Southern states have 30% share in India’s GDP, Bengal economy consistently declining: EAC-PM paper

Southern states of India, which did not show “exceptional” performance before 1991, have emerged as the leading economic powerhouse following the economic liberalisation. “Overall, the southern states together account for 30.6 per cent of India’s GDP in 2023-24,” a paper by the Economic Advisory Council (EAC) to the Prime Minister, released on Tuesday, stated.

“In 2023-24, Karnataka, Andhra Pradesh, Telangana, Kerala and Tamil Nadu together accounted for approximately 30 per cent of India’s GDP,” the EAC-PM paper further stated.  

Authored by EAC-PM member Sanjeev Sanyal, the paper ‘Relative Economic Performance of Indian States: 1960-61 to 2023-24’ focused on the relative performance of states in terms of their share of the national economy and their per capita GDP as per cent of the national average since 1960-61.

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Karnataka & Telangana emerged as economic powerhouses

As per the EAC-PM paper, in 1960-61, Karnataka’s share in India’s GDP was 5.4 per cent, and it remained almost the same until 1990-91.  

However, Karnataka witnessed a rapid growth after the policy shift, with its GDP share rising to 6.2 per cent by 2000-01 and reaching 8.2 per cent by 2023-24.  

“This growth has positioned Karnataka with the third-largest share of India’s GDP,” it further said.

Undivided Andhra Pradesh (Andhra Pradesh and Telangana) now accounts for 9.7 per cent, an increase of 2.1 percentage points since 1990-91 with most of the increase in share accounted for by Telangana. After bifurcation, the share of Andhra Pradesh has remained broadly flat.

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Tamil Nadu also reversed its earlier pre-1991 decline by increasing its share from 7.1 per cent in 1990-91 to 8.9 per cent in 2023-24.

Kerala’s share too had increased from 3.4 per cent in 1960-61 to a peak of 4.1 per cent in 2000-01, but has since drifted down to 3.8 per cent in 2023-24.  

“It is the only southern state that seems to be losing share,” the paper said.

West Bengal has seen consistent decline

Meanwhile, West Bengal, which held the third-largest share of India’s GDP at 10.5 per cent in 1960-61, now accounts for only 5.6 per cent in 2023-24. It has seen a consistent decline throughout this period," the paper said.

How state’s share in India’s GDP is calculated

The state’s share in India’s GDP is calculated by dividing the Gross State Domestic Product (GSDP) of the state by the sum of GSDP of all states.