Slowdown in Vidarbha’s gross district domestic product

 

 

 

VIDARBHA is treated as economically backward region as compared to Western Maharashtra. In the past decade or so, it tried to catch up with developed parts of the State. However, thanks to COVID-19 and other reasons, Vidarbha’s gross district domestic product (GDDP) has suffered a slowdown in the past two years, reveals Economic Survey of Maharashtra 2021-22. Gross Domestic Product or GDP is an important indicator to measure the size and performance of economy. GDP at market prices is a measure, in monetary terms, of all the goods and services produced (without duplication) within the nation during usually one year. In case of State, the indicator is termed as Gross State Domestic Product, which helps in management of State finances and formulation of policies. If the geographical boundary is district, the indicator is termed as GDDP.

 

There are two data-sets of GDDP -- Real (indicator at constant prices considering 2011-12 as base year) and Nominal (indicator at current prices). Vidarbha region has two administrative divisions -- Nagpur and Amravati. Nagpur Division has six districts namely Nagpur, Wardha, Bhandara, Gondia, Chandrapur, and Gadchiroli. Amravati Division has five districts namely Amravati, Akola, Buldhana, Washim, and Yavatmal. As per the Economic Survey of Maharashtra 2021-22, the Real GDDP has been on the rise in case of Nagpur Division since 2011-12 till 2019-20. In case of Amravati Division also, there has been steady rise except for a fall in 2017-18. During COVID-19 pandemic, economies in the world faced multiple challenges. There was similar impact on India, Maharashtra, and Vidarbha region too. In terms of Real GDDP, Nagpur was the only district in Vidarbha region that posted the figure of Rs 1,02,936 crore in 2019-20.

 

Amravati was a distant second posting Real GDDP of Rs 34,803 crore that same financial year. Chandrapur finished third posting Real GDDP of Rs 31,460 crore. However, with the outbreak of COVID-19 towards the end of the financial year 2019-20, things changed and there was negative impact on the region’s economy. As a result, in 2020-21, the Real GDDP for Nagpur dipped to Rs 93,006 crore. Decline in Real GDDP in 2020-21 as compared to that in 2019-20 was a phenomenon for nine out of 11 districts of Vidarbha. Surprisingly, only Buldhana and Washim districts posted marginal increase in Real GDDP. Buldhana’s Real GDDP improved from Rs 21,837 crore in 2019-20 to Rs 21,965 crore in 2020-21. While that of Washim rose from Rs 10,499 crore in 2019-20 to Rs 11,009 crore in 2020-21. Though no specific reason could be attributed to this variation in case of Buldhana and Washim, some believe that agricultural output might have boosted the economic activity during COVID-19 period. Dr Kapil Chandrayan, former Expert Member, Vidarbha Development Board, told ‘The Hitavada’ that the slowdown in GDDP for Vidarbha region, as reflected in Economic Survey of Maharashtra, could be attributed to overall economic slowdown due to COVID-19 and reduction in size of District Planning Committee budgets by the State Government.

 

In case of developmentally backward region of Vidarbha, the Government must pay more heed, felt Dr Chandrayan. For, he explained, the recovery of backward regions is much slower than developed regions, after slowdown due to any crisis. This is so because of various reasons including lesser economic activity than others, problems in resource mobilisation, lack of services-driven growth. In developed regions, services-driven growth is there. In case of services-driven growth, operations can be started soon, gestation period for output is lesser, and capital requirement is relatively lesser than that in manufacturing and agriculture sectors. “It is a globally accepted phenomenon that when economy enters slowdown the Government has to increase the spending (Keynesian economics) in sectors that have a higher multiplier effect -- that is, which can quickly boost economic development. Unfortunately, the State Government does not seem to be working in the same direction,” Dr Chandrayan said. Citing an example of ‘unenthusiastic Government spending’, he said that the expenditure incurred in case of wildlife projects was negligible up to November 2021. Though manufacturing growth was said to be double-digit, it was lopsided in case of Vidarbha, he added.