6% respectively, contributing to the drop in the industry’s growth to -11.3% , the report has stated. It says the pandemic’s impact on trade, repairs, hotels and restaurants and transport will lead to a growth of -9%.
“The Maharashtra government has been boasting about the whopping investment brought in the state over the last one year. Chief minister Uddhav Thackeray recently announced to have signed memorandum of understanding for investment worth crores of rupees, but the state should ensure that the investment actually materialises. The industry sector will have an impact on other sectors and thus needs to be given due importance,” said Santosh Mandlecha, president, Maharashtra Chamber of Commerce, Industry and Agriculture.