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The recent State GDP estimates as per MosPI bring forth an interesting trend where the economic performance of large States is at odds with India’s Real GDP growth of 8.2 per cent, and relatively smaller States growing on par or higher than national levels.
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Maharashtra continues to hold its status as the largest economy, but had a sober FY24 growing 7.6 per cent year on year compared with 9.4 per cent growth in FY23. Services sector underperformed in Maharashtra, clocking just about 9 per cent growth (13 per cent). Agriculture, traditionally a key driver of Maharashtra, also grew slower in FY24 at 4 per cent.
Similarly in the case of UP, the 7.5 per cent growth in FY24 was driven by a 13 per cent rise in manufacturing GVA while services slowed, growing just 5 per cent. The Assembly elections pulled down Karnataka’s growth as an increase in subsidies in FY24 slowed overall GDP growth to 6.6 per cent (8.1 per cent) in FY24. Agriculture GVA declined 1 per cent year on year.
“While reasons are specific to the individual States, the analysis of State Budget documents shows that Odisha, Andhra Pradesh, Tamil Nadu and Rajasthan have posted good recovery post Covid period of FY20-24,” an analyst said.
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