The Maharashtra government has already spelt out an ambitious vision that would double the GDP of the state to $1 trillion by 2030. This was merely proposed by a senior government official when the BJP-led Mahayuti alliance won the landslide victory of state assembly elections. The new government will assume office on December 5, 2024. Its agenda will include a plan to stimulate economic growth by strategic investments in areas like manufacturing, electric vehicles (EVs), semiconductors, and power reforms.
Besides, the per capita of the state would rise from the current level of $3,300 to $6,500. Overall, for the state, a 14 percent CAGR has been envisaged to take the GDP from $500 billion to $1 trillion. Maharashtra’s GDP would more than the present output of Singapore, Switzerland, and UAE countries and this would make Maharashtra a true leader in the world economic arena.
Kaustubh Dasve, joint secretary to Maharashtra’s Deputy Chief Minister Devendra Fadnavis, presented the vision to institutional investors during a meeting organized by Jefferies. The government plans to bring up the contribution of the manufacturing sector to the state GDP by five percentage points- it will be 21 per cent by the end of this decade. Focus will be placed on developing 16 industries where Maharashtra has an edge, besides six emerging sectors like EVs and semiconductors, to create jobs and avoid overdependence on automation.
Maharashtra’s services sector, which contributes 59% of the state’s GDP, would remain the key growth driver. In addition to attracting more GCCs to Pune, already one of the major hubs for information technology, the government will push forward with a slew of key infrastructure projects that include metro rail expansions and new airports.
The second major plank of the state’s growth strategy is power sector reforms. Maharashtra has been working to unbundled its electricity grid since 2017, and it is almost complete. Competitive industrial power tariffs will reduce the cost by Rs 2 per unit. Maharashtra also aims to expand its installed capacity for electricity generation almost fivefold-from 45 GW in the current situation to 84 GW within five years.
To fund such growth-oriented initiatives, the government will not raise taxes but rely on the poised economic growth to finance its endeavors. The state most appealing to Foreign Direct Investment (FDI) remains Maharashtra. In India, between 2019 and 2024, this state accounted for 31% of the total FDI equity inflow, totaling $78 billion.
States are to spur manufacturing, enhance infrastructure and technological industries, amongst others, to reach apparently ambitious targets of meeting a $1 trillion GDP by 2030.
