"Much of India that we dream of still lies ahead of us," Prime Minister Narendra Modi said at the British Parliament in November 2015.

This optimism, paired with a forward-looking vision and unwavering hope, is essential to building a strong national economy and leading towards a "Viksit Bharat".

Political stability in Maharashtra is crucial for this vision to materialise, as it significantly impacts the overall goal of a developed India.

Maharashtra: The Torchbearer Of India's Economic Future

Historically, Maharashtra has been a major force driving the economic engine of India, contributing around one-sixth of the country's gross domestic product (GDP) most years.

To achieve the vision of a "Viksit Bharat" with a $20 trillion GDP supporting 1.6 billion people, Maharashtra should aim to be an economy of $5 trillion, starting by attaining the first milestone of $1 trillion.

Now, Maharashtra is set to reach a GDP of $500 billion in this financial year. With an annual growth rate of 10 per cent, the $1 trillion mark is achievable within seven years in constant dollar terms.

The state's diversified economy reflects the strength of the broader Indian economy. Significant urban infrastructure investments, mostly initiated during chief minister Devendra Fadnavis' tenure between 2014 and 2019, can continue to be the driving force for Maharashtra’s growth.

Beyond The Uncertain Political Economy

Indian states, the key engines of the Indian economy, also need to have their own versions of this “Viksit” roadmap. India’s vibrant democracy envisages a big role for the states, which are not just the beneficiaries of a booming economy but in fact the very drivers of this growth.

Maharashtra's economic growth was stalled before Fadnavis took over as chief minister in 2014. In his tenure, the state saw a peak growth of 9.4 per cent, even as India’s national growth was around 6-7 per cent.

His tenure was pivotal in kickstarting as well as reinvigorating many large infrastructure projects that had stagnated for years. From new investments to urban mobility and from river linking to rural water conservation, many new and transformational ideas were at the table.

However, in the last few years, the state has seen political uncertainty, which in turn has destabilised the political economy, which had just started to come into its own. Political predictability will be an absolute sine qua non for the state to deliver on the economic promise it holds.

Maharashtra’s Multipronged Growth Drivers

Infrastructure Development: Several infrastructure projects initiated or patronised during chief minister Fadnavis' tenure are now coming online. These include the metro projects in Mumbai, Pune, Nagpur, and Navi Mumbai, the Mumbai-Nagpur Super Communication Expressway, and the Mumbai Trans Harbour Link. The new Mumbai airport is nearing completion as well. These projects will enhance connectivity and boost economic activity across the state.

Agriculture Reforms: Maharashtra is the birthplace of the cooperative movement, which is now the cornerstone of India’s agriculture growth strategy. During Fadnavis’ tenure, meaningful reforms were taken to provide greater market access to farmers, especially through farmer cooperatives.

Initiatives such as river linking and the Marathwada water grid were conceptualised to address regional imbalances and promote balanced development. These ideas represent structural changes that can bring long-term and assured prosperity to Maharashtra.

Maharashtra is already a powerhouse of value-added agriculture exports. However, the agrarian economy can immensely benefit from the coordination of the central and state government programmes to move away from sustenance farming to exploring new markets for the benefit of the farmers.

Industrial and Manufacturing Growth: As India focusses on manufacturing, Maharashtra has an opportunity to bring together its traditional auto and engineering expertise to align with the new-age industries. Aurangabad, Nashik, Nagpur, Pune, Mumbai, and Thane regions are all home to collections of specific industries, including some of the biggest global brands.

Establishing product-specific industrial clusters linked with major ports and economic corridors is another initiative that the Fadnavis government undertook, which will culminate with the Delhi-Mumbai Economic Corridor and the Western Dedicated Freight Corridor helping provide market access for Maharashtra’s industry.

The proposed Vadhawan port aims to enhance Maharashtra's manufacturing leadership through a port-led development strategy.

Services Sector Enhancement: When it comes to the services industry, Mumbai by itself adds a lot of heft. India’s financial services capital, home to the country’s largest entertainment industry and hub for global mobility, connectivity, and trade, is India’s urban crown jewel.

Pune is one of the biggest hubs for the Global Capability Centres, the new poster kids of India’s foreign exchange earnings. Pune is also home to many Indian unicorns, establishing its presence in the startup world.

Overcoming Despondency And Challenges

Maharashtra requires economic strategies centred on creating an investment-friendly ambiance, fostering innovation, and ensuring sustainable growth.

The state needs to design policies aimed at making regulatory frameworks more friendly to foreign investors, promoting ease of doing business by reducing bureaucratic red tape, and encouraging public-private partnerships for infrastructure development.

The good news is that much of this was already initiated by Fadnavis, overcoming political chasms, social divides, and infrastructure bottlenecks. The state needs a renewed commitment to its developmental agenda, replicating the green shoots of that tenure rapidly.

What Does The Future Hold?

The comprehensive economic potential of Maharashtra is tough to replicate for any other state.

To achieve the $1 trillion GDP milestone and eventually target $5 trillion, Maharashtra requires purposeful policy, stable and visionary governance, and effective dovetailing into various central government programmes. Achieving this blend will secure Maharashtra’s economic future, making it the first Indian state to reach $1 trillion in GDP.

But this roadmap requires political stability in the state. That politics matters was on ample display in Fadnavis’ chief ministerial tenure — the first full five-year tenure in the state since the early 1970s.

If the state is able to replicate this political and economic alignment, it will easily retain its position as the north star steering the national economic growth aspirations.

Nimish Joshi

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