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Economic Survey pegs Maharashtra's GSDP at 7.33%

Mungatiwar calls it high compared to India’s 6.5% growth

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Sudhir Mungantiwar
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Maharashtra's economy is expected to grow at 7.33 per cent in 2017-18 against 10 per cent in 2016-17. The Economic Survey for 2017-18, which was tabled in the state assembly on Thursday by Finance Minister Sudhir Mungantiwar, has clearly indicated tough days ahead for the government in the run up to the Assembly election slated for 2019.

The 2.7 per cent fall in the Gross State Domestic Product (GSDP) is attributed to minus 8.3 per cent growth in agriculture and allied services due to comparatively less rains (83 per cent of the normal monsoon). Agriculture production is expected to decrease substantially due to poor rains, leading to a likely growth of minus 14.4 per cent in the real GSVA of crops.

DNA had reported on March 7 that the GSDP will be down due to fall in the growth of agriculture and allied sectors. Mungantiwar, however, hastened to add that 7.33 per cent growth is quite high compared to the Indian economy's growth at 6.5 per cent.

Meanwhile, the deteriorating condition of the state's economy has also reflected in the state's increasing debt stock. The debt stock is expected to rise to Rs 4.13 lakh crore in 2017-18 against Rs 3.71 lakh crore in 2016-17, the interest burden to rise to Rs 31,037 crore against Rs 28,830 crore.

Similarly, the Gross State Value Added (GSVA) has dipped sharply to 6.6 per cent from 9.9 per cent in the same period. The decline in both GSDP and GSVA needs to be read against the backdrop of the state government's ambitious target of achieving a growth rate of 15.4 per cent so that the state's economy becomes a trillion dollar one by 2025.

The production of kharif crops, including cereal, will decrease by 4 per cent, pulses 46 per cent, oil seeds 15 per cent and cotton 44 per cent, while the production of sugarcane is expected to increase by 25 per cent. Rabi crops are also expected to register a fall. The production of cereals is expected to fall by 39 per cent, pulses 4 per cent and oil seeds 73 per cent.

The economic slowdown has also impacted the growth in the industry sector which is down at 6.5 per cent from 6.9 per cent, of which the manufacturing sector is at 7.6 per cent from 8.3 per cent. The services sector, identified as the key driver of the economy, is expected to grow at 9.7 per cent.

The advance estimates of the real GSDP at constant prices (2011-12) is expected to be Rs 19.59 lakh crore for 2017-18. The advance estimates of the nominal GSDP at current prices is expected to be Rs 24.96 lakh crore.

The per capita income (PCI) is estimated at Rs 1,80,596 in 2017-18 against Rs 1,65,491 in 2016-17. Mungantiwar said Maharashtra is the leading state amongst major states in PCI compared to Karnataka (Rs 1,57,474), Telangana (Rs 1,55,612), Tamil Nadu (Rs 1,53,263), and Andhra Pradesh (Rs 1,22,376).

Drop in farm growth

The production of kharip crops including cereal will decrease by 4%, pulses 46%, oil seeds 15% and cotton 44%, while the production of sugarcane is expected to increase by 25%. In case of rabi crops also there will be a fall.

The production of cereals is expected to fall by 39%, pulses 4% and oil seeds 73%.

During kharif season of 2017, sowing was completed on 150.45 lakh hectare against 149.99 lakh hectare in 2016 while the area under rabi crops substantially fell to 46.88 lakh hectare in 2017-18 against 68.29 lakh hectare.

Agriculture and allied services has average share of 11.9% in the total GSVA and it is growing at an average annual rate of 2%. The industry's share is 33.6%, with an annual growth rate of 6.1%, while the services sector, with an average share of 54.5% in total GSVA, will continue to grow annually at 8.8%.

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