Formation and Economic Significance of Maharashtra

This is the one genuinely state-specific unit in the Maharashtra HSC (MSBSHSE) Std XI Economics course. Every other chapter studies economic ideas in the abstract or applied to India as a whole; here those same tools of economic analysis are turned inward, on the economy of Maharashtra itself. Because the Maharashtra HSC (MSBSHSE) Economics syllabus draws on the same economic principles as the wider Indian curriculum, a student should read this unit as "the Indian economy story, retold for one state", not as a separate subject.

How the state was formed. Maharashtra came into being on 1 May 1960, when the bilingual State of Bombay was reorganised into two states — Marathi-speaking Maharashtra and Gujarati-speaking Gujarat. It was thus created on a linguistic basis, bringing together the Marathi-speaking regions of Western Maharashtra and Konkan (from the old Bombay Presidency), Marathwada (transferred from the erstwhile Hyderabad State), and Vidarbha (transferred from the old Central Provinces and Berar under the 1953 Nagpur Agreement). This history matters economically, because the three regions joined the state with very different levels of development — the root of the regional-imbalance problem discussed later in this chapter. 1 May is still observed as Maharashtra Day.

Why Maharashtra's economy is so important. Maharashtra is the largest state economy in India and, for decades, has contributed the single largest share of the country's Gross Domestic Product (of the order of one-eighth of national GDP — the biggest of any state). It is also India's most industrialised state and its foremost destination for domestic and foreign investment, and it is home to Mumbai, the country's commercial and financial capital. In other words, Maharashtra is not just one state among many; it is a pace-setter for the whole national economy, which is exactly why a state-board student is asked to study it in its own right.

What this chapter covers. After looking at the state's administrative structure, we examine the characteristic features of its economy; its three sectors — agriculture (with the co-operative movement), industry and services; its infrastructure and human development; and finally its central policy problem, regional imbalance, and the role of the state government in tackling it. Throughout, the aim is understanding rather than the memorising of year-specific figures, which change every budget.