New Delhi: India’s economic growth story over the past five years is no longer dominated only by traditional industrial heavyweights. Latest data collated from the Reserve Bank of India shows Assam emerging as the fastest-growing major state economy, with its gross state domestic product expanding by about 45% between FY20 and FY25, well above the national average of around 29%.

The performance marks a significant shift in the country’s growth geography. Once seen largely as an agrarian and resource-driven economy, Assam has benefited from sustained public investment in roads, railways and logistics, higher oil and gas output, and better connectivity with the rest of India, helping it pull ahead of much larger states.

Tamil Nadu ranked second, clocking close to 39% growth over five years, driven by its strong manufacturing base in automobiles, electronics and textiles, along with a resilient services sector.

Karnataka followed with around 36% growth, underpinned by its dominance in IT, startups and high-value services.
Among the big northern states, Uttar Pradesh posted roughly 35% growth, reflecting rising industrial activity, infrastructure spending and the strength of its domestic market.

Rajasthan was close behind at about 34%, aided by mining, renewable energy and tourism. Bihar and Andhra Pradesh both recorded around 33% growth, despite very different economic structures, while Chhattisgarh and Jharkhand grew by about 31% each, supported by mining, power and steel. 

Telangana completed the top ten with around 30% growth, led by IT, pharma and urban services.

Economists say the data underlines a broader trend of growth becoming more geographically balanced, with states in the Northeast and the Hindi heartland narrowing the gap with long-established economic leaders. 

The challenge ahead, they add, will be sustaining momentum through jobs, skill development and private investment, as states compete to remain growth engines of the national economy.

BI Bureau