Which is the strongest economy among South Indian states? Here's how Karnataka, TN, AP, Kerala, and Telangana stack up

Karnataka, Tamil Nadu, Andhra, Kerala, and Telangana, these five southern Indian states are among the major contributors to the nation’s economic growth. These five states have over 30 per cent share of India’s GDP. Data available from the Reserve Bank of India (RBI), and economic surveys of these states shows that in FY23 Tamil Nadu, with a GSDP of Rs 24.8 lakh crore at current prices, is the biggest economy in south India, followed by Karnataka at Rs 22.4 lakh crore, Telangana at Rs 13.3 lakh crore, Andhra Pradesh at Rs 13.2 lakh crore and Kerala with Rs 10 lakh crore GSDP are the other five major economies in south India. 

Apart from the size of the economy,  we have compiled the per capita income, state debt, tax revenue, interest payment ratio, and fiscal deficit data to analyse which is the strongest state economy in the south. Here's what we know:

Per capita Income: Telangana recorded the highest per capita income of Rs 2,75,443 in FY22. While Karnataka with Rs 2,65,623 is in the second spot. it is followed by Tamil Nadu with Rs 2,41,131, Kerala with Rs 2,30,601, and lastly Andhra Pradesh with Rs 2,07,771, which has the lowest per capita income among the five major south Indian states. However, all these states have higher per capita income than the national average of Rs 1,50,007.

The debt to GSDP ratio is a major indicator for analysing the financial health of the economy where a lower debt-to-GDP ratio indicates the stronger financial condition of that state. Among the five major south Indian states, Telangana has the lowest debt to GSDP ratio of 25.3 per cent, followed by Karnataka (27.5 per cent), Tamil Nadu (27.7 per cent), Andhra Pradesh (32.8 per cent), and Kerala with (37.2 per cent) is at the bottom of this list.

State Tax Revenues: Budget Estimates (BE) of the State’s tax revenues for FY22 shows that Tamil Nadu, with the highest tax revenues of Rs 1,26,644 crore, is at the top spot, followed by Karnataka (Rs 1,11,494 crore), Telangana (Rs 92,910 crore), Andhra Pradesh (Rs 85,265 crore), and Kerala (Rs 71,833 crore). Higher tax revenues indicate that the state can spend more on improving infrastructure, health, and education.

Gross Fiscal Deficit (GFD): Lower fiscal deficit ratio indicates the economic strength of the state as the government has to borrow less money to finance the state's expenses. In fiscal discipline, Karnataka is number one. It has the lowest fiscal deficit (2.8 per cent), and it is followed by Andhra Pradesh (3.2 per cent), Tamil Nadu (3.8 per cent), Telangana (3.9 per cent). Kerala with a fiscal deficit of 4.2 per cent is at the last place.

Interest Payments to Revenue Receipts ratio: This indicator shows how much money is required for debt servicing because if Interest Payments are high then the state has lesser money to spend on developmental works. Telangana (11.3 per cent) has the lowest Interest Payments ratio in south Indian states, followed by Karnataka (14.3 per cent), Andhra Pradesh (14.3 per cent), Kerala (18.8 per cent) and at the fifth spot is Tamil Nadu with (21 per cent) of state's revenues goes for interest payments.

There is tough competition among the five south Indian states. While Telangana and Karnataka are the top performers on most economic parameters, as seen above, other states are also not far behind. All these states are growth engines for the nation’s economic progress.