How the economies of poll-bound Haryana and Maharashtra have been faring in the last five years

Amidst slowing economic growth, two States – Haryana and Maharashtra – are set to go to polls on October 21. Both States, which are home to significant auto hubs, are going through their own set of challenges, such as muted business sentiment and poor job creation, largely due to the economic slowdown.

“Maharashtra has been growing at a steady pace. The industrial sector has also expanded at an impressive rate during the 13th State Assembly (FY2014-15 to 2018-19)… Though new investments are growing, so are stalled projects, which is a cause of concern,” said  a recent study by CARE Ratings.

The report also noted that in the case of Haryana, economic growth has been improving though industrial growth has been lagging. “The State has been witnessing fiscal pressures with sustained revenue deficit, fiscal deficit nearing the 3 per cent target…Although new investments have increased, stalled investments have more than doubled,” it said.

Gross State Domestic Product

Data collated by the agency shows that the Gross State Domestic Product for Maharashtra on an average grew by 7.6 per cent  in the last five years as well as in the period during the previous five years. During 2014-15 and 2018-19, the State’s services sector grew at an  average 9.1 per cent and industry at 7.2 per cent. Faced with problems of drought, the agriculture sector grew by a mere 0.1 per cent on average in the State.

Haryana’s GSDP grew at an average 8.7 per cent during both the 12th State Assembly and the 13th State Assembl. Agriculture sector grew at an average 2.5 per cent during the period but the State’s economy was led by the services sector, which contributed 50 per cent to the GSDP. Industrial sector had a 30 per cent share.

Industries

With slowdown in the auto sector, both States, which have auto hubs, have been facing troubles.

However, data from the Annual Survey of Industries shows that between 2014-15 and 2017-18, the number of factories in Maharashtra actually fell, though they grew in Haryana.

According to provisional numbers, Maharashtra had 27,010 factories in 2017-18 with 19.26 lakh workers engaged in them in 2017-18, against 28,601 factories in 2014-15 with 18.83 lakh workers.

In 2017-18, Haryana had 8,891 factories, against 8,243 in 2014-15. The number of people engaged in these factories stood at 8.58 lakh in 2017-18, compared to 7.44 lakh in 2014-15.

Fiscal indicators

A recent study of state finances by Motilal Oswal shows that total receipts of 17 States grew by only 4.1 per cent per annum in the first five months of this fiscal, which was at a decade-low.

“Maharashtra’s fiscal surplus declined from 31.4 per cent in the first five months of 2018-19 to only 2.3 per cent of Budget Estimate between April and August 2019,” the report titled Ecoscope noted.

Haryana has also had a sustained revenue deficit since 2009-10. During FY15-19, although the State adhered to the fiscal deficit target of 3 per cent, in three out of five years, the fiscal deficit to GSDP ratio was at 2.9 per cent, CARE Ratings said.