Country's three engines of growth

Maharashtra, Gujarat and Goa, the three States abutting the Arabian Sea on the West Coast of the country, could well be three coupled locomotives that are hauling India's overall growth numbers.

Be it the world's largest single location crude oil refining company, salt and soda ash manufacturing units, diamond processing units, textile units and groundnut fields in Gujarat; the stock, commodity, and currency exchanges, IT firms, banks, auto manufacturing and component companies, and sugarcane, grape and mango fields in Maharashtra; or the sun-kissed beaches of Goa that attract tourists in their millions from all over the world, the three contiguous States are veritable engines of growth.

Luring investments

In the last few years, the leadership in all the three States has been going all out to attract investments, both domestic and foreign, by offering various concessions and the facility of single-window clearance for the development, among others, of infrastructure - including power (conventional and non-conventional energy), roads, ports, airports, urban transport and special economic zones; irrigation, water supply, hi-tech manufacturing, health, and education. The importance of the Western States in taking the India growth story forward is underscored by the fact that in the 11th Plan (2007-12) the growth rate of the gross state domestic product of Maharashtra is expected to be 9.1 per cent (vs 8.6 per cent in the 10th Plan), Gujarat (11.2 per cent vs 10.9 per cent), and Goa (12.1 per cent vs 9.3 per cent).

The above mentioned growth in GSDP (which is the sum of consumer spending, Government spending, gross investments and net exports from a State in a year) has to be seen in the context of the expected 9.1 per cent (vs 8.4 per cent in the 10{+t}{+h} Plan) median growth for 21 frontline States (barring North Eastern Hill States and Union Territories), according to the mid-term appraisal of the Plan.

growth projections

The higher growth projections for ‘Amchi' Maharashtra, ‘Aapro' Gujarat, and ‘Amchem' Goa by the Planning Commission are based on an assessment of the ground level activity on the industrial, service and agriculture fronts by the Planning Commission.

That these States are relatively prosperous as compared to the others is also brought home by the fact that in 2009-10 Maharashtra's per capita income was Rs 74,027 (vs Rs 64,238 in 2008-09), Gujarat (Rs 63,961 vs Rs 55,140) and Goa (Rs 1,32,719 vs Rs 1,19,273). The average per capita income for these western States is much above the national average of Rs 46,492 crore (vs Rs 40,605).

Only Chandigarh, Delhi, Puducherry (all Union Territories) and Haryana per capita income higher than Maharashtra and Gujarat.

While strong GSDP and the per capita income numbers tell us a compelling story of the economic vibrancy of the three States, credit also needs to be given to the banking system which has supported the entrepreneurs, traders, agriculturists, artisans, tour operators, et al in realising their dreams.

banking statistics

Consider the banking statistics. The Western region (including the Union Territories of Dadra & Nagar Haveli, and Daman & Diu) accounted for nearly a third of the outstanding credit and deposits of commercial banks as on March-end 2010, according to the latest RBI data, that is, almost a third of banks' balance sheet size is on account of business originating from here.

Maharashtra alone accounted for 27 per cent of the total outstanding credit of Rs 33.45 lakh crore as on March-end 2010. Gujarat and Goa accounted for around 5 per cent and 0.24 per cent respectively of the total outstanding credit.

The Southern region (four States and two UTs) and the Northern region (five States and two UTs) accounted for about 28 per cent and 22.5 per cent respectively of the total outstanding credit.

When it comes to distribution of deposits, Maharashtra alone accounted for 26 per cent of the total outstanding deposits of Rs 45.61 lakh crore as on March-end 2010. Gujarat and Goa accounted for 5 per cent and 0.64 per cent respectively of the total outstanding deposits.

The Northern and the Southern regions accounted for about 22 per cent and 21.5 per cent respectively of the total outstanding deposits.

per capita

Going by the GSDP and per capita numbers and the distribution of bank credit and deposits, the Western region is a goldmine for developing business for banks. It's no wonder that scheduled commercial banks have nearly 15 per cent of their country-wide branch network (of 86,960 branches/ offices) in Maharashtra and Gujarat.

Bankers are eyeing the proverbial pot of gold at the end of the rainbow in each of these three States. What lends promise of of bright business prospects are progressive policies, which won't change with changes in political dispensation, conducive business environment, which promotes entrepreneurship, and relatively stable social development indicators.

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