The Paradox of Maharashtra's Prosperity
Maharashtra's booming economy is marred by significant income disparity and rural stagnation.
MaharashtraEconomyProsperityParadoxIndiaReal Estate MaharashtraAug 05, 2024
However, despite its economic prosperity, Maharashtra is plagued by significant income disparity. The per capita income of the richest district, Mumbai, is almost three-and-a-half times greater than that of Washim, the poorest district. The relatively richer districts of Mumbai, Thane, Pune, Raigad, Sindhudurg, and Kolhapur are in the western parts, while the seven poorest districts—Washim, Gadchiroli, Nandurbar, Buldhana, Hingoli, Yavatmal, and Amaravati—are all in eastern Maharashtra, a region often referred to as Vidarbha.
The state is also highly urbanized, with 45% of its population living in urban areas. However, this has led to rural stagnation, with the rural, agrarian economy continuing to lag behind. The urbanized nature of economic growth is masking the state's rural stagnation.
Rural poverty in Maharashtra is deeper than the national average, with 26% of rural households spending less than Rs. 13,122 per month, below the poverty line. The majority of the rural workforce is employed in agriculture, but farming is no longer viable as an economic activity. The average monthly earnings of an agricultural household in the state is Rs. 9,592, which is likely to fall short of the poverty line.
The employment situation in the state raises concerns, with high economic growth not translating into employment opportunities. Although Maharashtra is an industrialized state, the formal sector's growth has been fueled by the rising use of capital and enhancements in productivity, rather than the creation of new jobs.
Most of the employment in the state is in the informal sector, with 98.81 lakh individuals employed in the sector as of 2022-23. The majority of manufacturing entities in rural Maharashtra are owned by women, and 67% of those employed in rural unorganized manufacturing are women.
Strengthening these tiny units by providing them better access to infrastructure, credit lines, marketing channels, and capacity building is key to the revival of employment and reduction in poverty.
Neeraj Hatekar teaches at the School of Development, Azim Premji University, Bengaluru. The views expressed in this article are personal.
Azim Premji University was established in 2010 as a not-for-profit, private university. The university's mission is to contribute to the evolution of a just and equitable society through education.
The National Sample Survey Office (NSSO) is a wing of the Ministry of Statistics and Programme Implementation, which is responsible for conducting large-scale sample surveys in India.
Frequently Asked Questions
What is the nominal income of Maharashtra in 2023-24?
The nominal income of Maharashtra in 2023-24 is Rs. 40,44,251 crore.
What percentage of Maharashtra's GDP is contributed by banking, finance, insurance, and real-estate services?
20%
What is the per capita income of the richest district in Maharashtra?
The per capita income of the richest district, Mumbai, is almost three-and-a-half times greater than that of Washim, the poorest district.
What is the rural poverty ratio in Maharashtra?
26%
What percentage of manufacturing entities in rural Maharashtra are owned by women?
67%
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