The economy of the State of Maharashtra is the largest in India. Maharashtra is India's most industrialised state, contributing 20% of national industrial output. Maharashtra also has software parks in many cities around the state, and is the second largest exporter of software with annual exports of over 80,000 crores.
Although highly industrialized, agriculture continues to be the main occupation in many regions of the state. 24.14% of the working age population is employed in agriculture and allied activities.
Maharashtra is divided into six divisions for administrative purposes viz. Amravati, Nagpur, Aurangabad, Konkan, Nashik, and Pune. These divisions broadly coincide with Vidarbha (Amravati & Nagpur divisions), Marathwada (Aurangabad), Western Maharashtra (Pune and Nashik divisions), Konkan (excluding Mumbai Metropolitan region), and Mumbai Metropolitan Region. The regions of Mumbai and Western Maharashtra are the most economically developed regions and account for the greatest proportion of the state's GDP.
Mumbai, the capital of Maharashtra and often described as the New York of India or Manhattan of India, is the financial capital and the most populous city of India with an estimated city proper population of 12.5 million (1.25 crore). The city is the entertainment, fashion, and commercial centre of India. Mumbai hosts the largest urban economy of any city in India. It is considered the financial capital of India with the headquarters of almost all major banks, financial institutions, insurance companies and mutual funds being based in the city. India's largest stock exchange Bombay Stock Exchange, established in 1875, is also located in the city.Lavelle, K. C. (2004). The politics of equity finance in emerging markets. Oxford University Press. Over 41% of the S&P CNX 500 conglomerates have corporate offices in Maharashtra.
Political and Economic History Political history
The British East India Company controlled Mumbai beginning in the 17th century, and used it as one of their main trading posts. The company slowly expanded areas under its rule during the 18th century. Their conquest of Maharashtra was completed in 1818 with the defeat of Peshwa Bajirao II in the Third Anglo-Maratha War.Omvedt, G. "Development of the Maharashtrian Class Structure, 1818 to 1931". Economic and Political Weekly, pp. 1417–1432.
The British governed western Maharashtra as part of the Bombay Presidency. A number of the Maratha states persisted as princely states, retaining autonomy in return for acknowledging British suzerainty. The largest princely states in the territory were Nagpur, Satara and Kolhapur; Satara was annexed to the Bombay Presidency in 1848, and Nagpur was annexed in 1853 to become Nagpur Province, later part of the Central Provinces. Berar, which had been part of the Nizam's Hyderabad State, was occupied by the British in 1853 and annexed to the Central Provinces in 1903. However, a large part called Marathwada remained part of the Nizam's Hyderabad Statee throughout the British period. The British rule of more than a century profoundly changed Maharashtra region including the economy. After Indian independence in 1947, princely states and Jagirs of the Deccan States Agency, were merged into Bombay State, which was created from the former Bombay Presidency in 1950. In 1956, the States Reorganisation Act reorganised the Indian states along linguistic lines, and Bombay Presidency State was enlarged by the addition of the predominantly Marathi-speaking regions of Marathwada (Aurangabad Division) from erstwhile Hyderabad state and Vidarbha region from the Central Provinces and Berar. The southernmost part of Bombay State was ceded to Mysore. In the 1950s, Marathi people strongly protested against bilingual Bombay state under the banner of Samyukta Maharashtra Samiti. On 1 May 1960, a separate Marathi-speaking state of Maharashtra by dividing earlier bilingual Bombay State into the new states of Maharashtra and Gujarat.
Economic history Before British rule, the Maharashtra region was divided into many revenue divisions. The medieval equivalent of a county or district was the pargana. The chief of the pargana was called Deshmukh and record keepers were called Deshpande. The lowest administrative unit was the village. Village society in Marathi areas included the Patil or the head of the village, collector of revenue, and Kulkarni, the village record-keeper. These were hereditary positions. The village also used to have twelve hereditary servants called the Balutedar. The Balutedar system was supportive of the agriculture sector. Servants under this system provided services to the farmers and the economic system of the village. The base of this system was caste. The servants were responsible for tasks specific to their castes. There were twelve kinds of servants under Bara BalutedarSugandhe, Anand, and Vinod Sen. "SCHEDULED CASTES IN MAHARASHTRA: STRUGGLE AND HURDLES IN THEIR SOCIO-ECONOMIC DEVELOPMENT." Journal of Indian Research (ISSN: 2321-4155) 3.3 (2015): 53-64. In exchange for their services, the balutedars were granted complex sets of hereditary rights (watan) to a share in the village harvest under a Barter system.Fukazawa, H., 1972. Rural Servants in the 18th Century Maharashtrian Village—Demiurgic or Jajmani System?. Hitotsubashi journal of economics, 12(2), pp.14-40. In the 1700s, the important cities of Maharashtra region were the trading port of Mumbai under the British, Pune as the de facto political and financial capital under Peshwa rule, and Bhosale ruled Nagpur. In the previous century, Aurangabad had been the most important city in the region as the seat of Mughal governors.
