Guwahati-Shillong, May 20: Assam and Meghalaya have emerged as two of India’s fastest-growing state economies over the last five years, highlighting a changing economic landscape where growth is increasingly extending beyond the country’s traditional industrial powerhouses, according to a report released on May 19.
The study observed that while major states such as Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Gujarat continue to dominate India’s economic output — together accounting for nearly 48 per cent of the nation’s Gross Domestic Product (GDP) — several smaller and mid-sized states are now recording some of the strongest growth rates in the country.
Among large states, Assam recorded the highest nominal GDP growth during the five-year period, registering a compound annual growth rate (CAGR) of 17.3 per cent. The report linked the state’s performance to improvements in connectivity infrastructure, particularly the expansion of road and bridge networks supported through central assistance. Growth in sectors such as tea and agro-processing, along with a more favourable investment climate, was also identified as a contributing factor.
Meghalaya also stood out in the findings, registering a nominal GDP CAGR of 15.3 per cent over the same period. While the report noted that the state’s economic expansion began from a relatively smaller base, it said the pace of growth remained notable in percentage terms.
According to the study, five-year nominal CAGR data presents a more broad-based picture of economic development compared to traditional GDP rankings, suggesting that structural catch-up growth is now becoming visible across a wider range of states.
Uttar Pradesh also posted a 15.3 per cent CAGR, a figure the report described as significant given the size of its economy. The study attributed the state’s growth momentum to measures including the NIVESH MITRA single-window clearance system, digitisation of land records and expansion in logistics and defence manufacturing infrastructure.
Karnataka and Manipur also recorded nominal GDP growth rates exceeding 15 per cent during the five-year period, at 15.14 per cent and 15.04 per cent respectively. In comparison, the national average nominal GDP growth up to FY25 stood at 14.78 per cent.
Rohit Sarin, co-founder of Client Associates, stated that India currently captures only a limited share of global capital flows and continues to have significant potential for economic expansion in the years ahead.
