What Will Be India’s States’ GSDP In FY2

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India Ratings and Research (Ind-Ra) expects the gross state domestic product (GSDP) of all states in India to contract in FY21.
The contraction will be range in range of 1.4%-14.3%.
According to the agency’s estimate, the states that will witness a double-digit contraction in GSDP growth in FY21 are
Assam, Goa, Gujarat and Sikkim.

Using the insight gained in terms of the proportion of the state economy that was dysfunctional during the lockdown,
The agency has estimated the GSDP for various states.
Despite the nation-wide lockdown enforced on 25 March 2020,
Several economic activities defined as essentials remained operational,
While the lockdown impacted different sectors namely agriculture, industry and services differently.

Since agricultural activities were less impacted,
The states having a higher share of agriculture are expected to have suffered less compared to the one where the share of agriculture is low.
Also, some sub-sectors especially in the services such as banking and financial services, IT and IT enabled services were less impacted,
Because they were able to readjust their operations remotely owing to the high penetration of digital platform in their business operations.
The states in which the share of these services is high are expected to have suffered less during the lockdown compared to the one where share of these services is low.

The proportion of agriculture in gross value added was 6% for Haryana and 25.0% for Punjab in FY19.
Similarly, the proportion of industry and services was1% and 54.3% respectively in Haryana and 25.2% and 49.8% in Punjab.
This means the overall growth performance of Haryana is more susceptible to the performance of the industrial and services sectors.
The top five major states where impact of lockdown was the most pronounced are Karnataka, Jharkhand, Tamil Nadu, Kerala and Odisha.
The five major states where impact of lockdown was the least pronounced are Madhya Pradesh, Punjab, Bihar, Andhra Pradesh and Uttar Pradesh.

It is a function of the nominal GSDP of the state.
The states that are likely to be impacted more in FY21 are the states whose share of SOTR in the total revenue is higher.
The most vulnerable states in this respect are Maharashtra, Gujarat, Tamil Nadu, Kerala, Telangana and Haryana.
The share of SOTR in the total revenue of these states has been budgeted in the range of 57%-64% in FY21.