States play a pivotal role in overall growth and development of the Indian Economy. State Governments propel the economy by dismantling barriers in the production processes such as land, labor, capital, and entrepreneurship, and contribute massively towards infrastructure building and industrialization in their respective territories. On the socio-economic front, the States have taken effective measures for the implementation of reforms in their socio-economic and infrastructural development. In the recent years, the States are in the process of rapid industrialization with new innovations through coordinated development of Micro Small and Medium Enterprises, and large scale enterprises.
The States have been taking proactive measures to promote education, expedite the productivity of the agriculture sector, bolster the industrial sector, and boost the services sector. All States, irrespective of present growth rate are striving to reform their systems in order to make themselves desirable investment destinations for the domestic and global investors. These States are in a healthy completion in the implementation of various ease of doing business reforms designed by the central government along with their own capsules of developmental activities for upliftment of living standards of the people.
With this backdrop, a comparative analysis of the resilience of the Indian States for the Pre-Pandemic (2018-19 and 2019-20), the COVID pandemic year 2020-21, and Post-Pandemic years (2021-22 and 2022-23) has been undertaken on the basis of lead economic indicator; he Growth of Gross State Domestic Product (GSDP). The analysis found that all the States (except Meghalaya) are significantly above their GSDP growth rates of pre pandemic years (2018-19, 2019-20) and pandemic year (2020-21).
In the post pandemic years (2021-22 and 2022-23 average), numerous states have shown remarkable progress in the growth of their Gross State Domestic Product (GSDP). A total of 25 states, including Andhra Pradesh, Assam, Bihar, Delhi, Gujarat, Haryana, Jammu & Kashmir, Karnataka, Kerala, Manipur, Mizoram, Nagaland, Odisha, Rajasthan, Telangana, Uttar Pradesh, West Bengal, Chhattisgarh, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Tamil Nadu, Tripura, and Uttarakhand, have experienced a growth rate of over 7% during the post-pandemic years.
Out of these, 25 states, those grew above 7%, 17 States including Andhra Pradesh, Assam, Bihar, Delhi, Gujarat, Haryana, Jammu & Kashmir, Karnataka, Kerala, Manipur, Mizoram, Nagaland, Odisha, Rajasthan, Telangana, Uttar Pradesh, and West Bengal, have exhibited an even higher growth rate of over 9% during the same period (averaging from 2021–22 and 2022-23). These states have demonstrated an impressive performance by adopting various ground touching reforms. The analysis identifies that the economic growth and development in these States will enhance the overall growth and development of the Indian economy. The strong growth among these States is strengthening the overall growth trajectory of the Indian economy at a sustainable level.
Going ahead, as India is moving ahead toward its journey to become a developed economy by 2047, the role of the States is expected to be increasingly important in sustaining the overall growth and development of the Country to the next levels. Several challenges, such as easing the supply-side constraints, up skilling the workforce, ease of setting up and running business, reducing cost of doing business and increasing manufacturing competitiveness will go a long way to strengthen India’s growth trajectory towards a developed nation.
The Study comes out with a message that many States have adopted the best practices of leading States in their respective socio economic parameters to become more and more resilient in the coming times. The State policies are majorly focused on diversifying the beneficiaries of the socio-economic development programs to ensure all-inclusive growth in the Country. The spending undertaken by the States tends to reap a multiplier effect for the holistic development of the Indian economy. The States’ collective efforts contribute to laying the solid foundation for the overall growth in the Country.
The remarkable achievement in the higher GSDP growth trajectory can be attributed to the extensive range of reforms implemented by the state government in partnership with the central government across various socio-economic segments. These reforms have contributed to the growth of sectorial output, facilitated a more favourable business environment with reduced costs of compliances vis-à-vis removal of 40,000 tedious compliances by the central government for ease of doing business. The States are putting their best foots for improved fiscal discipline, enhanced manufacturing activity and intensified exports to position India as a leading Global Manufacturing Hub. The enhanced economic activity in the States is creating steady strides for employment creation in many growth promising segments. The adoption of the best practices by the States will further propel the Indian economy on a higher growth path with enhanced resilience and to become a “Developed Economy” by 2047.
Post Pandemic Resilience of GSDP growth of the States
| S.No. | States | Pre-Pandemic Years (2018-19 and 2019-20) average | Pandemic Year (2020-21) average | Post-Pandemic Years (2021-22 and 2022-23) average |
| 1 | Andhra Pradesh | 4.5 | -2.5 | 9.1 |
| 2 | Assam | 4.6 | 0.9 | 9.1 |
| 3 | Bihar | 7.7 | -7.4 | 9.6 |
| 4 | Chhattisgarh | 6.9 | -1.8 | 8.2 |
| 5 | Delhi | 4.0 | -6.6 | 9.2 |
| 6 | Goa | 2.0 | -2.6 | 3.5 |
| 7 | Gujarat | 7.9 | -1.9 | 13.7 |
| 8 | Haryana | 6.3 | -6.2 | 9.2 |
| 9 | Himachal Pradesh | 5.3 | -3.0 | 7.0 |
| 10 | Jammu & Kashmir | 3.5 | -1.4 | 9.6 |
| 11 | Jharkhand | 5.0 | -5.3 | 8.8 |
| 12 | Karnataka | 6.1 | -3.5 | 9.4 |
| 13 | Kerala | 4.1 | -8.5 | 11.5 |
| 14 | Madhya Pradesh | 6.9 | -4.2 | 8.8 |
| 15 | Maharashtra | 3.0 | -7.3 | 8.0 |
| 16 | Manipur | 1.2 | -5.8 | 21.2 |
| 17 | Meghalaya | 5.1 | -7.8 | 4.8 |
| 18 | Mizoram | 10.1 | -8.1 | 23.0 |
| 19 | Nagaland | 6.1 | -4.3 | 17.6 |
| 20 | Odisha | 4.9 | -2.1 | 9.2 |
| 21 | Punjab | 4.9 | -1.5 | 6.5 |
| 22 | Rajasthan | 3.8 | -2.0 | 9.8 |
| 23 | Sikkim | 5.0 | 0.3 | 6.4 |
| 24 | Tamil Nadu | 5.1 | 0.1 | 8.1 |
| 25 | Telangana | 7.3 | -6.0 | 9.9 |
| 26 | Tripura | 7.3 | -4.4 | 8.7 |
| 27 | Uttar Pradesh | 4.0 | -4.2 | 9.3 |
| 28 | Uttarakhand | 2.4 | -5.8 | 7.6 |
| 29 | West Bengal | 4.7 | -6.6 | 9.6 |
Note: Column 2 represents the average growth rate of Pre-Pandemic years (2018-19 and 2019-20).
Column 3 represents the growth rate of Pandemic Year (2020-21).
Column 4 represents the average growth rate of Post-Pandemic years (2021-22 and 2022-23).