Double whammy of lockdown, economic slowdown: Maharashtra to grow at minus 8% in 2021

Maharashtra’s economy, as per advance estimates, is expected to grow at minus 8 per cent during 2020-21, largely due to the Covid-19 induced lockdown and economic downturn, according to the Economic Survey 2020-21 tabled in the state legislature on Friday. The minus 8 per cent growth is in line with India's growth, estimated at minus 8 per cent during 2020-21. In 2019-20, Maharashtra had clocked 5.7 per cent growth in 2019-20.

Despite the pandemic, the agriculture and allied activities sector has been a silver lining, being expected to grow at a record 11.7 per cent. However, industry will grow at minus 11.3 per cent and services minus per cent.

The agriculture and allied activities sector was the only positive contributor to the GSVA in 2020-21 and was least impacted in the pandemic because of timely and proactive measures taken by the Maharashtra government.

Because of the hard impact of the pandemic on trade, repair, hotels and restaurants and the transport sector, the service sector is expected to grow at minus 9 per cent in 2020-21.

Manufacturing and construction sectors were hit hard in the state and are expected to grow at minus 11.8 per cent and minus 14.6 per cent respectively, due to which the industry sector's growth is expected to be minus 11.3 per cent in 2020-21.

As per the advance estimates, the nominal (at current prices) GSDP for 2020-21 is expected to be Rs 26.61 lakh crore and the real (at constant 2011-12 prices) is expected to be Rs 19.62 lakh crore for Maharashtra.

Total funds proposed for the annual scheme 2020-21 are Rs 1,15,000cr against Rs 99,000cr in 2019-20 in Maharashtra. The share of district schemes in the annual scheme 2020-21 is Rs 14,455cr.

The revenue receipts of Maharashtra are Rs 3,47,457cr for 2020-21 (BE), as against Rs 3,09,881cr during 2019-20(RE). Actual revenue receipts during April-December 2020 were Rs 1,76,450cr (50.8 per cent of BE). Maharashtra's revenue expenditure is Rs 3,56,968cr as per 2020-21 (BE) as against Rs 3,41,324 cr during 2019-20 (RE).

Maharashtra's total revenue, comprising tax and non-tax revenues, will be Rs 1,76,450cr in 2020-21 against Rs 2,14,376 cr in 2019-20. Tax revenue will be Rs 1,27,011cr against Rs 1,66,335cr and non-tax revenue Rs 49,439 cr against Rs 48,041 cr in 2019-20.

Maharashtra's debt stock comprises accumulated unpaid loans and other liabilities and it will be Rs 5,20,717 crore as per 2020-21 (BE), which is 19.6 per cent of the GSDP well within the limit (25 per cent of the GSDP).

Maharashtra's internal debt is expected to reach Rs 4,30,140cr (82.6 per cent) of debt stock as per 2020-21 (BE), of which open market borrowings are expected to be Rs 3,53,005cr. In 2020-21 (BE), internal debt of Rs 80,609cr is expected to be raised, of which OMB will be Rs 70,000cr.

Maharashtra's fiscal deficit is estimated at 2.8 per cent for 2019-20 (RE), against India's 3.8 per cent. The percentage of fiscal deficit to GSDP in Maharashtra is 2.1 per cent and debt stock to GSDP is 19.6 per cent as per 2020-21 (BE).

The share of development expenditure in revenue exp is 68.7 per cent, as per 2020-21 (BE) in Maharashtra.

As per 2020-21 (BE), the share of capital receipts in total receipts and capital expenditure in total expenditure are 20 per cent and 17.8 per cent respectively, in Maharashtra.

Maharashtra's outstanding guarantees given at the end of 2018-19 were Rs 25,135 cr (9 per cent of total revenue). The highest outstanding guarantee of 76.1 per cent was given by the urban development department, followed by 15.7 per cent by the cooperative and marketing and textile department and 3.2 per cent by the public works department.

As per the 15th finance commission recommendations, total transfers of financial resources to Maharashtra during 2021-22 to 2025-26 will be Rs 3,37,252 crore, of which the total grants in aid will be Rs 70,375cr.

Maharashtra: Favoured investment destination

FDI inflow in Maharashtra from April 2000 to Sept 2020 was Rs 81,8,522cr, 27.2 per cent of the total FDI inflows to India. During 2020-21, up to Sept 2020, the total FDI inflow was Rs 27,143cr.

During ‘Magnetic Maharashtra 2.0’ in June, the state attracted investment proposals of Rs 1.13 lakh cr, with expected employment of over 2.50 lakh.

Since liberalisation (August 1991) up to October 2020, 20,909 industrial projects with an investment of Rs 14,29,142cr were approved in Maharashtra. Until October 2020, 247 projects, with proposed investments of Rs 37,887cr were registered.

Further, Maharashtra's share in aggregate deposits and gross credit of scheduled commercial banks as on March 31, 2020, was 20 and 27 per cent respectively, at the all-India level. The annual credit plan size for the priority sector for 2020-21 is Rs 4.75 lakh cr.

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