NEW DELHI: Odisha, Assam, Tamil Nadu and Karnataka were among the major states which spearheaded India’s recovery from pandemic lows during FY20- FY25, by witnessing a CAGR of over 6% in gross state domestic product (GSDP), India Ratings said in a report.
India Ratings analysis of the latest GSDP numbers reveals that half of the 28 states have outperformed the national recovery rate, showcasing resilience and growth.
Gujarat, Rajasthan, Andhra Pradesh, Uttar Pradesh, Jharkhand, and Chhattisgarh recorded a CAGR between 5%-6%, contributing significantly to the national growth.
However, Maharashtra, Telangana, Punjab, Madhya Pradesh, and Bihar saw a CAGR of less than or equal to 5%.
“Despite this, the overall economic growth from FY20-FY25 has been impressive, with the national economy growing at a CAGR of 5.3% compared to multi-year low growth in FY20 (due to the economic slowdown) before the pandemic,” said Paras Jasrai, Economist, India Ratings.
While the national share of agriculture in GVA declined, states like Uttar Pradesh and Bihar saw significant growth in agriculture sector.
In manufacturing, Odisha, Assam, Jharkhand, Punjab, and Andhra Pradesh witnessed notable increases in manufacturing shares, driven by diverse sectors such as apparel, machinery, chemicals, and food products.
There were some states wherein the manufacturing sector lost its share in the economic activity at a sharper pace (more than 1pp) during FY20-FY24. These were Uttarakhand, Maharashtra, Uttar Pradesh and Madhya Pradesh.
The services sector was the leading growth engine for Uttarakhand, Himachal Pradesh, Chhattisgarh, Karnataka and Telangana during FY20-FY24.
India Ratings analysis underscored the importance of understanding subnational growth dynamics to appreciate the broader economic revival.
The state-wise and sub-sectoral trends provide valuable insights into the engines driving India’s recovery.
Odisha’s share of manufacturing increased to 26.7% of real GSVA in FY24 from 22.8% in FY20. The state has been traditionally a manufacturing base of basic metals and petroleum products, and an upcycle in commodity prices in the said period have had the ripple effect in increased production of such products at a rapid pace in the state. But, what has been favourable is the gradual diversification of manufacturing base.
For Assam, the share of manufacturing increased to 18.4% of the real GSVA in FY24 from 15.8% in FY20. This was propelled by a phenomenal recovery in the output of fabricated metal products, chemicals, petroleum products, beverages, etc during FY20-FY23.
Source: The Financial Express
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