Under the British rule (1818-1947), different parts of the present day state were ruled under different systems of government, their economic development also reflected this difference. Although the British originally regarded India as a place for the supply of raw materials for the factories of England, by the end of the 19th-century a modern manufacturing industry was developing in the city of Mumbai.Majumdar, Sumit K. (2012), India's Late, Late Industrial Revolution: Democratizing Entrepreneurship, Cambridge: Cambridge University Press, , retrieved 7 December 2013 The main product was cotton and the bulk of the workforce in these mills was from Western Maharashtra, but more specifically from the coastal Konkan region.
The completion of The Hyderabad-Godavari Valley Railway in 1896, with a line from Hyderabad city to Manmad Junction opened the Nizam ruled Marathwada region to growth of industry. In the early twentieth century, the cotton industry held an important place in Nizam's Hyderabad Government as the largest export of Hyderabad State. In 1889, a cotton spinning mill and a weaving mill were erected in Aurangabad, employing a total of 700 people. In Jalna alone there were 9 cotton ginning factories and five cotton presses, with two more ginning factories at Aurangabad. The area of cultivated land under cotton in 1914 was three million acres (12,000 km2) in Hyderabad state, with most of the cotton being grown in the Marathwada districts, where the soil was particularly well suited to it. In 1914 69,943 people were employed in cotton spinning, sizing, and 517,750 in weaving, cotton ginning, cleaning, and pressing. The wages paid were good, but the cost of living in Marathwara rose significantly due to the rise of the cotton industry, the uncertainty of rainfall, and availability of credit from money lenders. Year Gross Domestic Product (millions of INR) 1980 ₹ 166,310 1985 ₹ 296,160 1990 ₹ 644,330 1995 ₹ 1,578,180 2000 ₹ 2,386,720 2005 ₹ 3,759,150 2011 ₹ 9,013,300 2014 ₹16,866,950 2019 ₹26,327,920 After the formation of Maharashtra, the state government established the Maharashtra Industrial Development Corporation (MIDC) in 1962 to spur growth in other areas of the state. In the decades since its formation, MIDC has acted as the primary industrial infrastructure development agency of the government of Maharashtra. Since its inception, MIDC has established at least one industrial area in every district of the state.Anand, V., 2004. Multi-party accountability for environmentally sustainable industrial development: the challenge of active citizenship. PRIA Study Report, no. 4, March 2004. The areas with biggest industrial growth were the Pune metropolitan region and areas close to Mumbai such as Thane district and Raigad district.
Maharashtra was a pioneer in the development of Agricultural Cooperative Societies after independence. In fact, it was an integral part of the then Governing Congress party's vision of 'rural development with local initiative'. A 'special' status was accorded to the sugar cooperatives and the government assumed the role of a mentor by acting as a stakeholder, guarantor and regulator. Apart from sugar, Cooperatives played a crucial role in dairy, cotton, and fertiliser industries. Support by the state government led to more than 25,000 cooperatives being set up by 1990s in Maharashtra.
In 1982, the State Government under Vasantdada Patil liberalised the Education Sector. This led to hundreds of private colleges and universities, including many religious and special-purpose institutions being set up in the state. Politicians and leaders involved in the huge cooperative movement in Maharashtra were instrumental in setting up the private institutes.
After the 1991 economic liberalization, Maharashtra began to attract foreign capital, particularly in the information technology and engineering industries. The late 1990s and first decade of the 21st century saw huge development in the Information Technology sector, and IT Parks were set up in Aundh, and Hinjawadi areas of Pune.
Sectors Energy production
Although its population makes Maharashtra one of the country's largest energy users, conservation mandates, mild weather in the largest population centres and strong environmental movements have kept its per capita energy use to one of the lowest of any Indian state. The high electricity demand of the state constitutes 13% of the total installed electricity generation capacity in India, which is mainly from fossil fuels such as coal and natural gas. There are large coal production facilities in Chandrapur district. The Vidarbha region of the state is known to have significant coal reserves. Mumbai High, the offshore oilfield off the coast of Mumbai, accounts for a significant percentage of the total crude oil production in India.Rao, R.P., and Talukdar, S.N., Petroleum Geology of Bombay High Field - India, in Giant Oil and Gas Fields of the Decade:1968-1978, Halbouty, M.T., editor, AAPG Memoir 30, 1980, Tulsa: American Association of Petroleum Geologists, , p. 504Rao, R.P., and Talukdar, S.N., Petroleum Geology of Bombay High Field, India, in Giant Oil and Gas Fields of the Decade:1968-1978, Halbouty, M.T., editor, AAPG Memoir 30, 1980, Tulsa: American Association of Petroleum Geologists, , p. 487
Nuclear and renewable sources such as hydroelectricity, wind, solar, and biomass make a smaller contribution to electricity generation capability in the state. A number of sugar mills use bagasse cogeneration to produce electricity for the mill use and surplus for the grid.Patil, D.A., From sugar production to sustainable energy production: exploring scenarios and policy implications for bioenergy in the sugar bowl of India.