Tuesday, 29 November 2022

Gujarat take over Maharashtra to become the largest manufacturing hub in-country

Gujarat take over Maharashtra to become the largest manufacturing hub in-country

Gujarat has pipped Maharashtra to emerge as the largest manufacturing hub in the country, with the former's GVA in manufacturing growing 15.9 percent annually on average between FY12 and FY20 to touch the mark Rs 5.11 lakh crore, according to the data released by the Reserve Bank of India (RBI).

During the period, Maharashtra's annual growth rate was 7.5 percent per annum, bringing the state's total manufacturing GVA to Rs 4.34 lac crore in FY20. It continues to lead as the countries biggest services hub.

The worst performer among states, which were already among the top 10 manufacturing ones during the period, were Andhra Pradesh, Telangana, and Rajasthan, with average annual growth rates of 6.9 percent, 5.5 percent, and 3.8 percent, respectively.

GVA is essentially GDP minus net product tax and reflects growth in the supply of goods and services.

 Gujarat take over Maharashtra to become the largest manufacturing hub in country 1unsplash image

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The other states with the highest manufacture GVA are Tamil Nadu at Rs 3.43 lac crore, Karnataka at Rs 2.1 lac crore, and Uttar Pradesh at Rs 1.87 lac crore. India's manufacture GVA grew to Rs 16.9 lac crore in FY20 at an average growth rate of 9.7 percent since FY12.

Higher investment in Gujarat during a period likely played a crucial role in allowing the state to outpace the country's manufacturing growth. Gujarat shows the highest level of capital investment in terms of gross fixed capital formation (GFCF), a measure of assets between FY12 and FY19 at a total of Rs 5.85 lakh crore, ahead of Maharashtra, which saw an investment of Rs 4.07 lac crore during the span, and Andhra Pradesh, which witnessed growing GFCF of Rs 1.49 lac crore.

A report by KPMG said key improvements by Gujarat, including the introduction of an easing of labor norms, single-window for business clearances, as well as smoother administration of schemes like incentive, contributed to boosting ease of working business in the state and making it one of most attractive destinations for FDI.

Maharashtra, however, retained the spot as the leading provider of services in the country, with the state's services GVA growing at 12.6 percent per annum, hitting Rs 15.1 lac crore in FY20.

Karnataka announces the fastest growth in services GVA at 15.1 percent per annum during the period, achieving the second-highest benefits GVA in the country at Rs 9.72 lakh crore in FY20.

Telangana was the second-fastest-growing service economy in the country, with annual services GVA growth of 14.8 percent leading the state to leapfrog Gujarat and Kerala to become the seventh-largest services economy.

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