In the post- Covid era most of the States are performing well above the pre-pandemic levels. The lead economic indicators have shown a significant growth above the pre-pandemic levels, said an analysis conducted by the Industry body, PHD Chamber of Commerce and Industry.
The analysis has been undertaken on five lead indicators including the Growth of Gross State Domestic Product (GSDP), Gross Fiscal Deficit as a percentage of Gross State Domestic Product (GSDP), Capital Expenditure, State-Wise Per Capita availability of Power, and Growth of Social Sector Expenditure.28 States are resilient in GSDP growth scenario, 24 States have a consistently outstanding supplying power, 23 States were steadily increasing their spending in the social sector, 13 performed well in increasing their CAPEX and 6 States have resilient fiscal balance, said the analysis by the Industry body PHDCCI.
In the growth of GSDP almost all the States are above the growth levels of the pre-pandemic years, said the industry body PHDCCI. States including Gujarat, Kerala, Telangana, Rajasthan, West Bengal, Bihar, Karnataka, Uttar Pradesh, Haryana and Odisha among others have shown high growth in their respective GSDP in 2021-22 and 2022-23.States characterized as resilient in their fiscal balance include Andhra Pradesh, Uttarakhand, Odisha, Gujarat, Haryana and Chattisgarh.
States that demonstrated remarkable resilience in their capital expenditure, include, among others, Assam, Bihar, Goa, Haryana, Gujarat, Jammu & Kashmir, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand, West Bengal and NCT Delhi.
Power availability marks the capability of the State’s infrastructure, the industrial potential and well-being of the citizens. A comparative analysis of power availability during pre- and post-pandemic years exhibits the high resilience among the twenty-six States except Bihar, Manipur, and Mizoram.
States’ Social services spending during pre and post pandemic years exhibits the high resilience, in the most of the States, including Andhra Pradesh, Assam, Bihar, Chhattisgarh, Goa, Haryana, Jammu & Kashmir, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Telangana, Uttar Pradesh, Uttarakhand, West Bengal, and NCT Delhi, among other States.Going ahead, the PHD Chamber suggests a seven-pronged strategy to further enhance the GSDP of the States along with other socio-economic parameters. These include focus on,
Ease of Doing business: States need to improve their performance in the Ease of Doing Business and reduce the cost of doing business to attract private and foreign investments.
Boost Infrastructural Development: Provision of high quality infrastructure is the key to enhancing the industrial setup by power sector reforms, building the tourism industry and bringing better connectivity of States.
Sustainable Development: Prioritizing the use of environmentally friendly technologies to support States’ sustainable growth by effective use of waste land, land reforms, and strengthening land bank.
Promote services sector activity: State governments must create a services-led growth strategy that prioritizes industries such as health, education, IT, logistics, knowledge-based and others in order to support the expansion of the service sector.
Strategy to boost ‘Exports’:Additional resources and incentives must be made available for State based Exporting Units in order to boost exports from States.
Enhance Skill Development:India is a young country with a large demographic dividend. The States must prioritize skill development, research and innovation for increased labor productivity, to extract this dividend.
Adopt Best Practices: Mutual learning should be promoted among all States since it helps formulate policies that support the Country’s development agenda. States ought to collaborate on capacity building and best practices exchange.
The Study concludes that most of the States are resilient in the post Covid era and are performing well above the pandemic level. Hence, the States are the thrust engines to set India in motion for a higher growth path for achieving the goal of developed India by 2047, said an analysis of the PHD Chamber of Commerce and Industry.
