CHENNAI: The State recorded a 39% rise in Gross State Domestic Product (GSDP) between FY2020 and FY2025, emerging as one of the fastest-growing major state economies in the country, according to the Reserve Bank of India's Handbook of Statistics on Indian States 2024–25.
The RBI's updated State domestic product series, released in December 2025, shows that only Assam recorded a higher five-year expansion rate of 45 per cent.
Tamil Nadu's 39 per cent growth placed it ahead of Karnataka (36 per cent), Uttar Pradesh (35 per cent), Rajasthan (34 per cent), Bihar and Andhra Pradesh (33 per cent each), Chhattisgarh and Jharkhand (31 per cent each), and Telangana (30 per cent).
The RBI's updated State domestic product series, released in December 2025, shows that only Assam recorded a higher five-year expansion rate of 45 per cent.
Tamil Nadu's 39 per cent growth placed it ahead of Karnataka (36 per cent), Uttar Pradesh (35 per cent), Rajasthan (34 per cent), Bihar and Andhra Pradesh (33 per cent each), Chhattisgarh and Jharkhand (31 per cent each), and Telangana (30 per cent).
The expansion reflects broad-based contributions rather than sector-specific spikes.
Sector-wise Gross State Value Added data compiled by the RBI indicate that manufacturing is a key driver. Tamil Nadu continues to register substantial value addition from factory-based production, supported by diversified industrial clusters.
The handbook's industry indicators also show consistent levels of invested capital, fixed capital and gross value added in the factory sector over recent years, signalling sustained industrial activity.
The services sector has remained another major contributor. The RBI's value-added figures reflect steady growth in financial services, trade, real estate, transport and other services, reinforcing the state's strong urban and commercial base.
Infrastructure indicators support this trajectory. The handbook records steady increases in installed power capacity and electricity availability across years, ensuring a reliable supply for industrial and commercial demand. Road length, renewable power capacity and related infrastructure metrics show continued expansion, aligning with the needs of a production-oriented economy.
Banking data compiled by the RBI place Tamil Nadu among the leading states in terms of deposits mobilised and credit deployed by scheduled commercial banks, reflecting financial depth and economic activity.
On the fiscal front, the handbook's state-level indicators show sustained capital expenditure alongside revenue spending, suggesting continued public investment in infrastructure and social sectors.
Per capita Net State Domestic Product data further indicate that Tamil Nadu remains among the higher-income states, suggesting relatively strong income levels alongside aggregate expansion.
While Assam's 45 per cent rise marks the highest percentage growth over the five-year period, Tamil Nadu's 39 per cent increase stands out given the scale of its economy.
The data underscore the State's diversified economic structure, combining industrial output, services expansion, infrastructure support and financial depth.
The RBI handbook positions state-level economic performance as central to understanding India's growth trajectory, with Tamil Nadu continuing to feature prominently among the country's principal growth centres.