In accordance with the data by Reserve Bank of India (RBI), Gujarat has surpassed Maharashtra to become India’s leading manufacturing hub. It’s Gross Value Addition (GVA) in manufacturing grew 15.9% annually between FY12 to FY20 to Rs 5.11 lakh crore.
- GVA indicates economic growth in supply of goods and services. It is GDP minus net product taxes.
- In terms of manufacturing, Maharashtra is followed by Tamil Nadu with a GVA of Rs 3.43 lakh crore at 3rd spot, Karnataka (4th) at Rs 2.1 lakh crore, and Uttar Pradesh-UP (5th) at Rs 1.87 lakh crore.
- India’s cumulative manufacturing GVA grew to Rs 16.9 lakh crore in FY20 stating an annual growth rate of 9.7% since FY12.
- The worst performers among states in manufacturing are Rajasthan with average annual growth rate of 3.8%, Telangana (5.5%) and Andhra Pradesh (6.9%).
How Gujarat became India’s leading manufacturing hub?
The key reason behind this is the higher investments, and reforms during the measured time period viz. opening of a single window for business clearances, simplified labour norms, and incentive-linked schemes, among others.
- Gujarat’s capital investment in gross fixed capital formation (GFCF) between FY12 and FY19 was Rs 5.85 lakh crore, while it was Rs 4.07 crore for Maharashtra.
Points to be noted:
i.Maharashtra’s annual growth rate was at 7.5% annually between FY12 to FY20 and its GVA for manufacturing was Rs 4.34 lakh crore in FY20.
ii.Though Maharashtra missed the top spot in manufacturing but it is still the leading provider of services in India, with its services GVA growing by 12.6% annually at Rs 15.1 lakh crore in FY20.
- Karnataka posted the fastest growth in services GVA at 15.1% per annum during the same period, thus achieved the second highest services GVA at Rs 9.72 lakh crore in FY20.
iii.Telangana was the second fastest growing service economy in the country, with annual services GVA growth of 14.8 per cent leading the state to leapfrog Gujarat.Tamil Nadu, UP and West Bengal were third, fourth and fifth largest service economies in FY20.
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As per the RBI’s publication of ‘Deposits with Scheduled Commercial Banks – March 2021’, Scheduled Commercial Banks (SCBs) deposits in FY21 grew by 11.9 percent year-on-year compared to 8.8% in FY20 due to high growth in the Current Account and Savings Account (CASA) deposits. The share of CASA deposits in FY21 increased to 43.7 percent in March 2021, compared to 41.7% in FY20.
Static points about Reserve Bank of India (RBI):
-It was established on the recommendation of the Hilton Young Commission.
-RBI is responsible only for printing the currency notes. Minting of coins is done by the Government of India.
-Dr. Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI.