Going slow: State’s growth may dip to 5.7%
The drop in agricultural produce and the poor performance of other sectors such as manufacturing over the past two years is likely to slow down the economic growth this fiscal, the economic survey of the state for 2014-15 has revealed. While the growth rate was 7.3% last year, it is expected to dip to 5.7%.mumbai Updated: Mar 18, 2015 01:00 IST
The drop in agricultural produce and the poor performance of other sectors such as manufacturing over the past two years is likely to slow down the economic growth this fiscal, the economic survey of the state for 2014-15 has revealed. While the growth rate was 7.3% last year, it is expected to dip to 5.7%.
The agriculture and allied activities sector has registered a growth of (-) 8.5%, while agriculture showed a negative growth (-) 12.3%.The industry sector has registered a growth of 4% in 2014-15, a significant dip from 4.5% in 2013-14 and 9.2% in 2012-13. The service sector has showed a slight decline in growth to 8.1%, from the 8.6% and 8.1% in the previous two years.
The state’s financial picture, too, doesn’t seem rosy. The debt on the state has shot up to Rs3,00,477 crore — 17.81% of the gross state domestic produce (GSDP), the measurement of the economic output of the state. The revenue deficit in the fiscal is estimated at Rs4,103 crore, while the fiscal deficit is expected to be Rs30,965 crore. The revenue expenditure of the state is Rs1,84, 423 lakh crore, against the revenue receipts of Rs1,80,320 crore. The per capita income in the state — estimated at Rs1,17,091— showed an increase.
A major reason for the drop in GSDP is the drastic decline in the agricultural output because of deficient rainfall. The industries sector is expected to grow at a modest 4%, low compared to the past two years, which witnessed a growth of 4.5% and 9.2% respectively. Manufacturing and mining sectors, too, have been badly hit, with an expected growth of only 0.5% each. The estimated growth for the construction sector is 10.4%, from 9.7% in 2013-14. Under the services sector, the hotels, restaurants, transport, communication sectors are expected to register a slight decline to 6.9% from 7.6% and 9.1% in the past two years.
Though the state has been leading in industrial proposals with 18,709 between August 1991 and October 2014, the investment generated is Rs10.63 lakh crore, less than Gujarat which received Rs13.18 lakh crore in 25 years. Maharashtra attracted 9.86% of the total investment in the country, against 12.23% in Gujarat. Of the total proposals received, only 8,376 were commissioned with the investment of Rs2.54 lakh crore.
Experts have sounded an alarm over the agriculture sector. “It is high time the state invests in crop varieties that can stand the changing climate and natural calamities. The robust insurance ideas conceived by the private sector need to be set up to create confidence among farmers. The mid- and short-term measures for sustainable agriculture are the need of the hour and the government needs to act on it swiftly,” said economist Abhay Pethe.
“The industrial and service sector will pick up on their own. The slow growth is because of the global slowdown and tough competition from various states like Gujarat, Karnataka and Chennai. But the government should realize the challenge and act on the rising competition,” he said.
The state government, meanwhile, said it was aware of the problems.“The negative growth in agriculture is because of natural calamities such as unseasonal rain and hailstorm in the past few months. The situation may continue this year,” said state revenue minister Eknath Khadse.
The survey, in its second consecutive report, has failed to reveal the figures of the total area under irrigation. The figures stated in the survey two years ago, had sparked a controversy over corruption in the irrigation projects and led to a high-level inquiry. The current report, however, reveals the state machinery could utilize only 2% potential, against the 2.12% the previous year.