South Indian States Crucial For India’s $5 Trillion Economy Goal

Amitabh Kant Highlights the Role of Southern States in India’s Economic Growth

India has set an ambitious target of becoming a $5 trillion economy by the financial year 2027-28. To turn this vision into a reality, the Union government has devised a series of measures, recognising the vital role that states must play in achieving this goal. However, not all states will contribute equally to this endeavor. According to a recent report by EY, five states, namely Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, and Karnataka, will play a crucial role in attaining the $5 trillion target, together accounting for a combined Gross State Domestic Product (GSDP) of $2.6 trillion by financial year 2028.

The significance of these five states implies that the remaining states will have a comparatively less substantial role in realising the $5 trillion economy goal. However, there is another set of states, including West Bengal, Rajasthan, Andhra Pradesh, Telangana, Madhya Pradesh, and Kerala, which will also make substantial contributions toward the achievement of the $5 trillion dream.

Role of Southern States in India’s Economic Growth:

During a session on the role of southern states in ‘Make in India’ at the India Today Conclave South 2023, Amitabh Kant, India’s G20 Sherpa and former CEO of Niti Aayog, highlighted the important role that South–Indian states, particularly Tamil Nadu and Karnataka, will play in the country’s endeavor to become a $5 trillion economy.

Kant stated that both Tamil Nadu and Karnataka are expected to become $1 trillion economies within the next two years, emphasising that a significant portion of India’s growth toward a $5 trillion and eventually a $10 trillion economy will be driven by the southern states. He further emphasised that these states must be the key drivers at the forefront of India’s growth.

Kant explained that South India currently contributes approximately 30 percent of the country’s GDP, and the per capita income in southern states is significantly higher compared to other regions. He lauded the accomplishments of several states in the southern part of the country, citing Tamil Nadu, Telangana, Karnataka, and Kerala as prime examples.

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Tamil Nadu, he noted, has excelled in the manufacturing sector, boasting a highly skilled workforce in cutting-edge industries. Telangana has made remarkable progress in the pharmaceutical sector, with nearly 35-40 percent of India’s pharmaceutical products originating from the state. Kant also praised Kerala for its remarkable achievements in travel and tourism, creating a unique brand for itself. Karnataka, on the other hand, has served as a services hub for India for over two decades, driving the country’s services economy.

Additionally, Kant highlighted the promising potential of Andhra Pradesh, which has made significant strides in manufacturing and pharmaceuticals. The state is now poised for rapid growth in the renewable and green energy sectors.

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Kant commended these states for their outstanding work in human development and their high-quality social indicators in health, education, and nutrition. He acknowledged their consistency in policy on social development, resulting in remarkable progress across these states, even with changes in government.

The southern states of India, particularly Tamil Nadu, Karnataka, Telangana, and Kerala, are set to play a crucial role in driving India’s journey towards a $5 trillion economy. Their contributions in various sectors such as manufacturing, pharmaceuticals, services, travel, and tourism have positioned them as key drivers of India’s growth. Their accomplishments in human development and social indicators further demonstrate their exceptional performance and consistent efforts in realising their potential.

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