State Contribution to GDP in the Indian Economy: EAC-PM Report

What’s The News?

(GDP) Recently, ‘Relative Economic Performance of Indian States: 1960-61 to 2023-24’ paper has been released by the Economic Advisory Council to the Prime Minister (EAC-PM).

Key Findings

Northern States:

Delhi

Notable increase from 1.4 percent to 3.6 percent

Haryana

Haryana’s share of India’s GDP bypass that of Punjab, and its relative per capita income has reached 176.8 percent, compared to Punjab’s 106.7 percent in 2023-24. 

Punjab

Per Capita Income 119.6 per cent in 1960-61

Per capita income 106.7 per cent in 2023-24

Its economy has deteriorated after 1991. 

Western states:

Maharashtra

Maintained the highest share of India’s GDP for almost all of the period now at 150.7 per cent.

Gujarat

It’s share began to increase rapidly- from 6.4 percent in 2000-01 to 8.1 percent in 2022-23. 

Goa

Goa’s relative per capita income doubled from 144 per cent in 1970-71 to 290 per cent in 2023-24

Eastern states:

West Bengal

Per capita income has declined to 83.7 percent in 2023-24 from 127.5 percent.

Bihar

The relative per capita income of undivided Bihar was 70.3 percent in 1960- 61, it declined to 31 percent in 2000-01 for the bifurcated state of Bihar. 

Odisha 

Per capita income increased from 54.3 percent in 1990- 91 to 88.5 percent in 2023-24. 

Southern states:

• In 2023-24, Karnataka, Andhra Pradesh, Telangana, Kerala and Tamil Nadu together accounted for approximately 30 percent of India’s GDP. 
• In addition, per capita income of all southern states became higher than the national average after 1991. 

Central states: 

Uttar Pradesh

Had a share of 14.4 percent in India’s GDP in 1960-61

Madhya Pradesh

Its relative per capita income increased from 60.1 percent in 2010-11 to 77.4 percent in 2023-24. 

North-eastern states:

Sikkim

 In 1980-81, Sikkim’s per capita income was below the national average. However, it’s per capita income surged from around 100 percent of the national average in 2000-01 to 320 percent in 2023-24. 

Assam

Experienced a decline reaching 73.7 percent in 2023- 24.

Analysis

In the mid-20th century, West Bengal was the pride of India’s economic landscape, known for its thriving industries, bustling trade, and strong intellectual capital. Kolkata, the capital, was a major hub for jute, steel, and textiles, contributing significantly to the nation’s GDP. However, in recent years, the state has faced a significant economic downturn. According to a recent report published by the Chief Economic Advisor of India, West Bengal’s contribution to the national economy has dwindled due to declining industrial growth, labor issues, and policy challenges. The report highlights the urgent need for structural reforms to revive the state’s economic fortunes.

1960-61

3rd highest among all states

2023-24

Behind Odisha

The analysis of the economic performance of India’s eastern states presents a mixed picture. In contrast, Bihar, while stabilizing its economic position in the last two decades, remains far behind other states and requires significantly faster growth to close the gap. Odisha, traditionally seen as an underperformer, has demonstrated notable improvement in recent years, showcasing the potential for transformation with the right policies and initiatives. Interestingly, maritime states have generally outperformed other regions, highlighting the benefits of strategic port access, yet West Bengal remains an exception to this trend, emphasizing the unique challenges the state faces in reigniting its economic momentum.

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