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Maharashtra headed for negative growth

Chief minister Prithviraj Chavan and his deputy chief minister Ajit Pawar will have to manage money better and explore new avenues for revenue generation to overcome the slowdown in the economy.

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The Democratic Front government has a difficult road map ahead. The Economic Survey for Maharashtra (2011-12) tabled by the Maharashtra government in the state legislature on Thursday has projected an overall negative growth in state.

Chief minister Prithviraj Chavan and his deputy chief minister Ajit Pawar, who is also the finance minister, will have to manage money better and explore new avenues for revenue generation to overcome the slowdown in the economy.

The survey reveals Gross State Domestic Product (GSDP) growth at 8.5% in 2011-12 as against 11.3% in 2010-11. The state debt is expected to cross Rs2,26,926 crore, which constitutes 18.2% of the GSDP.

The most alarming situation arises from agriculture and allied sectors, which registered a negative growth of 5.1%.

At a time when the Centre is keen on pushing its Food For All Bill, Maharashtra seems to have taken a major beating on steep decline in production of food grains.  Food grains register a fall of 23% with 118.09 lakh metric tonnes production in 2011-12 as against 154.19 lakh metric tonnes in 2010-11. One of the major reasons attributed for this shortfall is the delayed and erratic rainfall in Vidarbha and Marathwada regions.

The 9.1% growth rate in the industry sector and 10.1% in the service sector are also below expectations. And, inflation is being held responsible for the slow growth in the manufacturing and service sectors.

The inflation rate for January 2012 was 6.6% against 9.5% in the same period last year. The food inflation for January 2012 was -0.5% as against 16.7% for January 2011.

In spite of massive investments, the growth in irrigation and power sectors are not up to the mark. The gross irrigation area in state shows just one percentage point rise from 17.8% to 17.9% within a year.

BJP legislator Devendra Fadnavis says: “Despite spending Rs50,000 crore, why has the state not registered beyond 17.9% growth? The national average growth rate in irrigation sector is as high as 45.3%.”

The government, which had promised to make the state loadshedding-free, cannot explain the growing wedge between the demand and supply in 2011-12. “In the last one year, power generation has not increased beyond 2%, while demand exceeded beyond 10%,” says Fadnavis.

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