States Like Odisha and Assam Drive Post-Pandemic Growth Momentum in India | cliQ Latest

India’s post-pandemic economic recovery has seen remarkable contributions from key states such as Odisha, Assam, Tamil Nadu, and Karnataka. These states not only bounced back from the lows of FY20 but also maintained a robust compound annual growth rate (CAGR) of over 6% in their Gross State Domestic Product (GSDP) through FY25, according to a recent report by India Ratings. This strong growth has helped lift the national economy at a time when the country was emerging from an unprecedented slowdown triggered by the COVID-19 crisis.

Regional leaders in economic resurgence

India Ratings’ analysis reveals that 14 out of 28 states surpassed the national CAGR of 5.3% between FY20 and FY25. States like Odisha and Assam played a leading role in this resurgence, not just through service and agriculture growth, but also through notable expansions in the manufacturing sector. Odisha, in particular, increased its manufacturing share in Gross State Value Added (GSVA) to 26.7% in FY24, up from 22.8% in FY20, driven by basic metals and petroleum products. The state’s gradual diversification into other manufacturing segments added further strength to its economic base. Assam also posted a jump in its manufacturing share to 18.4% from 15.8%, fuelled by recovery in fabricated metals, chemicals, beverages, and petroleum products.

States such as Gujarat, Rajasthan, Andhra Pradesh, Uttar Pradesh, Jharkhand, and Chhattisgarh followed with GSDP growth ranging between 5% and 6%. On the other hand, larger economies like Maharashtra, Telangana, Punjab, Madhya Pradesh, and Bihar lagged behind, posting CAGRs at or below 5% during the same period.

Shifting sectoral dynamics across states

The report also highlights divergent trends across sectors. While the share of agriculture in national GVA declined, states like Uttar Pradesh and Bihar still witnessed significant growth in agricultural output. In contrast, manufacturing saw varied performance. States including Uttarakhand, Maharashtra, Uttar Pradesh, and Madhya Pradesh experienced a notable fall in their manufacturing contribution to economic activity.

Meanwhile, the services sector emerged as the key driver of growth in states like Karnataka, Telangana, Chhattisgarh, Uttarakhand, and Himachal Pradesh. These sectoral trends underline the changing structure of state-level economies and the crucial role regional policy and investment strategies play in shaping long-term national growth.

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