The economic performance of different states does not get the desired attention even though there is significant disparity among them. The mass exodus during the pandemic was a testimony to that. To better understand this and help policy makers make more informed decision, RBI began publishing annual state level data on a variety of parameters in 2016. Here is a brief analysis of the same based on the latest report released some days back.<\/p>\n
RBI\u2019s \u2018Handbook of statistics on Indian states\u2019, compiles data on as many as 172 different parameters<\/em> separately for all the states across demography, state domestic product, Agriculture, Industry, banking, government finances. The compilation is voluminous having close to 500 pages of information with data dating as far back as 1951. Several newer parameters have been added to gauge level of development more precisely such as \u2018number of government hospitals\u2019 being tracked since 2020-21, foodgrain storage capacity and utilization since 2019, SDGs (Sustainable Development Goals) Score since 2018 etc.<\/p>\n From the economic perspective, the most important parameter is the size of state\u2019s economy reflected in Gross State Domestic Product (GSDP). Maharashtra is the biggest state with GSDP of Rs 20.3 lakh crore (FY22, constant price) followed by Tamil Nadu at Rs 14.5 lakh crore (FY23), Gujarat – Rs 13.7 lakh crore (FY22) and Uttar Pradesh – Rs 13.1 lakh crore (FY23). (FY23 data for some of the states are not available). In contrast, Bihar and Jharkhand at Rs 4.4 lakh crore and Rs 2.6 lakh crore have significantly low GSDP among the large states. In terms of growth rate, most states have recorded growth in the range of 4-6% except Maharashtra which seems to have reached a saturation. Maharashtra has grown at only 1.8% CAGR since FY18, while Gujarat and Tamil Nadu have recorded growth rate of 6% and 5.2%. The states are still recovering from the impact of pandemic as growth rates for both these states stood at 8-9% before Covid. The poorer states like Bihar, UP, West Bengal and Jharkhand have all recorded growth in the range of 4-5%. These states, except Jharkhand, had recorded growth of 6-7% before pandemic.<\/p>\n While GSDP on standalone basis is an important parameter, a more useful measure is the per capita figure. While Maharashtra, Gujarat and the Southern states are among the affluent ones with per capita net state domestic product in the range of Rs 1.4-1.8 lakh, Eastern states lag far behind with Bihar, UP and Jharkhand having the lowest income at Rs 31,000, Rs 47,000 and Rs 60,000 respectively. (Figures for FY22 or FY23). Most of the states had recorded a decline in FY21 but have recovered subsequently. Haryana has the best per capita NSDP among the large states at Rs 1.8 lakh. This looks quite contradictory as the state also has a high unemployment rate. The reason for the dichotomy is that it also has a very high labor participation rate which leads to higher unemployment, yet higher prosperity. There is a significant variation among North-Eastern states with Sikkim being at the top with Rs 2.6 lakh and Manipur, Assam and Meghalaya at the other end with less than Rs 70,000.<\/p>\n An important point to note is the high share of agriculture in low per capita GSDP states. While agriculture contributes 4-7% of output in Maharashtra, Gujarat and Tamil Nadu, its shares is significantly higher at 15% in UP and 10% in Bihar, although low in Jharkhand. The largest agriculture producer in the country, Punjab has comparatively lower share of agriculture in its GSDP at 12%, down from 14% in FY18. A concerning trend is increase in share of agriculture in some of the states, most prominently, UP and Maharashtra between FY20 and Y22. This is possibly due to loss of jobs during the pandemic and people going back to agriculture to sustain themselves.<\/p>\n In terms of industrialization, Gujarat has the highest share of industry in its GSDP at 43%, followed by Jharkhand at 40%. Jharkhand\u2019s case is quite surprising and could be because of high share of mining. Other industrial states are Tamil Nadu at 34% whereas UP is at 30% which, again, looks quite surprising. Maharashtra\u2019s share is somewhat low at 27% which could be due to high contribution from financial services segment. There is another reason for concern in case of Maharashtra as the share has declined by 3.3% since FY18. For Bihar, the share is only 20%, almost unchanged since FY18.<\/p>\n Another important parameter is to evaluate how much different states have borrowed on their path of development. In terms of liabilities as a percent of state gross domestic product, Gujarat, Maharashtra and Tamil Nadu, all the three with highest per capita GSDP have achieved the best result with liabilities at just 14% of their GSDP. Punjab has the highest level at 29%, followed by West Bengal at 24%. The Finance Commission has repeatedly asked state governments to cut wasteful expenditure and bring down the ratio. In terms of absolute value, Tamil Nadu and UP have the highest liabilities at Rs 7.5 and Rs 7.1 lakh crore at the end of FY23. UP has shown significant belt tightening with liabilities increasing at only 6.5% CAGR during FY18-23, down from 12% earlier. (This could have been even lower in the absence of pandemic). Tamil Nadu at 18% and Bihar at 13% are among the states with high rate of increase, the rest being close to 10%. Aggregate liabilities of all the state governments stands at Rs 76 lakh crore, close to half the central government\u2019s liability of Rs 156 lakh crore.<\/p>\n The state\u2019s economic performance determines resources raised by the states and in turn, its performance on social parameters such as poverty rate, literacy etc. Among the states performing poorly on this count are Bihar with poverty rate of almost 34%, Jharkhand at 29% and UP at 23%. (Figures are from NFHS-5 carried out during 2019-21). For Bihar, this stood at over 50% as per NFHS-4 (2015-16). States which had high level of poverty in NFHS-4 but have reduced it significantly are Assam at 33%, Chhattisgarh – 30%, MP – 37%, Odisha – 29% and Rajasthan – 29%. States with lowest level of poverty are Kerala at just 0.6%, Tamil Nadu \u2013 2.2%, Andhra Pradesh – 6%, Himachal Pradesh – 5% and Punjab \u2013 4.8%.<\/p>\n Another social indicator which warrants mention is total fertility rate (TFR) defined as number of children that would be born per woman, replacement rate being 2.1. For the year 2020 (latest available), TFR stands highest at 3.0 for Bihar followed by 2.7 for UP and 2.6 for MP. While Bihar and UP have managed to bring it down by 0.5 and 0.6 since 2012, for MP, it is down only by 0.3. Among the states with low TFR are Kerala, Punjab, Tamil Nadu and West Bengal, all of them at less than 1.5 against national average of 2.0.<\/p>\n Trivia \u2013 Kerala had a higher population density of 860 per sq km than UP at 829 as per 2011 census.<\/p>\n