GDP by state: Will the North and the South ever meet?

India’s economy has grown at a breathtaking pace, from a nominal GDP of Rs 87 lakh crore in FY12 to an estimated Rs 190 lakh crore in FY19. Compound annual growth rate (CAGR) of 11.74% in nominal terms and 7.05% in real terms is remarkable, making India the fastest growing major economy in the world. In 2014-19, the NDA-I government grew the economy by Rs 78 lakh crore at a CAGR of 10.88%. While the Q4FY19 recorded lower growth and the forecast for the next two quarters is also lower, India is expected to retain its status going forward. While overall growth is impressive, a detailed look shows growth has been uneven across states. GDP data published by RBI of representative states (see graphic) indicates significant variance between the northern and southern states. Southern and Western states from Tamil Nadu till Gujarat are thriving with robust CAGR and impressive per-capita GSDP. In FY18, the population-weighted average of per-capita GSDP for the south was Rs 1.93 lakh, 2.5 times that of the north at Rs 0.77 lakh. Even with improved CAGR of over 10% in Madhya Pradesh, Bihar and West Bengal, states in the north are recording low per-capita GSDP. It is clear that growth across India is variant and continues to diverge.