Which Is India's Fastest Growing State?

Assam emerged as the fastest-growing large state with a remarkable 17.3 per cent nominal GDP CAGR over five years.

Progress in the direction of development

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A small group of states such as Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Gujarat serve as the primary engine for the national economy, collectively accounting for about 48 per cent of India's national Gross Domestic Product (GDP).

Another set of small and mid-sized states, including Assam, Uttar Pradesh, Meghalaya, Karnataka and Manipur, have led five-year nominal GDP growth, with each compounding at a rate above 15 per cent annually, according to a study by wealth management firm Client Associates.

Key Points

Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Gujarat together contribute nearly 48 per cent of India's national GDP.
Uttar Pradesh recorded 15.3 per cent CAGR, reflecting strong economic momentum driven by reforms and infrastructure expansion.
Meghalaya, Karnataka and Manipur also posted nominal GDP growth above 15 per cent during the five-year period.

India GDP Growth Leaders

'The five-year nominal CAGR (Compound Annual Growth Rate) data present a more democratised picture than the size hierarchy, with smaller and mid-sized states featuring prominently among the fastest growers, suggesting that structural catch-up dynamics are beginning to assert themselves across a broader base of the economy,' the report said.

Assam Tops CAGR Rankings

Assam's emergence as the fastest-growing large state at 17.3 per cent CAGR reflects a combination of improved connectivity infrastructure -- particularly the acceleration of road and bridge projects under central funding -- a resurgent tea and agro-processing sector, and a state administration that has meaningfully improved its investment climate over the past five years, the report said.

Similarly, Meghalaya's 15.3 per cent growth is also impressive in percentage terms, though against a low base.

Uttar Pradesh Economic Momentum

Uttar Pradesh's 15.3 per cent CAGR is arguably the most significant data point.

'For an economy of its scale, compounding at above 15 per cent nominally represents a structural inflection, not just a cyclical bounce.

'The Yogi-era reform agenda, particularly the NIVESH MITRA single-window portal, aggressive land record digitisation, and the state's emergence as a logistics and defence manufacturing corridor, appears to be translating into measurable economic momentum,'; the report said.

Karnataka Among Fastest Growers

Other states that grew higher than 15 per cent include Karnataka (15.14 per cent) and Manipur (15.04 per cent).

The national average growth during the five-year period till FY25 was 14.78 per cent.

Structural Catch-Up Dynamics

'India today receives a very small percentage of the overall global capital and the headroom for growth there is immense,' Rohit Sarin, cofounder, Client Associates, said.