The Economic Advisory Council to the Prime Minister (EAC-PM) has recently released a report titled ‘Relative Economic Performance of Indian States: 1960-61 to 2023-24.’ The report has highlighted a significant disparity in the economic performance of Indian states from 1960-61 to 2023-24. Maharashtra stands out in this study owing to its unique positioning.
One of the key findings of the report, however, has kicked up a political storm in Maharashtra. There is a spate of claims and counterclaims between the ruling Maha Yuti and the opposition-led Maha Vikas Aghadi (MVA). While no serious discussion about Maharashtra’s financial situation has taken place over the past two years on any political platform, the finding has come handy as a tool to take swipes at each other. The other inference, that Gujarat is progressing with relatively faster pace, has added another angle to the debate.
That controversial inference has recorded that though Maharashtra remains the largest GDP contributor at 13.30 percent, its share has declined from over 15 percent in the past in the national coffers.
The report says that southern states like Karnataka, Andhra Pradesh, Telangana, Kerala and Tamil Nadu have shown that they are major contributors to India’s GDP, accounting for about 30 percent, by March 2024. Their growth has accelerated after liberalization and that they have shown significant advancements in sectors like technology and industry.
On the Per Capita Income (PCI) front, Delhi, Telangana, Karnataka and Haryana have shown the highest relative PCI in 2023-24. Delhi’s PCI is at over 250 percent of the national average. While Gujarat’s score is more than 160 percent, Maharashtra at 150 percent has maintained its performance of achieving the above-average PCI since the 1960s.
Large states like Uttar Pradesh and Bihar have shown a poor performance on both counts, PCI and their GDP share. Whereas UP contributes 9.5 percent, Bihar’s share is only 4.3 percent. Together, the two states house almost 50 crore of the national population.
The report has underscored the imperative for a thorough investigation into the policies and factors which impact the state-level economic growth, especially in view of the widening regional disparities across India.
Noting that Gujarat and Maharashtra have a strong, diverse manufacturing base in sectors like textiles, chemicals and engineering, the report has attributed their growth to their investment-friendly policies which have created a pro-business environment, thereby attracting significant domestic and foreign investments. The report has lauded their policy framework about agriculture. In part, it says that Maharashtra and Kerala have adopted sustainable agricultural practices such as organic farming, crop diversification, water-efficient irrigation techniques, agroforestry and diversified outputs, which have resulted in boosting productivity and food security. The government’s support for irrigation development, market access and technology promotion have further improved agricultural performance which has pushed up the overall economic growth.
With spectacular infrastructure development initiatives, Maharashtra and Gujarat have created a strong regional connectivity network. It has especially given credit to Gujarat’s ports and Tamil Nadu’s roadways for enhancing the trade activity. Owing to the proximity to major markets, local demands have multiplied and have accelerated economic growth in these states.
The report has concluded that the steady growth in the western and southern states is a result of strategic planning, strong industrial and service sectors, effective government policies and a focus on sustainable practices. As these states continue to innovate and adapt to changing economic dynamics, they play a crucial role in driving India towards its goal of becoming a USD 7 trillion economy by 2030. Significantly, Maharashtra aspires to become a USD 1 trillion powerhouse even before that due date.
However, the main challenge for Maharashtra is the removal of regional developmental disparities. All political parties and their leaders agree that there is an urgent need to end these disparities and imbalances. But there is little proactive plan implementation. Though they rue the underdevelopment in the state, not much serious effort is seen made towards granting priorities to specially backward, rural and remote and undeveloped regions.
Time and again, experts have highlighted the need to make development inclusive with a strong emphasis on backward regions. The case of Vidarbha is a classic example. The region is undoubtedly prosperous in its natural resources. However, a lack of political awareness and strong leadership in the region has aggravated its backwardness while some pockets in the western region have shown consistent growth.
There are ample analyses to show that the failure of planning and developmental priorities for the Union government and the state, too, have resulted in skewed regional development structures. These bottlenecks have to be done away with for overcoming the backwardness and imbalance of development. In Maharashtra, numerous young people migrate in search of higher and technical education, employment and livelihood. Their choosing larger cities leads to the rank urbanisation which continues without proper civic planning.
While liberalization, globalization and privatization have turned their back, in general, to the backward regions, they have swelled the already bursting urban agglomerations. The impact of such causes can be seen by studying the plight of cotton farmers, again in some Vidarbha districts. Thus, the malady is known but the remedy remains elusive. These unfortunate farmer suicides need to be analysed afresh since multiple announcements have been made in the past about developing textile industries in the region but to no effect.
Backwardness and agriculture go hand in hand. The import of agricultural produce, the policies of the Union government and the restrictions imposed by the international agreements also have an effect on agricultural pricing. Despite its growth in some sectors, agriculture is still the backbone of Maharashtra’s rural economy. If structured according to the space and situations through the implementation of best agricultural practices suiting to local conditions, the state’s agro complexion can undergo a facelift within a decade. The half a dozen agricultural universities can play a major role in this effort.
Maharashtra is regarded as the most developed state in the country and its leadership as well as its people deserve kudos for this achievement. However, the scars and warts on its rural face are generally unknown to people from other parts of the country. To change this sorry state of affairs, the planners need to work with priorities for development of rural areas. Besides bringing in prosperity, these efforts will reduce regional developmental problems and forced migration.
The state’s youth power will have to be harnessed in this nation-building endeavour. All political parties and leaders will have to recognize this and undertake initiatives like skill development and better farm practices. This will make Maharashtra a more powerful state with social amity and prosperity.
A Column By
Dilip Chaware – Senior Editor
A media professional for 43 years, with extensive experience of writing on
a variety of subjects; he is also a documentary producer and book author.
