In 2022, global uncertainties persisted due to the Russia-Ukraine conflict and higher commodity prices, impacting both advanced and emerging market economies. However, the Indian economy demonstrated a complete recovery and returned to its pre-pandemic growth trajectory by the end of FY 2022-23. Despite challenges such as rising inflation, a depreciating rupee, and a widening Current Account Deficit, India is projected to be the fastest-growing major economy with a 6.8% growth rate in FY 2022-23. The rebound in private consumption, production activity, increased capacity utilization, and widespread vaccination coverage contributed significantly to economic resilience and recovery.

In this edition, we undertake a comprehensive analysis of competitiveness analysis of the 36 sub-national economies and 5 regions of India.

• Maharashtra continues to be the most competitive sub-national economy over the last decade, but there is still room for improvement in social sectors, standard of living, and technological infrastructure.
• Tripura ranked as the bottom-most sub-national economy due to its weak performance across economic growth, fiscal balance, infrastructure, and inflation.
• The Western region, which includes Maharashtra, stands out as the most business-friendly and attracts significant investments across major industries. Its trade openness and high export turnover make it an attractive destination for foreign direct investment, although health infrastructure remains inadequate.
• The majority of the bottom-performing sub-national economies are located in the Eastern region. Despite relatively better health and educational infrastructure, the region lacks physical infrastructure, making it less attractive for both domestic and foreign companies. However, lower inflationary pressures contribute to its relatively higher economic growth.

Digital competitiveness across the country

The book also explores digital competitiveness and the evolution of digital payments across these sub-nationals the country’s digital economy is at new heights, owing to government initiatives and industry developments. However, our analysis reveals discrepancies in the growth trajectories of sub-national economies, with the Western and Southern regions outperforming the North-eastern and Eastern regions in terms of digital competitiveness. In our study of the digital payments ecosystem, we found that the value of digital transactions did not always align with a sub-national economy’s digital competitiveness, as exemplified by Bihar and Odisha. The regional Bank Sakhi programs in these areas drove remarkable growth in digital transactions, highlighting the importance of addressing deep-seated regional disparities to bridge the digital divide in the country.

By VAID, Rohanshi