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MOSL: ECOSCOPE-Which states are driving or dragging India’s economic growth? Madhya Pradesh—the best, Tamil Nadu among the worst performers

ECOSCOPE: Which states are driving or dragging India’s economic growth? Madhya Pradesh—the best, Tamil Nadu among the worst performers

 

• After delivering 4-year slowest growth in FY18, we expect India's FY19 real GDP growth to pick up slightly to ~7% YoY. We believe that it would be interesting to learn about which states - on relative basis - are leading in terms of economic growth, and which states are struggling. Since limited official data is a serious challenge to conduct such analysis, we analyze the macroeconomic performances of 15 major Indian states - accounting for ~85% of India's GDP - based on 20 different parameters during the most recent 2½-year period ending September 2018.
• Our analysis confirms that Madhya Pradesh (MP), Telangana (TG) and West Bengal (WB) are the best performers. Punjab (PB), Haryana (HR), Kerala (KL) and Tamil Nadu (TN) are the worst states, in terms of macroeconomic performances.
• Although Rajasthan (RJ) and Chhattisgarh (CT) are moderate performers on the basis of the last 2½ years, these two states are among the Top 3 states (along with TG) on the basis of (limited) FY19 data.
• Overall, state-level policies and idiosyncrasies appear to be playing a more important role in determining the leaders and laggards. While agriculture-oriented states such as PB and HR are the weakest states, another farming-oriented state- MP is the best performer. Most of the heavy-weights such as Maharashtra (MH), Uttar Pradesh (UP) and Karnataka (KA) are moderate performers, explaining the modest national economic growth.