Maharashtra to grow at 8% in FY16 despite 2.7% agri decline: Survey

State public debt estimated at Rs 3.33 lakh crore, up 10%

Maharashtra is expected to clock eight per cent growth (gross state domestic product, or GSDP) during 2015-16, compared to 5.8 per cent in 2014-15. The gross state value added (GSVA) at basic prices is estimated to grow 7.7 per cent, against 5.6 per cent during the same period.

According to the Maharashtra Economic Survey for 2015-16, tabled by State Cabinet Minister of Finance Sudhir Mungantiwar in the state legislature, the real GSDP at constant (2011-12) market prices will be Rs 16,47,045 crore, up eight per cent against 2014-15.

KEY TAKEAWAYS

• Rs 3,757 crore
  State revenue deficit (BE*)
• Rs 30,733 crore
  Fiscal deficit, down 1.6%
• Rs 2,01,988 crore
  Revenue expenditure in FY16 (BE), against Rs 1,94,677 crore in FY15 (RE**)
• Rs 1,34,081
  Per capita income in FY15, compared to Rs 1,25,146 in FY14, a rise of 7.1%
  Per capita consumption of electricity in industrial rose by 5.3%, domestic 6.1% and agriculture 20.1%, resulting in an increase of 8.3% in FY15

*BE: Budget Estimates  **RE: Revised Estimates

However, erratic rainfall with long dry spells in the monsoon season hampered the crop sector, plummeting growth of its real GSVA to minus 5.3 per cent over the previous year. Overall, the growth of real GSVA of agriculture and allied activities sector is expected to decline 2.7 per cent over the previous year, while the real GSVA of the industry sector is expected to grow 5.9 per cent; the services sector by 10.8 per cent.

Deficit monsoon and unseasonal rain had an adverse impact on the agricultural production during 2014-15. Production of foodgrains declined 24.9 per cent, cereals 18.7 per cent and pulses 47 per cent.

Further, production of cotton dipped 59.5 per cent and oilseeds 52.8 per cent. The output of fruits and vegetables also decreased 15 per cent. However, sugarcane production rose 19 per cent. The real GSVA of the crop sector is expected to decline by a record 23.4 per cent.

The growth in the real GSVA of agriculture and allied activities is expected to be minus 16 per cent in 2014-15.

Debt Position

State's public debt in 2015-16 (budget estimate) surged to Rs 3.33 lakh crore against the revised estimate of Rs 3.02 lakh crore  in 2014-15, up 10%.

However, the government has said the Rs 3.33 lakh crore pub,ic debt is 16.9% of GSDP well within the 21.9% limit laid down by the 14th Finance Commission.  The average cost of borrowing is expected to be 9.1%.

The interest payments is estimated Rs 27,663 crore  in 2015-16 against the revised estimate of Rs 24,283 crore, an increase of 13%.

Subsidies and guarantees

The government's outgo towards subsidies would be Rs 10,631 crore in 2015-16. They included Rs 4,936 crore as compensation to Maharashtra State Electricity Distribution Company for subsidised tariffs to agriculture and powerlooms, Rs 3,150 crore to industrial units including mega industrial projects, Rs 1,613 crore to Maharashtra State Road Development Corporation for compensating the losses incurred while providing concessional fares to certain categories of passengers and Rs 910 crore for distribution of foodgrains to below poverty line and certain sections of above poverty line beneficiaries.

Further, the outstanding state guarntees at the end of 2013-14 reached to Rs 7,709 crore. The highest guarantee of 34.7% was given to the cooperation, marketing and textile department followed by 16.7% to water supply and sanitation, 16.3% to public works, 13.2% to industry, energy and labour and 10% to planning department.