Maharashtra’s growth to drop to 5.7%, says economic survey

Maharashtra’s economy is expected to grow at 5.7% in 2019-20, its lowest rate in the past eight years, according to the Economic Survey of Maharashtra report tabled

Maharashtra’s economy is expected to grow at 5.7% in 2019-20, its lowest rate in the past eight years, according to the Economic Survey of Maharashtra report tabled in the state legislature on Thursday.

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Against the backdrop of the slowdown, the state’s estimated growth rate is higher than India’s, which is 5%. According to the report, the state’s growth rate in 2018-19 was 6%, 1.5 percentage points down from the previous Bharatiya Janata Party (BJP) government’s estimate of 7.5%.

The industries and services sectors have taken a hit as they are expected to grow by 3.3% and 7.6 % respectively, against last year’s (2018-19) growth of 5.5% and 8.1%. The agriculture sector, however, is expected to register growth of 3.1%, up from the negative of 2.2% registered the previous year owing to the 112% rainfall in the monsoon.

The fall in the estimated growth rate of the gross state domestic product (GSDP) has been attributed to the losses the industries and services sector are expected to suffer.

The GSDP for 2019-20 is expected to be ₹28,78,583 crore.

It was ₹26,32,792 crore in 2018-19 and ₹23,82,570 crore in 2017-18.

The average share of the state contribution to the country’s gross domestic product (GDP) is expected to be 14.3%, the survey has stated.

The per capita income in the state is estimated to be ₹2.08 lakh, up from ₹1.92 lakh in 2018-19 and ₹1.75 lakh in 2017-18.

Maharashtra is fifth in per capita income in the country, with Haryana, Karnataka, Telangana and Tamil Nadu ahead of them.

The state’s revenue deficit is expected to be ₹20,293 crore (0.7% of GSDP) and fiscal deficit ₹61,670 crore (2.1% of GSDP). The state’s debt is estimated to be ₹4,71,642 crore in 2019-20 and is expected to touch the ₹5-lakh crore mark in the 2020-21 budget to be presented on Friday by finance minister Ajit Pawar.

The industrial investment in the state was dismal as the state could only attract investment of ₹37 crore till August 2019, against the projected investment of ₹26,540 crore. There was actual investment of ₹1,976 crore in 2018, against the projected investment of ₹86,163 crore. The total employment in the state dropped from 73.50 lakh in 2018 to 72.03 lakh in 2019.

Although Maharashtra attracted highest (29%) of foreign direct investment (FDI) among states in two decades, the investment through industrial projects in Maharashtra was less than Gujarat and Karnataka. The FDI inflows in 2019-20 was ₹25,316 crore, against ₹80,013 core in 2018-19 and ₹86,244 crore in 2017-18. The FDI investment in the state between April 2000 and September 2019 was ₹7,39,306 crore, against ₹2.57 lakh crore in Karnataka, ₹1.83 lakh crore in Tamil Nadu, ₹1.41 lakh crore in Gujarat and ₹1.09 lakh crore in Andhra Pradesh.

Production of cereals and pulses is expected to increase by 43% and 23%, while the production of oilseeds and cotton is expected to rise by 1% and 24% respectively. The production has gone up substantially in kharif season, despite the drop in sowing — 149.61 lakh hectares in 2019-20, against 153.44 lakh hectares last time. Rabi crops of cereals and pulses is expected to increase by a whopping 43% and 23%. “Satisfactory rainfall in the 2019 monsoon (112.6% of the average in 2019 and against the 73.6% in 2018) has helped better production and productivity in kharif and rabi seasons due to better irrigation potential and soil moisture. The production would have been better had a few districts not witnessed floods in August last year,” said an official from the agriculture department.

The kharif production of pulses, including moong, udad, are expected to register a drop by 30% and 17%, while the drop in production of groundnut and sesame is 12% and 68% respectively. Rabi production of oilseeds is expected to be a negative 24 %, with sunflower, rapeseed and mustard witnessing the highest reduction in production. The survey has remained silent once again on the percentage of gross irrigated area against gross cropped area. As per the percentage registered in 2000-01, the irrigation average of the state is 17.8%.

Compared to the earlier two years, the offences registered against women were 37,567 in 2019, against 35,497 in 2018 and 31,997 in 2017, the report stated.

Congress leader and public works department (PWD) minister Ashok Chavan has blamed the BJP for the drop in industrial investment in Maharashtra. “The BJP governments in state and at the Centre gave favourable treatment to Gujarat over Maharashtra, be it industrial investment or air services. Centre is spending crores on bullet train, besides shifting the International Financial Centre to Gujarat, to safeguard the interest of the neighbouring state. BJP should be blamed for this,” he said.

Meanwhile, former finance minister Sudhir Mungantiwar said, “Instead of blaming us, the MVA government should take the blame for fall in growth rate. They have been in power for the past four months now. We did get only two months in office last year as the remainig period was under code of conduct for two elections. Rather than anything else, the drop in the growth rate is due to the negative sentiments among the people after the MVA government has taken over.”

Ajit Pawar said, “The findings in the economic survey reports are alarming and worrisome. Owing to the wrong policies of the previous government, almost all the sectors have witnessed the fall in growth. We will ensure that the state is back on track and regain its top position.”

The growth rates of Maharashtra in the previous seven fiscals were 6.1% (2012-13): 6.9% (2013-14); 6.3% (2014-15); 7.2% (2015-16); 9.2% (2016-17); 6.5% (2017-18) and 6.0% (2018-19).