The Union Ministry of Statistics and Programme Implementation recently released new statistics on India’s Gross State Domestic Products (GSDP). According to the data, 19 states and Union Territories have managed to surpass their pre-Covid economic levels. Seven of these regions even showcased double-digit growth rates during the 2021-22 fiscal year.
Data for certain states including Gujarat and Maharashtra is yet to be released for this period. In the previous year, 2020-21, the economies of these 19 states and Union Territories either contracted or showed very little growth due to the nationwide lockdown imposed in response to the Covid-19 outbreak.
GSDP Growth in 2021-22: The Key Findings
The states that bounced back from conditional contraction or negligible growth in 2020-21 include Andhra Pradesh, Rajasthan, Bihar, Telangana, Delhi, Odisha, Madhya Pradesh, Haryana, Karnataka, Tripura, Sikkim, Himachal Pradesh, Meghalaya, Jharkhand, Tamil Nadu, Jammu and Kashmir, Punjab, Uttarakhand, and Puducherry. These states and Union Territories managed to exceed their pre-Covid GSDP levels in the 2021-22 fiscal year.
Two states, Kerala and Uttar Pradesh, were the exceptions. Their GSDP remained below pre-Covid levels in 2021-22. Among those that recovered, Andhra Pradesh recorded the highest growth at 11.43%, while Puducherry saw the least growth, at just 3.31%.
Andhra Pradesh wasn’t the only region to experience double-digit growth. Rajasthan, Bihar, Telangana, Odisha, Madhya Pradesh, and Delhi also reported growth rates higher than 10%.
The Base Effect and Economic Recovery
The remarkable jump in GSDP for some states can be attributed to the base effect, but it also reflects the country’s overall economic recovery post-pandemic. In 2021-22, India’s GDP expanded by 8.7%, rebounding from a contraction of 6.6% during 2020-21.
Understanding Gross State Domestic Product: Definition and Significance
Gross State Domestic Product (GSDP), expressed in monetary terms, refers to the total volume of finished goods and services produced within a state’s geographical boundaries during a specific period, typically a year. It is a crucial indicator of a state’s economic growth.
State Domestic Product is divided into three broad sectors: Primary, Secondary and Tertiary. It is compiled according to the methodology prescribed by the National Accounts Division, National Statistical Office, Ministry of Statistics & Programme Implementation, Government of India.
Back in 2015, the National Statistical Office introduced a new series of national accounts statistics. This updated series used 2011-12 as its base year, replacing the previous series which had 2004-05 as its base.
GDP Growth in India Over the Last Decade
When it comes to understanding the Indian economy, we must consider the rate of growth of Real Gross Domestic Product (GDP) and the Gross Domestic Product at market prices. Both have seen steady increases over the past decade.
The GDP at market prices of India increased from around 900 billion USD in 2005 to 2.1 trillion USD in 2015. As of 2020, India’s GDP stands at 2.63 trillion USD. However, the rate of growth of real GDP has not seen a consistent increase over the last decade. It fluctuated due to various international and domestic economic pressures.