As the states of Maharashtra and Haryana prepare to go to polls on October 21, about 108 million voters get to decide who will form the next government. According to Census 2011, the two states house over 11 percent of India’s population and contributed nearly 18 percent to the country’s economic growth in 2018-19.
While Maharashtra has the largest state economy, Haryana has the third-highest per capita income across all states and Union Territories.
According to the Central Statistics Office, the Gross State Domestic Product (GSDP) of Haryana has outpaced India’s GDP growth in all but one year between FY15 and FY19. Maharashtra has done the same in the last three years.
Simply put, the Indian economy has grown at an average annual rate of 7.5 percent in the last five years, while Maharashtra and Haryana have grown at 7.6 percent and 8.7 percent respectively. This makes it essential to assess the two economies and their performance in the past five years in the run-up to the elections.
Although intricacies of the respective economies will hardly ever be a talking point during the campaign, the Opposition is expected to attack the ruling BJP and the BJP-Shiv Sena alliance in Haryana and Maharashtra respectively on jobs and the economic slowdown facing the country.
Both the states are attractive sites on the industrial front, with Haryana and Maharashtra ranked fourth and fifth respectively in a 2018 index measuring states’ investment potential, The Economic Times cited the National Council of Applied Economic Research as saying. This can be accredited to Maharashtra housing Mumbai – India’s financial hub, and 14 of Haryana’s 22 districts being part of the National Capital Region.
The two states also have major auto hubs — the Gurgaon-Manesar-Bawal belt in Haryana and Chakan near Pune in Maharashtra.
In fact, Haryana, which has plants of Maruti Suzuki and Hero MotoCorp, produces two-thirds of the country’s passenger cars and 60 percent of India’s two-wheelers. As vehicle sales declined for the 10th consecutive month in August this year, the economy of the state could be hit.
Agriculture and allied activities accounted for 17 percent of Haryana’s GSDP in 2017-18, while it contributes about 12 percent to Maharashtra’s growth.
Maharashtra Chief Minister Devendra Fadnavis is facing flak from the farmer community over crop insurance in the wake of rise in prices of vegetables, particularly onions after an erratic monsoon.
To counter this, Fadnavis is endorsing his farm-loan waiver, which was announced in June 2017, and various schemes for water conservation and irrigation. Earlier this year, he had announced that his government had disbursed Rs 24,000 crore under the loan waiver to 4.3 million farmers, with another Rs 8,000 crore yet to be spent.
On the industry front, Maharashtra has faced a series of setbacks. The state government has failed to convince Taiwanese electronics manufacturing company Foxconn to set up a unit. Besides, Rs 3 lakh crore refinery and petrochemicals complex in Ratnagiri has been held off after opposition from locals and the Shiv Sena.
In addition, Maharashtra government’s plan to hold a 9 percent stake in any new industrial project with an investment of more than Rs 500 crore has caused concern to potential investors, the Economic Times report suggested.
Former Maharashtra chief minister and Congress leader Prithviraj Chavan says the state has failed on multiple counts vis-à-vis industrial growth and has slipped in the ease of doing rankings.
Maharashtra's industrial growth has fallen to 6.9 percent in FY19 from 7.6 percent in FY18, and the ease of doing business index worsened from 10th to 13th between 2016 and 2018.
Meanwhile, Haryana’s position on the ease of doing business index has jumped from the sixth to the spot. However, experts believe that incumbent chief minister ML Khattar needs to offer companies with more incentives so that potential investors are not allured by neighbouring Punjab and Himachal Pradesh. Head of Haryana Chamber of Commerce and Industry Vishnu Goyal told the newspaper that one advantage that these two states have over Haryana is cheaper tariffs for electricity.
The Opposition has consistently used the issue of jobs as ammunition against the ruling BJP governments.
Recently, when Fadnavis claimed that a quarter of the total number of jobs created in the country in the last five years has been in Maharashtra, the Congress promptly asked his for more details on the same.
According to a survey conducted by the Centre for Monitoring Indian Economy (CMIE), Maharashtra’s unemployment rate has risen from 4.6 percent in January 2016 to 5.3 percent in August 2019. On the other hand, Haryana is one of the worst across states, with rate of unemployment doubling to a staggering 28.7 percent in the same period.
Political Analyst Yogendra Yadav, whose party Swaraj India is contesting assembly polls in Haryana told the newspaper that government’s figures on unemployment are “fraudulent”. He said that contrary to the govt’s claims of around 6 lakh people unemployed in the state, the CMIE’s report has pegged the figure to be three times as many.
Haryana’s public debt, as a percentage of GSDP, has increased from 16 percent in FY15 to 23.4 percent in FY19. On the other hand, Maharashtra’s debt has trimmed from 16.5 percent to 15.6 percent in the same duration.
Maharashtra’s fiscal deficit has increased from 1.8 percent to 2.1 percent in this period. Meanwhile, Haryana has maintained its fiscal deficit at 2.9 percent, after a spike in FY16.
On the one hand, the outgoing BJP-Shiv Sena alliance in Maharashtra is looking forward to reaping the benefits of extending reservation to the Maratha community – education (12 percent in jobs) and government jobs (13 percent). The saffron parties have been accused by the NCP-Congress of “browbeating the Opposition” after Sharad Pawar was booked by the Enforcement Directorate (ED) in the Maharashtra Cooperative Bank (MCB) fraud case.
On the other hand, the outgoing BJP is counting on the support of non-Jat voters in Haryana, while former chief minister Bhupinder Singh Hooda is trying to regain his standing amongst the Jat community. Jats comprise a quarter of the population of Haryana, and like Marathas have been demanding reservation, which has often led o violent protests by the community.
Due to the lack of a strong contest by a fractured Opposition, political experts have given the edge to the saffron party(s).