Maharashtra, Karnataka and Gujarat to become $1 trillion economies by FY39: Report

Maharashtra, Karnataka, and Gujarat are expected to be the first states to hit the $1 trillion mark by gross state domestic product (GSDP) by FY39, according to a report by India Ratings and Research (Ind-Ra).

The report outlines estimated GSDP growth for Maharashtra, Karnataka, and Gujarat in the range of 5.5%, 8.4%, and 8.3%, respectively, which is similar to the growth during FY16-FY23.

However, Maharashtra has set an ambitious target of achieving $1 trillion by FY28, which is possible if Maharashtra’s nominal GSDP (in USD terms) grows at a compound annual growth rate (CAGR) of 18.0% during FY24-FY28.

Similarly, Gujarat and Karnataka are aiming to hit the $1 trillion mark by FY31 and FY33, respectively. To achieve this, states would have to maintain their nominal GSDP (in USD terms) CAGR at 17.4% and 13.5%, respectively, from FY24. As per Ind-Ra’s estimates, India would have eight sub-national economies which would hit the $1 trillion mark by FY47. Tamil Nadu would be next in line to hit the $1 trillion mark by FY41 if it manages to sustain its estimated GSDP growth rate at 7.2%, which is around the same rate as FY16-FY23. However, Tamil Nadu has set a formidable target of planning to achieve the same feat by FY31, for which its nominal GSDP has to grow at a CAGR of 16.6% from FY24.

Other states like Madhya Pradesh, Telangana, and Andhra Pradesh are on track to reach the $1 trillion economy mark by FY47, given that they maintain nominal GSDP growth rate (in USD terms) of 9.3%, 9.0%, and 8.3%, respectively, after FY24. Ind-Ra report highlighted that the top 5 states in FY23 were the same as those in FY14, only their rankings were shuffled. Karnataka displaced Uttar Pradesh to bag the mantle as the third-largest state economy of India. Maharashtra remained the largest, followed by Tamil Nadu. Gujarat came in at the fifth position followed by West Bengal and Rajasthan.