Maharashtra economic growth to fall from 9.4% to 7.6% in 2023-24

Mumbai: Maharashtra’s economy is expected to grow at 7.6% in the financial year 2023-24, which is at par with the growth of the Indian economy but lower than 9.4% recorded in 2022-23, according to the state’s latest economic survey.

The state’s per capita income is expected to grow to ₹2,77,603 in 2023-24 from ₹2,52,389 crore in 2022-23. However, in terms of ranking among states for per capita income, Maharashtra dropped from fifth last year to sixth, behind Telangana, Karnataka, Haryana, Tamil Nadu, and Gujarat. Mumbai’s per capita income of ₹4 lakh is the highest among all 36 state districts, followed by Thane, Pune, Nagpur, and Raigad, where it ranges between ₹2.5 lakh ₹3.5 lakh.

Deputy chief minister Ajit Pawar, who handles the finance portfolio, presented the economic survey for the financial year ended March 2024 in the Maharashtra legislature on Thursday, the first day of the monsoon session. Pawar will present the full state budget for the remainder of financial year 2024-25 on Friday.

Although Maharashtra is the top state in terms of attracting foreign direct investment, the investment is expected to marginally decrease to ₹1,00,112 crore in 2023-24, from ₹1,18,422 crore in 2022-23 and ₹1,14,964 crore in 2021-22. The survey also shows that the state’s debt burden has increased to ₹7,11,278 crore from ₹6,49,699 crore in 2022-23.

On the brighter side, Maharashtra’s economy contributed the highest (13.9%) to India’s GDP, much ahead of Tamil Nadu (8.7%) in second place. The state GDP stood at ₹40,44,251 crore, growing from ₹36,45,884 crore in 2022-23 and ₹31,44,138 crore in 2021-22.

The services sector, which is the highest contributor to the state GDP, is expected to grow at 8.8%, a drop of a whopping 4.2% from 2022-23. The drop was attributed to a decrease in services in the trade, hotels-restaurants and real estate sectors.

The industries sector is expected to grow by 7.6%, up from 5.5% in 2022-23. Within this sector, the manufacturing segment is expected to grow significantly from 2.1% to 7.5%, although the construction segment is expected to register a dip from 14.5% in 2022-23 to 6.2% in 2023-24.

The agriculture and allied activities sector is expected to grow at 1.9% in 2023-24. The crop sub-sector is expected to register a negative growth of 1.5%, while others like livestock (6.1%), forestry and logging (9.2) and fishing and aquaculture (2.9%) are expected to grow.

The erratic and inadequate rainfall during the last monsoon has badly affected the agriculture sector, resulting in a drop in growth and crop production. The state registered just 86.4% of the average rainfall in 2023-24. The production of cereals, pulses, oilseeds, and sugarcane is expected to decrease by 23%, 10%, 2%, and 17%, respectively. Cotton production is also expected to drop by 3%.

The state’s revenue receipts are expected to stand at ₹4,86,116 crore in 2023-24, as against ₹4,05,678 crore in 2022-23. Revenue expenditure, meanwhile, was ₹5,05,647 crore in 2023-24, compared with ₹4,07,614 crore in the previous year. The state government’s debt continues to see an upward trend: it is now estimated to reach ₹7,11,278 crore, from ₹6,29,235 crore in 2022-23 and ₹5,76,868 crore in 2021-22.

An official from the state finance department clarified that although the financial year concluded in March, the economic survey has estimated figures of the growth that get vetted by the accountant general of Maharashtra by September-October every year.

“The final figures of the growth and revenue-fiscal deficit come after the accounts are finalised. Though [growth] is estimated at 7.6% for 2023-24, it may go up, like it rose to 9.4% in 2022-23 from the projected growth of 6.8% in March last year,” the official said.