Southern states have outpaced their peers post-liberalisation with their share growing to around 30 percent of the country’s GDP in FY24, a study by the prime minister’s economic advisory council highlighted on September 17.

The study titled “Relative Economic Performance of Indian States: 1960-61 to 2023-24” co-authored by EAC-PM member Sanjeev Sanyal found that southern regions of the country have outperformed others both in terms of share in the economy and per capita incomes.

“Per capita income of all southern states became higher than the national average after 1991. For instance, the relative per capita income in Telangana is now 193.6 percent of the national average, while Karnataka, Tamil Nadu, and Kerala have per capita incomes 181 percent, 171 percent, and 152.5 percent of the national average, respectively,” it said.

During this period, Uttar Pradesh's (including Uttarakhand) and Bihar's (including Jharkhand) share of India's GDP has shrunk. In FY91, Bihar had a 6 percent share, which shrunk to 4.3 percent in FY24. Uttar Pradesh's share has shrunk from 12.6 percent of the country’s GDP to 9.5 percent.

The curious case of West Bengal

The study points out that maritime economies have done better than the rest of the country; West Bengal is the exception.

“West Bengal has experienced a continuous decline in its relative economic performance over several decades,” it noted.

West Bengal's share in the Indian economy has shrunk from 7.9 percent to 5.6 percent, while its per capita income relative to the national one was only a tad higher at 83.7 percent in FY24 compared with 82.4 percent in FY91 but lower than 96.9 percent in FY81.

Haryana and Punjab: A Study in contrasts

Similarly, the study found that while Haryana’s share has risen, Punjab’s has declined. Moreover, the per capita income growth in Haryana has been faster than that in Punjab.

“The divergent performance of Haryana and Punjab warrants further investigation to understand the underlying policy implications. Punjab’s relative per capita income has declined after 2000s, while Haryana, which was once behind, has surpassed Punjab on both economic indicators,” according to the study.