A glimpse into rising competitive federalism that benefits the bottom line with incremental per capita income, vanquishing inequality
Dr. Soumya Kanti Ghosh,
Group Chief Economic Adviser,
State Bank of India
Mumbai, March 27, 2024: The Special Research Report from the Economic Department of State Bank of India titled – “State” of the state of economy: The shifting sands of GSDP pre- and post-pandemic offer a glimpse into rising competitive federalism that benefits the bottom line with incremental per capita income, vanquishing inequality.
Real Per Capita Income
Real per capita income as x times of India’s per capita shows accelerating per capita income in real terms for Gujarat, Karnataka & Telangana in first 3 places....
We have compared the ratio of per capita real income of a State vis-à-vis India during FY23 and FY12
❑ We have trifurcated major states in these categories: • States that are showing acceleration in PCI during these two periods as compared to India and in this category, Gujarat is at top followed by Karnataka and Telangana
• Some of the states exhibited stability in PCI (notable ones are MP, UP etc.)
• The most disturbing case is for the states where PCI decelerated (vis-à-vis India) in FY23 as compared to FY12
❑ Spearman’s Rank Correlation Coefficient shows a correlation of 0.88, which means the ranks are in strong agreement States. States are showing change between 0.04 to -0.04 States showing acceleration in PCI as compared to India during FY23 over FY12 5
States weighted contribution in real GDP shows Maharashtra & Uttar Pradesh contributing the most post pandemic
The average real GDP growth for all-India is at 8.1% as compared to 5.7% growth pre-pandemic. This indicate that India accumulated 235 bps in real growth during post-pandemic
❑ Of this, Maharashtra contributed to the most (56 bps) followed by Uttar Pradesh (40 bps)
Gap Between Better Off And Laggard States
Remarkably the gap between better off and laggard states in terms of growth differentials has narrowed down significantly since 2014. As India is growing, the states are also growing in unison.
Remarkably the gap between better off and states once considered laggard in terms of growth differentials has narrowed down significantly after FY2015..as India is growing, the states are also growing in unison.. this will ensure balanced regional growth across India in future…
Gap between highest & lowest growth has stabilized averaging 1.8% since FY19, indicating all are growing with India.
GSDP Has Nearly Doubled In States
❑ Among the major States, Gujarat is the leader in increasing it’s GSDP
❑ Gujarat GSDP has increased 2.2x in a decade, followed by Karnataka, Assam, Andhra Pradesh, Odisha, Telangana, Sikkim, and Madhya Pradesh
Per Capita NSDP Has Nearly Doubled In A Decade
❑ Among the major States, Gujarat per capita NSDP has increased the most, by 1.9x, followed by Karnataka, Andhra Pradesh, Telangana, and Assam
Inequality is clearly declining across Indian states post pandemic
❑ State-wide Inequality, in terms of per capita NSDP was on upwards trend, however, After Covid, the same is on the decreasing trend ❑ Per Capita NSDP Inequality has decreased from 0.523 in FY19 to 0.480 in FY22
(This research work is a study by Economic Research Department, State Bank of India. Special thanks to Anurag Chandra and Ashish Kumar for a painstaking data and summary analysis. Thanks also to Sumit Jain and Emil Augustine, for their support.)
