Amid soaring public debt, constraints in the availability of funds for carrying out capital expenditure because of mismatch between revenue and expenditure and on top of it additional burden expected due to the drought situation in over 1,200 revenue circles, the Maharashtra Economic Advisory Council headed by Tata Sons chairman N Chandrasekaran will make a presentation to the state cabinet on Friday on a roadmap to become a $1 trillion economy. MEAC, which was set up a year ago has already presented its 200 plus page report to the Chief Minister Eknath Shinde and thereafter it had made a presentation in August this year on the roadmap to the Deputy Chief Minister Ajit Pawar who holds the finance and planning departments.
Maharashtra’s economy is worth $444 billion in 2021-22 and it will become a $ 1 trillion economy with an estimated growth rate of 14% by 2027-28. MEAC has pointed out that the government will be able to achieve the target by tapping opportunities in manufacturing, services, agriculture and allied, energy, infrastructure, real estate and logistics. This can be possible by policies for ease of doing business, skill development and the development of MSMEs in the state.
The manufacturing sector is expected to have a 21% share from 16% of the total gross value added (GVA) meaning it would attain a level of $182 billion from $64 billion. MEAC has suggested the state government to focus on large anchor industries and their eco systems including auto and capital goods and downstream value chain plays such as oil and gas, chemicals, Pharma, textile and food to help attract investments, create jobs and drive economic multiplier.
MAEC has said that key enablers required to support growth of manufacturing GVA include capital investments of $200 to $250 billion needed in next 5 years, land parcels of 1 lakh to 1.20 lakh acres needed along with industrial infra and utility access, installed power generation capacity of 73 GW (from the current capacity of 45 GW), 1 lakh acres land needed for renewable power projects and integrated state infra master plan to develop infra linked to industrial clusters.
According to MEAC, financial services are expected to grow to $85-$95 billion in 2027-28 from $40 billion in 2021-22 while IT and ITeS to $75-$80 billion from $35 billion during the same period. It has suggested to promote Mumbai and adjacent corridors as a financial centre including a hub for back office, middle office operations and Fintechs and exploring an option of a satellite branch of GIFT city. Further, it has recommended to attract firms working in artificial intelligence (AI), analytics and emerging technologies with a target of becoming AI Capital. In addition, MEAC has suggested development of data centres in Tier 2 cities and IT services (testing) and BPO, low end KPO in Tier 2 cities with 50% share by 2027-28.
MEAC has projected tourism growth to $35 billion from $11 billion with a rise in tourists to 314 million from 155 million to create 1 million jobs.
Agriculture and allied sectors contribute 13% of state’s GVA at $45 billion (Rs 3.16 lakh crore in 2020-21 and it is expected to increase to $106 billion (Rs 7.4 lakh crore). However, this will be possible for the state by tackling various challenges such as irrigation, inputs, degrading soil health, lack of farmer awareness and price instability.
Further, Maharashtra can target construction GVA growth of 13% driven by $60 billion capital outlays in next five years.
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