Maharashtra Has Lion’s Share In Export & GST Base: Economic Survey

Chief Economic Advisor Arvind Subramanian.

(Photo: ANI)

The Economic Survey of India 2017-18, which was released on 29 January, showed that Maharashtra has the largest share in India’s exports and goods and service (GST) tax base, report The Indian Express.

The survey estimates the current GST base at Rs 65-70 lakh crore. Tax base here refers to the aggregate value of the financial streams on which GST can be imposed.

Of this, Maharashtra has the largest share of the tax base at 16 percent. The state’s share in tax base is perfectly correlated to its share in the Gross Share Domestic Product (GSDP), said the survey, thus contending that the biggest tax bases are also the biggest producing states.

As big industrial states, the share of Maharashtra and Gujarat in manufacturing GSDP is higher. Maharashtra’s manufacturing GSDP is 19.3 percent of the overall GSDP and Gujarat’s is 13. 8 percent.

It is true that the share of Maharashtra’s and Gujarat’s tax base under the GST is lower than their share of manufacturing. However, because these two states also have a significant presence in services, their tax base share remains in line with their share of GSDP. Overall, the data seem to suggest fairness and balance in the GST outcomes.

The Economic Survey ‘17-’18

India’s share of exports is another important takeaway from the survey.

Maharashtra had a share of 22.3 percent, followed by Gujarat (17.2 percent), Karnataka (12.7 percent), Tamil Nadu (11.5 percent) and Telangana (6.4 percent). Together, these states account for 70 percent of India’s exports. Incidentally, these are also among India’s most prosperous states with high GSDP per capita.  

“A state’s GSDP per capita is highly correlated with its export share in GSDP. The one major outlier in the chart is Kerala, but only because it is a large recipient of remittances,” said the survey.

(With inputs from Indian Express)