At an impressive 12% year-on-year growth in gross state domestic product in 2011-12, Madhya Pradesh was among the fastest growing among major states in the country. In fact, MP?s growth rate almost double that of the all-India rate of 6.5%. However, in terms of per capita income, it is far down the ranking with R32,222 in FY11, indicating that recent high growth is yet to benefit the masses. States like Maharashtra, Gujarat and Tamil Nadu continued to boast higher per capita income at R83,471, R75,115 and R72,993, respectively, in 2010-11. Even smaller states like Kerala are fast catching up with per capita income of R83,725.
Industry-wise, Maharashtra recorded an impressive growth of 8.69% in FY11 followed by Gujarat at 8.43% and Andhra Pradesh at 8.36% even though the overall scenario remained gloomy. In agriculture, Gujarat recorded an impressive 14.18% growth in FY11 while Maharashtra clocked 12.87%. The farm output in many states have been dismal in 2011-12 due to deficient rains. Services industry grew over 13% in Tamil Nadu and Gujarat, followed by 11% in Maharashtra in FY11. However, the growth in services sector has moderated in 2011-12 including in Tamil Nadu.
On the fiscal side, states like Uttar Pradesh and West Bengal have one of the highest debt-to-GDP ratios. In fact, debt has increased by an average 60% in all the states. Eight states have debt-to-GDP ratio of more than 40%, which pose a serious problem of repayment in the future. High interest payments will curtail developmental spending in many states in the coming years. The combined outstanding liabilities of the states and centre are estimated to be around 65% of GDP, which is a serious concern for fiscal stability.