Despite the ongoing challenges posed by the pandemic, geopolitical issues, inflation, and banking crisis, there is a positive news for India.
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An in-depth analysis of the budgets of the 17 largest states, which together account for nearly 90% of the country’s GDP, has indicated that nine of these states are projecting growth rates that surpass the national forecast of 10.5% for the 2024-24 fiscal year. These nine states have estimated an average nominal GDP growth rate of 14% for FY24, which is significantly higher than the country’s projected growth rate.
The states that have projected higher GDP growth rates for FY24 are Uttar Pradesh, Assam, Tamil Nadu, Gujarat, Haryana, Odisha, Rajasthan, Kerala, and Jharkhand.
According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), Uttar Pradesh is projected to be the top-performing state in the upcoming fiscal year, with a projected increase in nominal GDP of 19.1% compared to 6.9% growth in FY23. Assam anticipates a 15% expansion of its economy, while Tamil Nadu foresees a 14% growth rate similar to that of the previous fiscal year. Punjab expects a modest increase in growth, while Jharkhand aims to sustain its growth momentum.
Experts Divided on the Issue: Diverging Opinions and Perspectives
Due to the geopolitical situation and the aftermath of the COVID-19 pandemic, several experts are skeptical about these growth projections.
RBI
As per the Reserve Bank of India‘s (RBI) projections, the country’s real GDP growth, which factors in inflation, is expected to reach 6.4% during FY24. Additionally, the RBI forecasts inflation to be around 5.3% for FY24, resulting in an estimated nominal growth rate of approximately 11.7%.
Government
The projections made by the central government align with the country’s compound annual growth rate of 10.6% between FY19 and FY23. However, states with a positive outlook anticipate surpassing the overall national growth rate and improving their own economic performance.
IMF
As per the IMF’s forecast, the real GDP is expected to grow by 6.1% in FY2023/24. Accounting for an inflation rate of 5%, the IMF estimates India’s nominal GDP to be 11.1%.
The Benefits of a Higher State GDP for India: Boosting Economic Growth and Development
The higher GDP of certain states in India can provide several advantages for the country. For instance, higher state GDP implies a larger contribution to the national GDP, which can lead to increased revenue and resources for the central government. This, in turn, can lead to the implementation of better infrastructure, increased investments, and improved social welfare programs across the country. The increased GDP of states can aid India in becoming a $5 trillion economy much earlier than anticipated.
Moreover, states with higher GDP can attract more businesses and investments, which can help create more job opportunities, increase productivity, and contribute to economic growth. Additionally, higher state GDP can lead to an improved standard of living for residents, better education and healthcare facilities, and increased access to essential services.
Overall, the higher GDP of certain states in India can have a positive impact on the country’s economic development, social welfare, and standard of living.
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