Industrial growth story in Maharashtra, Haryana: Fall of 12% vs 3.3% rise

Maharashtra’s share of invested capital in the industrial sector  has declined over the last few years, even as Haryana gained. Maharashtra remains the larger of the two by far, but recent trends are a study in contrasts. 

Maharashtra had a 14.4 per cent share of India’s invested capital in 2013-14 (FY14). This fell to 12 per cent in FY18. Haryana saw a gain from 3.3 per cent to four per cent in the same period. This has also resulted in the latter attracting more jobs. Its share of persons engaged rose from 4.5 per cent to 5.5 per cent, even as Maharashtra saw a decline from 13.9 per cent to 12.9 per cent. 

The analysis is based on data from the Annual Survey of Industries. The trend is similar for other key indicators like the share of factories and output. 

Comparing the growth in employment-intensive sectors with overall GSDP (Gross State Domestic Product) growth, we find the growth in most states was not employment generating. But only Gujarat and Haryana-recorded faster growth than the national average in employment-intensive sectors, said a January 2019 States of Growth 2.0 note on state economies from rating agency Crisil written by a team, including chief economist Dharmakirti Joshi.

Meanwhile, Maharashtra has increasing focused on services to drive its growth. 

The Maharashtra’s services sector is estimated to grow at 9.2 per cent (highest among all the other sectors), higher than the 7.5 per cent growth registered in the  services sector at the national level. The industrial sector of the state is estimated to grow at 6.9 per cent in FY19 in line with the national average, said the June 2019 Economic Survey of Maharashtra: 2018-19 from Care Ratings.

However, the slowdown in the auto sector, which is a large employer in Haryana, hasn t helped. And in fact, a shift away from services could have played in Maharashtra’s favour amongst a sharp slowdown in the industrial sector. Private sector body, the Centre for Monitoring Indian Economy’s (CMIE’s) September 2019 numbers suggest a 20.3 per cent unemployment rate for Haryana against 5.7 per cent for Maharashtra.