Nagaland is poised to become a $10 billion economy by the fiscal year 2029-30, informed the recently released Nagaland Economic Survey 2024-25, implying a pathway towards a Viksit or ‘Developed’ Nagaland.
The value of the State’s economy as of February 17, 2025, based on Advance Estimates of Gross State Domestic Product (GSDP) for 2024-25, was $5.30 billion, the report added.
Based on the Reserve Bank of India (RBI) Reference Rates Statistics for February 17, which placed the US dollar at Rs 86.7721, Nagaland’s economy is currently worth Rs 45,989.21 crore.
The survey projects this figure to nearly double, reaching Rs 86,772.10 crore ($10 billion) by 2029-30.
This growth is dependent on achieving a compound annual growth rate (CAGR) of 12.55%.
However, the advance estimate (AE) of growth rate of GSDP for 2024-25 at 5.59% in constant prices, and 9.64% in current prices, indicated a challenging task ahead.
In absolute terms, the economy, in nominal or current price, was expected to grow from Rs 41,222 crore in 2023-24 (Provisional) to Rs 45,198 crore in 2024-25 (AE), it added.
In real terms, it was valued at Rs 22,766 crore (AE).
Ambitious target?
The state of the macro economy can be ascertained from the trend of GSDP typically measured annually and defined as “the monetary value of all the final goods and services produced within the boundary of an economy during a specified period.”
While the growth of GSDP estimated at constant price (currently the base year is 2011-12) is regarded as the real growth of the economy, the GSDP growth estimated at the prevailing current price is regarded as the nominal growth of the economy.
The annual growth rate (CAGR) of 12.55% projected by the Survey appears to be the current price.
However, the growth of GSDP has been in consistent at best during the last decade, casting some doubts on the projection.
For instance, as per the data given in the survey, the annual average growth rate of GSDP for the last 13 years from FY 2012-13 to 2024-25 (AE) was 11.25%, well below the targeted level.
However, during the intervening period, the economy was hugely impacted by the COVID-19 pandemic, which saw the GSDP falling to just 5.06% (current price) in 2020-21 FY.
Thus, if the average is taken from the last four years after the pandemic (2021-25), the CAGR increased slightly to 11.94%.
Incidentally, it was just 9.64% in 2024-25 (AE).
Likewise, the average annual growth rate of the GSDP in constant price was 6.29% during the last 13 years.
Given the past precedence, the 12.55% projected to achieve a $10 billion economy by 2029-30 appears to be a tad ambitious and would need sustained high growth from the current fiscal.
Meanwhile, the gap in Constant and Current Price GSDP, respectively at 5.59% and 9.64%, suggests the existence of inflation in the economy, the Survey noted.
However, the inferred inflation (about 4%) is within the targeted moderate range of inflation (between 2-6%) as per the RBI, it added.
In comparison to the previous fiscal year, the state’s economy in real terms saw a “deceleration” from 12.25% in 2023-24 to 5.59% in 2024-25, a scenario the Survey ‘modestly’ termed as ‘moderation.’
The ‘moderation’ in growth rate was attributed to deceleration in all the sectors of the economy.
Meanwhile, the tertiary sector continues to be the principal contributor to the state’s economy with 65.75%.
The primary sector and the secondary sectors are projected to contribute 23.55% and 10.68% respectively.
The Per Capita Income (PCI) of the state is estimated to grow by 11.62% from Rs 1,59,737 in 2023-24 (P) to Rs 1,78,304 in 2024-25 (AE).
Pathways to growth
Meanwhile, the survey harped on the vast economic growth potential of the State as a pathway to development.
The State’s unutilised and underutilised potential, including untapped natural resources as well as demographic dividend, can be optimally allocated for the growth and development of the state, it noted.
In order to achieve such an optimal allocation of the state’s resources and contribute towards Viksit Bharat, it stated that enhancement of infrastructure as well as creation of a growth-conducive environment are being actively pursued by the state government.
As a result, the state’s economy continues to register a positive economic growth rate, engendering an increase in the per capita as well as a notably higher economic growth rate than the national level in recent years, it added.
The state’s economy is therefore a net contributor to the national economic growth, it asserted.
The state government is taking myriad human resource development measures to harness the demographic dividend of the state for social progress and economic development.
- Morung Express