Gujarat plays a key role in boosting the Indian economy

The Government of Gujarat had set up a Task Force Committee in the month of February 2022 under the Chairmanship of Dr. Hasmukh Adhia, former Union finance secretary for working out the strategy for government of Gujarat for making India a $5-trillion economy as per the vision of Prime Minister of India. The Task Force Committee has already submitted its Final Report to Gujarat Chief Minister Bhupendra Patel. India intends to achieve the GDP target of $5 trillion by 2026-27 in nominal terms. In 2021-22, India became a $3.09-trillion economy in nominal terms. Average annual nominal growth for the last 10 years (2012-13 to 2021-22) is nearly 10.5 per cent.

Therefore, if the past growth rate is sustained, India would be a $5-trillion economy by 2026-27. Let us see what the Report says. The target of a $5 trillion economy by 2026-27 is contingent on growth at the state level. Five states—Gujarat, Tamil Nadu, Maharashtra, Uttar Pradesh, and Karnataka—constitute approximately 49 percent of the nominal GDP of the country.

All five states grew at an average annual nominal growth of nearly 10 per cent or more during the pre-COVID period (2012-13 to 2019-20); they have the potential to continue to grow at a rapid pace in the coming years, if everything goes well. The contribution in the economy of big states like Bihar is also important but, unfortunately, it is not doing well in industry. There is a big scope in the packaging and food industry in Bihar but somehow this state is not focusing on this sector even though production of vegetables and other agri products is higher than in other States.

The Reserve Bank of India, major multilateral institutions, and rating agencies released their latest FY22 real GDP growth forecasts for India. As per these forecasts, GDP growth ranges from 8.3 per cent (World Bank) to 10 per cent (ADB). These exceptionally high levels of growth do partly reflect a base effect since India’s GDP had contracted by 7.3 per cent in FY21.

The FY23 growth forecasts, therefore, indicate a more normal level of growth in the narrower range of 7.5 per cent to 7.9 per cent. Taking a longer-term view, as per the October 2021 issue of IMF’s World Economic Outlook, the Indian economy is poised to become the global growth leader FY22 onwards. Not only does it overtake China amongst major economies in FY22, it is projected to retain this position for the next five years. India is a big economy in the world after the US, Russia, and China.

Gujarat plays a key role in boosting the Indian economy. PM Narendra Modi rightly says that Gujarat ka Vikas Desh ka vikas—Gujarat’s development for Nation’s development. Gujarat is a national leader in automobiles and auto-parts, pharma and medical devices, chemicals and petro-chemical, sanitary/ceramics goods, textiles, garments, apparels, etc.

Gujarat is also the world's largest petroleum hub, global leader in diamond processing (Surat), and Asia’s largest dairy (Amul). Gujarat contributions in all these sectors will help boost the Indian economy.

The country has to depend on Gujarat’s economic growth to achieve the target of a $5-trillion economy besides Maharashtra, Tamil Nadu, UP, and Karnataka. In the next financial year, the picture will be clearer whether the nation will be able to achieve this target or not.

(The writer is Joint Director, Gujarat Bhawan. The views expressed are personal)