Good news: State all set to grow at 10.5%

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.

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.

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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 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.