Gujarat, MP, Haryana fastest growing states in past 4 financial yrs: Crisil

Photo: Shutterstock
Gujarat, Madhya Pradesh, and Haryana were the top three fastest-growing states in the last four financial years, while Punjab, UP and Kerala featured in the bottom three, a report by Crisil said on Thursday.  

There are wide divergences in state-level performance as they are getting exposed to increasing competition, said the report titled 'States of Growth' by ratings firm Crisil.

The performance of states was gauged on parameters like growth, inflation, and fiscal health.

"Gujarat, Madhya Pradesh, and Haryana were the fastest growing states between fiscals 2013 and 2017. Bringing up the bottom were Punjab, Uttar Pradesh and Kerala," said the report.

Gujarat was the top performer in construction and manufacturing growth, while Chhattisgarh and Haryana were among the top performers in manufacturing and trade, transportation and communication services, it said. 

"These states, therefore, are likely to have been more successful than others in job creation. In Gujarat specifically, the share of manufacturing has jumped from 28.4 per cent to 34.4 per cent of gross value added (GVA) which is close to levels seen in China."

These states recorded the highest growth in aggregate GVA of labour-intensive sectors.

The report pointed out that the poorer states aren't growing faster.

States with the lowest GDP growth during 2013 to 2017, Kerala, Punjab, and Uttar Pradesh, saw below-average growth in GVA of their labour-intensive sectors.

On price rise front, inflation in 11 major states fell faster than all-India average. In fastest growing Gujarat, Haryana and Madhya Pradesh, it stayed below the national average of 6.8 per cent.

Going by the fiscal math, the report revealed a mixed picture as some states were highly indebted and ran large deficits and other continued to perform well on both fronts.

On the level of indebtedness and deficit, Chhattisgarh, Karnataka, and Maharashtra were the top three states and Uttar Pradesh, Punjab and Rajasthan came in the bottom three.

Chhattisgarh, Karnataka, Maharashtra, Gujarat, and Telangana were among the states which successfully managed high growth levels while keeping their fiscal deficits below 3 per cent.

On the contrary, states which have lower growth rates despite their fiscal deficits overshooting the 3 per cent target are Kerala, Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh, it added.

"We conclude that Gujarat and Maharashtra performed well on all the three key macroeconomic parameters, having a growth rate above the national average, inflation and debt levels below the national average, and fiscal deficit less than the target set by the Fiscal Responsibility and Budget Management (FRBM) Act between fiscals 2013 and 2017," Crisil said.

Conversely, Bihar, Rajasthan and Uttar Pradesh were laggards across these parameters with low growth rate and high inflation and debt compared with the national average, and a fiscal deficit overshooting the FRBM target.   

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel