Datanomics: 65 years on, Gujarat leads Maharashtra in key economic metrics

The shift is most stark in manufacturing - historically a core strength of Maharashtra

May 1, 2025, marks 65 years since the bifurcation of the primarily bilingual Bombay State, which led to the creation of Maharashtra and Gujarat. 

While the division was primarily linguistic, with Marathi and Gujarati speakers forming majorities in their respective new states, it was also politically charged. 

One of the fiercest debates centred around Mumbai —  the megapolis formerly known as Bombay. Though there were proposals to either assign the city to Gujarat or convert it into a Union Territory, these were firmly rejected by leaders from Maharashtra. Eventually, Mumbai was retained in Maharashtra, reinforcing its centrality to the state’s identity and economy. 

This decision shaped the economic contours of the newly formed state. Despite accounting for less than three per cent of the state’s population, it contributes nearly 19-20 per cent of the state’s total economic output. 

In 1960-61, Maharashtra had a slight edge over Gujarat in per capita income. This advantage widened steadily, peaking in the early 2000s. However, in 2017-18, Gujarat overtook Maharashtra in per capita income, registering ₹1,76,961 compared to Maharashtra’s ₹1,72,663. 

The shift is starkest in manufacturing, historically, a core strength of Maharashtra. In 2012-13, Maharashtra’s gross state value added from manufacturing was ₹2.82 trillion, higher than Gujarat’s ₹2.07 trillion. But by 2022-23, Gujarat surged ahead to” ₹6.74 trillion, while Maharashtra’s figure  lagged at ₹4.93 trillion. More revealing is manufacturing’s share of the state’s GSDP. 

Gujarat has maintained a high and consistent share, of around 30–32 per cent, indicating a stable and expanding industrial base. 

Maharashtra, in contrast, has witnessed a steady decline, from 19.32 per cent in 2012-13 to just 13.52 per cent in 2022-23. 

Notably, 2017-18 was also the year Gujarat overtook Maharashtra in manufacturing output — a turning point that coincides with Gujarat pulling ahead in per capita income rankings as well.