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Maharashtra growth may not keep pace due to these factors

Agri distress and slump in realty to slow down GDP

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Agrarian distress triggered by various weather phenomenon is likely to slow down Maharashtra's growth compared with the pace of its economy in 2016-17, DNA has learnt from top government officials. The government will release the data on the state's gross domestic product for last financial year on March 8, when the Economic Survey will be presented in the legislature.

Maharashtra, which boasts of a robust industrial and services base, grew at 9.4 per cent for the fiscal 2017, helped by a record 12.5 per cent rise in agriculture due to rainfall ranging between 80 per cent and 120 per cent. But the good fortune didn't last until the next year.

Large tracts of farmland suffered because of less-than-normal rainfall, hailstorms, cyclone and unseasonal rains, threatening to take the steam out of the state GDP. As a result, the overall production of cereals, pulses, oilseeds, and cotton is expected to witness sluggish growth, said officials privy to the information. Sugarcane is likely to be the only aberration as cane growing areas had received good rainfall.

"Though Maharashtra is a highly urbanised and industrialised state, the economy is still driven by agriculture and allied activities. Agriculture production is expected to fall due to a decline in rainfall and hailstorms. There is a deficit in rainfall in agriculturally significant regions. This will affect the growth of gross state domestic product [GSDP] which may grow below 9.4 per cent in 2017-18,'' said a senior government official.

Agriculture and allied activities of the sector has an average share of 11.8 per cent in the total output, which stood at Rs 25.35 lakh crore in 2017-18, according to government data. State Finance Minister Sudhir Mungantiwar will table the Economic Survey for 2017-18 on Thursday, a day before the Budget.

Agriculture distress apart, a slump in real estate and construction sector may also impact the growth. Maharashtra has a big footprint in terms of real estate and construction sector.

The sources, however, didn't paint a grim picture of the state's economy. "The silver lining will be a wide base of manufacturing industry, and also a buoyant service sector which will arrest any drastic fall in the GSDP," said a source.

Officials said that the state's GSDP had dropped to 5.6 per cent for 2014-15, compared with 7.3 per cent the previous year and 7.8 per cent in 2012-13. The fall was also due to a dip in the growth in the agriculture and allied sectors and a fall in foodgrains production caused by erratic rainfall and a dry spell in some districts.

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