Mumbai, Mar 18: Rubix Data Sciences has released its latest report, “State of the States; Assessing State-level Performance: Driving India’s Economic Transition,” revealing that 10 states account for nearly 70% of India’s total economic output, underscoring the concentration of growth across key regions.
The decadal analysis, covering FY15 to FY25, evaluates state performance across multiple indicators including GDP contribution, per capita income, capital expenditure, exports, credit flows, social sector spending, and tourism.
South Emerges as Leading Growth Engine
According to the report, India’s southern region leads national GDP contribution with a 31% share in FY25, marginally ahead of the northern region at 30%. Key southern states—Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh—collectively increased their share of national GDP from 25% in FY15 to 27% in FY25.
These states also recorded strong growth:
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Karnataka: 7.8% average real growth
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Telangana: 7.1%
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Andhra Pradesh: 6.9%
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Tamil Nadu: 6.8%
Maharashtra Remains Top Contributor; Gujarat Leads Growth
While Maharashtra continues as India’s largest contributor to GDP, its share moderated from 15% in FY15 to 13% in FY25. Meanwhile, Gujarat emerged as one of the fastest-growing major economies, posting a 7.9% average growth rate.
Investment and Credit Remain Concentrated
The report highlights that capital expenditure remains concentrated:
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Uttar Pradesh, Maharashtra, and Gujarat together account for nearly 30% of India’s capex
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The top 10 states contribute ~67% of total capex
Industrial credit is similarly concentrated, with the West and North accounting for 34% each, capturing two-thirds of total industrial credit.
Exports Driven by West and South
India’s goods exports remain dominated by a few states:
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Gujarat, Maharashtra, and Tamil Nadu together contribute ~61% of total exports
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The West holds ~48% share, while the South has increased from ~26% to ~33%, reflecting growing manufacturing strength
Per Capita Prosperity Led by Southern States
Southern states also lead in per capita income:
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Telangana: ₹3.88 lakh
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Karnataka: ₹3.81 lakh
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Tamil Nadu: ₹3.62 lakh
These figures surpass larger states like Maharashtra and Haryana, indicating that growth in the South is translating into higher individual prosperity.
Shifting Investment Trends
India’s investment landscape is gradually evolving:
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Fixed capital remains concentrated in the West (33%)
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However, new investments are diversifying toward Tamil Nadu, Odisha, and Uttar Pradesh
Karnataka and Telangana have demonstrated high capital efficiency, with capital-to-invested ratios exceeding 100%.
Northeast Leads in Social Sector Spending
The Northeast region recorded the highest social sector spending as a share of GDP, rising to ~16.4% in FY25. States like Manipur and Arunachal Pradesh led with significant allocations toward education, healthcare, and welfare.
Tourism Growth Highlights Regional Trends
India recorded:
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20.9 million foreign tourist arrivals
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2.9 billion domestic visits in 2024
The North led tourism, with Uttar Pradesh emerging as the top domestic destination (22% share), driven by events like the Ram Temple inauguration and the Maha Kumbh Mela.
BIMARU States Show Strong Transformation
Traditionally lagging states—Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh—have demonstrated notable progress:
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GSDP nearly tripled in Bihar and Madhya Pradesh
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Per capita income rose ~2.5 times across all four states
These states are increasingly becoming significant contributors to India’s economic landscape.
Leadership Perspective
Commenting on the findings, Mohan Ramaswamy said:
“India’s growth story is fundamentally a state-level story. While growth is broadening beyond traditional anchors, concentration risks remain. The ability of emerging states to convert investment momentum into sustainable industrial capacity will define the next phase of India’s growth.”
Conclusion: Need for Balanced Growth
The report emphasizes that while leading states such as Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Telangana continue to anchor India’s economy, long-term resilience will depend on broader regional participation.
A more balanced distribution of investment, credit, and industrial growth will be crucial in shaping India’s next phase of economic development.
