Maharashtra’s Growth Faces Challenges From Inter-District Disparities, Heavy Dependence On Mumbai: Report

Maharashtra’s vision of becoming a one trillion dollar economy in the next five years faces key challenges due to a regionally skewed development pattern and huge dependence on Mumbai, according to a report.

The report, which was presented to the 16th Finance Commission earlier this month, also listed out low agricultural productivity, rapid urbanisation, inadequate health and education infrastructure, demographic changes and climate change as hurdles to economic growth.

As per the revised estimates for 2023-24, the Konkan division contributes around 39% of the state’s Gross State Value Added or GSVA, with Mumbai’s share accounting for about 20%, it said. GSVA is a measure of the total economic output of a state.

The lowest contribution to the state’s GSVA comes from the Amravati division with a share of 5.8%, followed by the Nagpur division (9.3%). Despite a high gross state domestic product or GSDP, the per capita district income (at current prices) shows disparities, it said.

Only seven districts have a per capita income above the state average of Rs 2,78,681. In 27 districts, it is below average, according to the report.

At a national level, the per capita income in 12 districts of Maharashtra is the national average, it said.

The state faces a unique situation due to a regionally skewed development pattern and huge dependence on Mumbai, the report said, highlighting the challenges to achieve the vision of making the state a trillion-dollar economy.

According to the report, 53% of the state’s workforce is engaged in the agriculture sector, which contributes to 13% of the GSDP. This has led to serious issues related to employment, it said.

Participation of women in the workforce is also low in the economy. The slowing manufacturing sector further poses risks to economic growth and the employment scenario, it said.

About 75% of the farmland in Maharashtra is rain-fed, depending on the vagaries of monsoon, thus resulting in low agricultural productivity, the report said, adding that climate change has worsened this challenge.

It calls for efforts to build resilience in agriculture and allied sectors to boost economic growth and per capita income.

Maharashtra has the highest number of people in the country living in urban areas, and it is growing at a rapid pace, but insufficient resources with urban local bodies are leading to low levels of investments in city infrastructure, the report said.

Districts like Parbhani, Nandurbar and Gadchiroli suffer from inadequate health infrastructure, it said. The child sex ratio in certain districts is worrying, as also malnutrition affecting a large population, including women, according to the report.

Declining fertility rate and the proportion of people above 60 account for more than 10% of the state’s population. This is higher than the national average, indicating changing demographic trends, the report said.

The state will need to design suitable schemes for the elderly, the report stated.

“We seek support from the 16th Finance Commission in the form of a larger share in transfer of central funds, both devolution and grants in aid to help the state achieve the aspirational economic growth rate,” the report said.