The statement on Gujarat’s macroeconomic framework and an overview of the state of Gujarat’s economy noted that the gross state domestic product (GSDP) at constant prices fell by 5.46 per cent.
Though the Gujarat government has been trying to paint a rosy picture of the state even in this time of global slowdown, figures published by the state government in its annual statement under the Fiscal Responsibility Act indicate a different picture.
The statement on Gujarat’s macroeconomic framework and an overview of the state of Gujarat’s economy noted that the gross state domestic product (GSDP) at constant prices fell by 5.46 per cent in 2008-09 as compared to the previous fiscal year. The GSDP grew by 7.33 and 12.79 per cent in the two previous years. In 2008-09, the GSDP was recorded at Rs2,29,348 crore, while it was at Rs2,13,674 crore in 2007-08 and Rs1,89,436 crore in 2006-07.
The rate of growth of the GSDP in 2008-09 is the lowest in the last seven years. In 2002-03, the GSDP at constant prices registered 8.14 per cent growth as compared to the previous fiscal year. However, the state government can draw a measure of relief as the growth of the GSDP at current prices increased from 16.78 per cent in 2007-08 to 17.94 per cent in 2008-09. This figure had peaked in 2005-06, reaching 19.98 per cent.
Meanwhile, the state government has noticed a major fall in the growth rate of the state’s own revenue receipts (SORR) as well as that of the availability of funds from central devolution. In 2005-06, the annualised growth in tax revenue was 21.14 per cent, which has fallen drastically to 16.89 per cent in 2008-09. The growth rate in annualised growth in non-tax revenue has also fallen from a high of pick of 26.56 per cent in 2006-07 to a mere 8.86 per cent in 2008-09.
The annualised growth rate in revenue receipts from central taxes has fallen to 30.27 per cent from 52.01 per cent in 2005-06, while annualised growth rate in revenue receipts in the form of central grants has fallen from 32.35 per cent in 2005-06 to 24.25 per cent in 2008-09.
“Gujarat performing better than other states on many financial indicators, but we still need to drastically improve on many fronts if we want to ensure sustainable growth. The all in the GSDP growth rate and the major drops in the growth rates of SORR and central devolution are causes of concern,” a senior official in the finance department said.
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