BJP-ruled states claim the largest slice of bank-funded development pie: Study
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Amid opposition claims that the Union government is focusing only on BJP-ruled states in development matters, a report by RBI economists reveals that more than half of the bank-funded projects were concentrated in four out of the top five BJP-ruled states in the country during the fiscal year 2023-24.
According to a study conducted by economists from the Reserve Bank of India (RBI), the states of Gujarat, Maharashtra, Karnataka, Andhra Pradesh, and Uttar Pradesh accounted for nearly 55% of the total project costs sanctioned during the year, amounting to approximately Rs 3,90,978 crores.
The study, which examined the cost of projects financed by banks and financial institutions, revealed significant growth in bank-financed projects across 22 states. Among these, eight BJP-ruled states saw a substantial increase, with the highest jump recorded in Chhattisgarh at 225% and the lowest in Madhya Pradesh at 60%.
Notably, some of these states are scheduled to hold elections in 2024, and they also witnessed significant increases in project financing.
The report highlighted that 54% of the allocated funds were planned to be invested by the end of FY 2023-24, with 30% set for FY 2024-25, and the remaining 16% for subsequent years. Gujarat led the states with 154 projects sanctioned in 2023, a notable rise from 82 in the previous year, making up 14.7% of the total project sanctions, or roughly Rs 57,473 crores.
This surge allowed Gujarat to overtake Uttar Pradesh, which had previously held the top spot. Despite an increase in the number of projects in Uttar Pradesh, its share of total projects decreased from 16.2% in the previous year to 7.6% in 2023-24.
Maharashtra experienced a 94% increase in project sanctions, with 93 projects allocated in 2023, up from 48 in 2022. Karnataka, which was governed by the BJP until May 2023, saw its project numbers rise from 37 in 2022 to 61 in 2023. Andhra Pradesh, which conducted state elections in June 2024 and is now ruled by the BJP ally Telugu Desam Party, also witnessed an increase in bank-funded projects, with 51 projects sanctioned in 2023 compared to 27 the previous year.
Other BJP-ruled states that recorded significant increases in bank-financed projects include Chhattisgarh, Rajasthan, Haryana, and Madhya Pradesh. States with elections scheduled for 2024, such as Punjab and Jammu and Kashmir, also saw growth in project numbers.
Meanwhile, Odisha, which held state elections in 2024, saw a decline in its share of total projects, slipping to the sixth position. The RBI report indicated that the infrastructure sector, particularly roads, bridges, and power, continued to dominate capital investments, driven by the government’s focus on infrastructure development.