Historically, Maharashtra has led India’s economic growth with the largest share of the country’s GDP for decades. However, recent data published in working paper titled ‘Relative Economic Performance of Indian States: 1960-61 to 2023-24’ by Sanjeev Sanyal Aakanksha Arora and published by Economic Advisory Committee to the PM highlights a dramatic rise in Gujarat’s economic stature, culminating in a per capita income of 160.7 per cent of the national average in 2023-24, surpassing Maharashtra’s 150 per cent.
The Rise of Gujarat
From 2000-01 to 2023-24, Gujarat’s share of India’s GDP steadily grew from 6.4 per cent to 8.1 per cent. In fact, Gujarat’s per capita income growth story is remarkable. Initially trailing behind Maharashtra in the 1960s, with a relative per capita income of 118.3 per cent compared to Maharashtra’s 133.7 per cent, Gujarat’s economy began to accelerate in the early 2000s.
By 2010-11, Gujarat had outpaced Maharashtra, and the gap has continued to widen ever since. This significant leap has resulted in a shift in the economic balance, making Gujarat one of the most prosperous states in India. In 2020-21 and 2023-24 Gujarat left Maharashtra far behind in the race of per capita income. Interestingly, the last ten years BJP’s Devendra Fadnavis was Maharashtra Chief Minister for five years from 2014 -2019, Shiv Sena’s Uddhav Thackeray from 2019 to 2022 and BJP supported Shiv Sena’s ( Shinde faction) Eknath Shinde from 2022 to till date.
Maharashtra’s Economic Challenge
Despite Maharashtra’s historical dominance in contributing to the nation’s GDP, the state has seen its economic momentum slow down in recent years. While it continues to have the highest share of India’s GDP, its per capita income growth has not kept pace with Gujarat’s rapid rise.
From the 1960s to the early 2000s, Maharashtra’s relative per capita income maintained a commanding lead, but that trajectory has shifted. The state’s growth has plateaued, and its relative per capita income now stands at 150 percent of the national average, significantly lagging behind Gujarat.
Political Turmoil
Gujarat and Maharashtra were part of the same Bombay state until 1960. While Maharashtra has been able to maintain its share in India’s growing economy, Gujarat’s share was broadly flat until 2000-01 before it took off.
Opposition parties, including Congress, Shiv Sena (Uddhav Thackeray), and the Nationalist Congress Party (NCP) led by Sharad Pawar, have accused Prime Minister Narendra Modi and the BJP government of attempting to shift India’s economic capital from Mumbai to Ahmedabad by relocating major businesses and industries to Gujarat.
Recently former Union minister Sharad Pawar on Tuesday claimed that the Final Assembly Line (FAL) of Tata Advanced Systems and Airbus in Gujarat was to be set up in Maharashtra, but was shifted at the behest of Prime Minister Narendra Modi. Also, Foxconn was taken away from Maharashtra, he said. The BJP has denied these allegations, asserting that Maharashtra continues to be the leading destination for industrial investments and business opportunities.