Nine states might just have nominal growth rates higher than the country's 10.5%

By Samrat Pradhan, Correspondent Thursday, 23 March 2023

According to an examination of budgets from 17 larger states that account for roughly 90% of the country's GDP, nine states expect growth rates higher than the 10.5% expected for the country in 2023-24. (GDP). 

The average nominal GDP growth forecast by the nine states for FY24 is 14%, significantly above the 10.5% nominal growth projected for the country in the Union budget and the 11.1% average for all 17 states considered. Numerous experts are suspicious of these growth projections, given that the country's overall growth is expected to slow from the 15.9% projected for this fiscal year in the FY24 budget.

According to data from the Ministry of Statistics and Programme Implementation, Uttar Pradesh is expected to be the best performer in the following year, with a 19.1% increase in nominal GDP, up from 6.9% growth in FY23 (MoSPI). Assam expects the economy to grow by 15% in the current fiscal year, whereas Tamil Nadu plans to grow by 14% in the coming year, comparable to what it hopes to achieve in 2022-23. Punjab anticipates a modest increase in growth in the following year, whereas Jharkhand anticipates maintaining its growth trend.

The Reserve Bank of India (RBI) forecasts 6.4% real GDP growth in FY24, after accounting for inflation. Inflation is predicted to be 5.3% in FY24, resulting in nominal growth of around 11.7%.

The predictions of the Centre are consistent with the country's compound annual growth rate of 10.6% between FY19 and FY23. Nonetheless, states with a favourable view anticipate outperforming the country as a whole and improving their own performance.

During FY20 and FY23, Uttar Pradesh's nominal GDP increased at a 6.4% annual rate, whereas Punjab grew at a 5.9% annual rate and Jharkhand grew at a 7.1% annual rate. "Some states may be able to expand faster because there may be some significant project being performed at the level," said NR Bhanumurthy, vice-chancellor of Dr. BR Ambedkar School of Economics University in Bengaluru.

Current Issue