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Economic Survey 2020-21: Hit by Covid-19, state’s economy contracts with negative growth of 8 per cent

Industry and services sector feel most pressure of slowdown; agriculture sector softens blow, set to grow by 11.7 per cent.

By: Express News Service | Mumbai |
March 5, 2021 11:34:34 pm
The positive growth in the agriculture sector, however, has softened the blow, on which 53 per cent of the state's population is dependent. (Illsutration by C R Sasikumar)

Maharashtra’s economy is witnessing a contraction with a negative growth of 8 per cent in 2020-21, with business activity and consumption hit by the Covid-19 pandemic.

According to the findings of State Economic Survey 2020-21, which was tabled by Deputy Chief Minister and state Finance Minister Ajit Pawar in the Assembly on Friday, industry and services sector have felt the pressure of the slowdown the most with demand contraction due to the pandemic. Industry will see a negative growth of 11.3 per cent while services will see a shrinking by about 9 per cent. The sector caters to about 60 per cent of the state’s gross domestic product (GDP).

The positive growth in the agriculture sector, however, has softened the blow, on which 53 per cent of the state’s population is dependent. Riding on the back of good rainfall, the sector is set to grow by 11.7 per cent. The state government has claimed that the sector was least impacted by the pandemic due to “timely and proactive measures”.

The state government stated that the agriculture sector was exempt from the Covid-19 lockdown, and that it took different measures with regard to transport and distribution of agricultural inputs, transport and sale of produce, online renewal of licences, coordination among state departments and use of modern technology. This, in turn, benefited agriculture and allied activities sector during lockdown, it added.

The state’s economy was forecast to grow by 5.7 per cent in 2019-20 but revised projections, released on Friday, pegged the actual growth at 5 per cent. The real gross state domestic product (GSDP) at constant (2011-12) market prices is Rs 19,62,539 crore, which is a reduction of 8 per cent over the past year.

For the first time since 2011-12, the per capita state income for 2020-21 is set to dip to Rs 1,88,784 lakh. Last year, the state’s per capita income stood at Rs 2,02,130 lakh that was higher than the national average of Rs 1,34,186 lakh. Maharashtra, however, is tenth overall in per capita rankings lagging behind states like Goa, Delhi, Karnataka, Telangana, Haryana, Tamil Nadu, Karnataka, Sikkim and Uttarakhand.

The debt stock of the state comprising accumulated unpaid loans and other liabilities is expected to be Rs 5.20 lakh crore. The state will be spending Rs 35,531 crore every year to service this debt.

Another worrying indicator is the rising unemployment with the survey finding that number of people on the live register of the state’s employment exchange at the end of December 2020 stood at 53.65 lakh, which is 7.51 per cent higher as compared to 49.90 lakh last year.

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