Madhya Pradesh now fastest growing state, Uttarakhand pips Bihar to reach second

According to the estimates, the share of these 11 key states would rise to 76 per cent by 2019-20 as against 68.1 per cent during 2009-10.

Written by Anil Sasi | New Delhi | Published:September 8, 2014 1:04 am

Madhya Pradesh outpaced all the major states to top the economic growth charts with a scorching 11 per cent growth in 2013-14 — a year when India recorded its second successive year of sub-5 per cent growth in the gross domestic product.

What is noteworthy is that high growth in Madhya Pradesh has happened despite the state’s industrial growth slipping to a new low during the year. Led by largely an agricultural boost and expansion by the services sector, Madhya Pradesh’s surge to the top has forced Bihar — which had been topping the growth charts in the last few years — to the third spot, with Uttarakhand moving up to second place.

If the growth rates of states during the last three years are to be taken into consideration, while Bihar continues to lead the charts with an over 11 per cent average growth rate, Madhya Pradesh is clearly the most consistent performer, having progressively improved its performance with every passing year and managing an average growth of 10.2 per cent during these three years.

This is a period when national gross domestic product or GDP went into a tailspin and is still to recover from it.

This three-year period is also when states such as Orissa, Uttar Pradesh, Chhattisgarh, Punjab and Karnataka appear to have faltered somewhat on the growth impetus.

While Gujarat has been a consistent performer at close to 8 per cent average growth, those showing a sharp improvement in their state domestic product growth, besides Madhya Pradesh, include Uttarakhand, Jharkhand and West Bengal.

According to CSO data, Madhya Pradesh’s gross state domestic product (GSDP) registered a double-digit growth of 11.08 per cent at constant prices, up from 9.9 per cent in 2012-13. In March 2014, its GSDP stood at Rs 2,38,530 crore.

The state has been showing a strong growth of above nine per cent since 2009-10, most of it on account of a high growth in the agriculture and allied sector, supplemented by a modest growth in the services sector.

Growth rates in these two sectors have helped compensate for the sluggish industrial performance in the state. Industrial sector in the state has been seeing subdued growth since 2009, expanding by only 2.1 per cent in 2013-14, down from 5.5 per cent in 2012-13.

This, according to the Centre for Monitoring the Indian Economy, is in contrast to all the major states, which are seeing a decline in the share of agriculture and allied sector in their GSDP.

Madhya Pradesh now ranks second highest in foodgrain production in the country, only after Uttar Pradesh, while non-food crops, especially oilseeds, also showed encouraging growth. The growth in agriculture is largely being attributed to the additional irrigation facilities created in the state in the last three years.

In 2013-14, the GDP — a measure of the value of goods and services produced in the country — grew by 4.7 per cent. The economy had grown 4.5 per cent in 2012-13, with growth being hit by high inflation, high interest rates and poor industrial sector growth.

India is expected to register a GDP growth of 5.4 per cent-5.9 per cent in the current fiscal, with the government betting on a return to a higher growth trajectory over the next two years.

According to a Dun and Bradstreet projection, 11 states — Madhya Pradesh, Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Karnataka, Rajasthan, Kerala, Bihar and Orissa — are slated to contribute significantly to future growth in national GDP.

According to the estimates, the share of these 11 key states would rise to 76 per cent by 2019-20 as against 68.1 per cent during 2009-10.

The GSDP contribution of the so-called BIMAROU states (Bihar, Madhya Pradesh, Rajasthan, Orissa and Uttar Pradesh) to incremental GDP growth was 18.8 per cent during 2000-01 and 2009-10.