Assam and Meghalaya have emerged among the fastest-growing state economies in India over the past five years, according to a report released on May 19, highlighting a changing pattern in the country’s economic growth beyond the traditionally dominant industrial states.
The study said major states such as Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Gujarat continue to remain the main contributors to India’s economy, together accounting for nearly 48 per cent of the country’s Gross Domestic Product (GDP). However, the report noted that several smaller and mid-sized states are now recording some of the strongest growth rates in the country.
Among the states studied, Assam recorded the highest nominal GDP growth among large states with a five-year compound annual growth rate (CAGR) of 17.3 per cent. The report linked Assam’s growth to improvements in connectivity infrastructure, including the expansion of roads and bridges with support from central government funding. It also pointed to growth in the tea industry, agro-processing sector and a more favourable investment environment in the state.
Meghalaya also featured prominently in the study, registering a five-year nominal GDP CAGR of 15.3 per cent. The report said that although Meghalaya’s economy started from a relatively smaller base, the pace of expansion remained notable in percentage terms.
According to the study, the five-year nominal CAGR figures present a more “democratised” picture of India’s economy compared to traditional GDP rankings. It observed that structural catch-up growth is increasingly visible across different regions of the country.
Besides Assam and Meghalaya, Uttar Pradesh recorded a 15.3 per cent CAGR during the same period. The report described the growth as significant considering the size of the state’s economy. It credited reforms such as the NIVESH MITRA single-window clearance portal, digitisation of land records and expansion of logistics and defence manufacturing infrastructure for helping drive economic activity.
The report further noted that Karnataka and Manipur also recorded nominal GDP growth above 15 per cent during the five-year period, at 15.14 per cent and 15.04 per cent respectively. The national average nominal GDP growth until FY25 stood at 14.78 per cent.