Telangana frontrunner on multiple economic indicators

Telangana has emerged a frontrunner on multiple economic indicators among South Indian States during the financial year of 2022-23

Hyderabad: Telangana has emerged a frontrunner on multiple economic indicators among South Indian States during the financial year of 2022-23, firmly establishing itself among key drivers of India’s overall progress.

Alongside Karnataka and the three other southern States, the country’s youngest State has solidified its position as a major contributor to the nation’s economic growth, with these States collectively accounting for over 30 percent of India’s GDP.

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As per data available from the Reserve Bank of India and economic surveys of the five southern States, Telangana was on top in three of the five key parameters which determine the financial health of a State’s economy.

To assess the overall strength of these economies, the analysis of factors such as per capita income, state debt, tax revenue, interest payment ratio, and fiscal deficit point that Telangana is in top position in three of five parameters.

Per capita income

Telangana has the highest per capita income of Rs.2,75,443 in the financial year 2021-22, followed by Karnataka with Rs.2,65,623. Tamil Nadu stands at Rs.2,41,131, Kerala at Rs.2,30,601 and Andhra Pradesh at Rs.2,07,771, which has the lowest per capita income among these five States.

In 2022-23, Telangana recorded a per capita income of Rs.3.17 lakh, which is the highest in the country. All the southern States surpass the national average of Rs.1,50,007.

Debt-to-GSDP ratio

Another significant indicator is the debt-to-GSDP ratio, which gauges the financial health of an economy. Telangana maintains the lowest debt-to-GSDP ratio at 25.3 percent, indicating the stronger financial condition of the State, followed by Karnataka (27.5 percent), Tamil Nadu (27.7 percent), Andhra Pradesh (32.8 percent), and Kerala (37.2 percent).

Revenue for interest payments

Further, the interest payments to revenue receipts ratio reveals the proportion of funds allocated to debt servicing. Telangana exhibits the lowest ratio at 11.3 percent among the southern States, followed by Karnataka (14.3 percent), Andhra Pradesh (14.3 percent), Kerala (18.8 percent) and Tamil Nadu, with 21 percent of its revenues allocated for interest payments, securing the fifth position.

On the other hand, Tamil Nadu leads as the largest economy in southern India, with a Gross State Domestic Product (GSDP) of Rs.24.8 lakh crore at current prices in the fiscal year 2023. Karnataka follows closely with Rs.22.4 lakh crore, while Telangana records Rs.13.3 lakh crore, Andhra Pradesh with Rs.13.2 lakh crore and Kerala with Rs.10 lakh crore in GSDP.

In terms of State-owned Tax Revenues (SOTR), Tamil Nadu emerges the leader with estimated revenues of Rs.1,26,644 crore for FY22, followed by Karnataka (Rs.1,11,494 crore), Telangana (Rs.92,910 crore), Andhra Pradesh (Rs.85,265 crore), and Kerala (Rs.71,833 crore).

In 2022-23, Tamil Nadu’s SOTR had hit Rs.1.46 lakh crore against Telangana which scored SOTR of Rs.1.26 lakh crore. Higher tax revenues signify the ability of a State to invest in infrastructure, healthcare and education.

Karnataka leads in fiscal discipline with the lowest deficit ratio of 2.8 per cent, trailed by Andhra Pradesh (3.2 per cent), Tamil Nadu (3.8 per cent), and Telangana (3.9 per cent). Kerala, with a fiscal deficit of 4.2 per cent, ranks last.