Gujarat tops India’s growth chart; doubles GSDP in decade

On the GSDP (Gross State Domestic Product) front, Gujarat has taken the pole position among the major states of the country, increasing its GSDP 2.2x in a decade, closely followed by Karnataka, SBI Research’s latest ‘State of the Economy’ report shows.

Following these two states, in terms of GSDP, are Assam, Andhra Pradesh, Odisha, Telangana, Sikkim and Madhya Pradesh.

With dissipating regional biases, shows the SBI’s Economic Research Department report, Gujarat's Net State Domestic Product (NSDP) has also increased 2.2x, followed by Karnataka, Assan, Andhra Pradesh, Telangana, MP, Odisha, Haryana, and Tamil Nadu.

The data was revealed after comparing the ratio of per capita real income of a state vis-a-vis India during FY23 and FY12.

Among the major states, Gujarat's per capita NSDP (FY22 and FY12) has increased the most, by 1.9x, followed by Karnataka, Andhra Pradesh, Telangana and Assam.

State-wide inequality, in terms of per capita NSDP, which was on an upward trend, has shown a decreasing trend after COVID-19, says the report.

It has reversed the course and has come down in recent years from the highs attained during FY19/20. “Per capita, NSDP inequality has decreased from 0.523 in FY19 to 0.48 in FY22,” the report adds.

For the research, states were trifurcated into three categories -- states showing an acceleration in per capita real income or PCI as compared to India during FY23 over FY12, states showing stability in PCI as compared to India during FY23 over FY12, and states showing a deceleration in PCI as compared to India during FY23 and FY12.

The data also revealed that the average real GDP growth for all of India is at 8.1% as compared to 5.7% pre-pandemic growth. "This indicates India accumulated 235 bps in real growth during post-pandemic."

Of this, Maharashtra contributed to the most (56 bps), followed by UP (40 bps). Per capita NSDP inequality has decreased from 0.523 in FY19 to 0.48 in FY22.

The data shows that 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, and states are also growing in unison. "This will ensure balanced regional growth across India in future."

“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, and vanquishing inequality,” writes Soumya Kanti Ghosh Group Chief Economic Adviser, SBI.

The data related to the state-wise GSDP and per capita income data was analysed through the last decade, capturing the underlying macro changes across major states.