• D K Joshi
  • Economy Research
  • Research
  • Macroeconomy
  • Press Release
  • GDP
December 07, 2017 location Mumbai

Gujarat, MP, Haryana grew fastest in the past 5 fiscals

Punjab, UP and Kerala were the slowest

Gujarat, Madhya Pradesh and Haryana were the fastest-growing states between fiscals 2013 and 2017, while Punjab, Uttar Pradesh and Kerala were the slowest, an analysis by CRISIL shows.


In a report titled ‘States of growth’ released today, CRISIL said equitable economic development requires not missing the woods for the trees. In the context, India’s aggregated GDP and other vital statistics do not fully reveal how the states have been faring.


“There is wide divergence in the performance of states and the nuances of that gets buried in aggregated national statistics,” said Dharmakirti Joshi, Chief Economist, CRISIL. “Importantly, states today decide many policies, have the responsibility for reforms such as of land and labour laws, and are facing increasing competition. Hence it was important to assess their performance holistically by using yardsticks that reflect these seminal changes.”


States of growth therefore gauges performance using a matrix of 3 key macroeconomic parameters – growth, inflation and fiscal health. For want of data, the analysis is restricted to the pre-demonetisation period.


Interestingly, inflation in the three fastest-growing states was below the national average of 6.8%, which means there was no growth-inflation trade-off for them.


These states have also acquitted themselves well in the labour-intensive sectors such as construction, manufacturing, and trade, hotels, transport & communication services. Gujarat and Haryana feature among the top 3 growing states in terms of gross value added (GVA) of labour-intensive sectors as well as overall GDP between fiscals 2013 and 2016.


Among relatively poor states, Chhattisgarh, Jharkhand, and Orissa were the top performers in labour-intensive sectors, recording growth higher than the all-India average during this period. These states, therefore, are likely to have been more successful than others in job creation.


Rajasthan, Telangana and Tamil Nadu saw the lowest growth in employment-intensive sectors.


States which had the lowest GDP growth in this period – Kerala, Punjab, Uttar Pradesh – unsurprisingly, also saw below-average growth in GVA of their labour-intensive sectors.


Gujarat was the top performer in construction and manufacturing sector growth, while Chhattisgarh and Haryana have been among the top performers in manufacturing and trade, transportation and communication services. In Gujarat specifically, the share of manufacturing has jumped from 28.4%to 34.4% of GVA – which is close to the levels seen in China.


CRISIL’s study also shows inflation fell in most states between fiscals 2013 and 2017. And in 11 major states, it fell faster than the all-India average.


As for fiscal health, Uttar Pradesh, Punjab and Rajasthan were the most indebted, while Chhattisgarh, Karnataka and Maharashtra were the least.


Further, by juxtaposing the fiscal position of the states with their respective GSDP growth rates, we observe that states which have successfully managed high growth levels while keeping their fiscal deficits below 3% include Chhattisgarh, Gujarat, Karnataka, Maharashtra and Telangana.


On the contrary, states which have lower growth rates despite their fiscal deficits overshooting the 3% target are Kerala, Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh.


  • Media Relations

    Saman Khan
    Media Relations
    CRISIL Limited
    D: +91 22 3342 3895
    M: +91 95940 60612
    B: +91 22 3342 3000

  • Analytical Contacts

    Dharmakirti Joshi
    Chief Economist, CRISIL Ltd


    Dipti Deshpande
    Senior Economist, CRISIL Ltd