Maharashtra Economic Survey forecasts 12.1% growth in FY 2021-22, highest in a decade

Mumbai: The Economic Survey of Maharashtra has forecasted that the state economy will grow at 12.1 percent in the current financial year 2021-22 against the negative growth of -7.6 percent in the last FY 2020-21. The expected growth is highest in the decade and better than the national GDP, which is expected to grow at 8.9 percent in the ongoing fiscal.

The services and industries sectors, which are expected to grow at 13.5 percent and 11.9 percent respectively, are expected to drive the growth. The agriculture and allied activities sector is expected to grow by 4.4 percent -- 3 percent is from crops and 6.9 percent from livestock, forestry, logging, fishing.

The survey has pegged the growth of services and construction sectors at 13.5 percent and 9.5 percent, respectively.

The estimated growth rate of 12.1 percent estimated to be recorded in 2021-22 is the highest in the last decade. The highest growth rate reported so far was 9.2 percent in 2016-17, and 7.2 percent in 2015-16.

According to the survey, tabled in the state legislature on Thursday, the per capita income of the state is expected to touch ₹2,25,073 in the current FY, against ₹1,93,121 in the FY 20-21 and ₹1,96,100 in 2019-20.

Manoj Saunik, additional chief secretary, the finance department of state government, said, “The growth estimated in FY 21-22 is better than last year, due to the improved performance of the industry, services sectors.”

Owing to the outbreak of the Covid-19 pandemic and consequent lockdown in March 2020, the state had reported negative growth in key sectors in 2019-20. The industry sector had reported -10 percent growth, while it was -9 percent in the services sector last financial year.

The agriculture and allied activities sector had outperformed other sectors with 17.9 percent growth in 2019-20, which has dropped to 4.4 percent in 2021-22.

Though the growth rate in the industries sector is expected to be impressive, the survey has also pointed at the drop in foreign direct investment in Maharashtra in the current fiscal. The state could attract the FDI of ₹48,633 crore in FY 22, trailing behind Karnataka which saw an investment of ₹1,02,866 crore.

The previous year, in FY 21, Gujarat had outperformed other states by attracting the FDI of ₹1,62,830 crore, against FDI of ₹1,19,734 crore in Maharashtra. It however states that the state saw an FDI of ₹9,59,746 crore between April 2000 and September 2021. It is 28.2 percent of the total investment came in the country. The state attracted internal industrial investment of ₹1.88 crore under Magnetic Maharashtra 2.0 between June 2020 and December 2021 with the expected generation of 3.34 lakh jobs.

The GSDP (gross state domestic product) of the state is projected to be ₹31,97,782 crore in FY 2021-22 against 27,11,685 in the previous FY 21. The share of the state in the country’s normal GDP is highest at 14.2 percent among all the states. The fiscal deficit of the state to GSDP is 2.1 percent ( ₹66,641 crore), while the debt stock to GSDP is 19.2 percent for FY 22, and is estimated to be within the limit of 25 percent as per the FRPM Act provisions.

The debt burden on the state exchequer has increased to ₹6.15 lakh crore in FY 21-22, while the interest paid on it in the fiscal year is ₹42,998 crore.

The revenue receipts of the state are expected at ₹3,68,987 crore in 2021-22 as against ₹2,89,498 crore in FY 21, while the revenue expenditure of the state is ₹3,79,213 crore in21-22 as against ₹3,35,675 crore in FY21.

Rupesh Keer of Samarthan, the no-profit organisation which analyses state budgets, said, “The agriculture sector’s growth has dropped in the current financial year. The FDI has also decreased significantly. The more worrying fact about the state finances is the reduction in capital expenditure in the last few years.”

“Capital expenditure dropped to 19 percent in the last two years after earmarking more than 30 percent of the budget for it. The revenue receipts are expected to improve in the next financial year. The government should increase the outlay for the capital expenditure,” Keer added.

The state received 118.2 percent of the normal rainfall last monsoon though 22 of the 355 talukas received deficient rainfall. The Kharif 21-22 saw the sowing on 155.15 percent lakh hectares and the production of cereals, pulses, oilseeds, cotton and sugarcane is expected to decrease by 11, 27, 13, 30 and 0.4 percent, respectively, the economic survey has stated.

The production of the pulses is expected to increase in the rabi season by 14 percent, though the production of cereals and oilseeds are expected to go down by 21 and 7 percent respectively in this season over the previous year’s production.

The irrigation potential created by the state up to June 2020 by irrigation projects was 54.15 percent lakh hectares and the actual irrigation area was 41.60 lakh hectares in 2020-21. The year saw 0.68 lakh hectares areas newly brought under micro-irrigation, the survey has stated.

State deputy chief minister Ajit Pawar will be presenting the state government’s budget for the year 2022-23 in the state assembly on Friday.