Key Points

Maharashtra topped in financial development and performed strongly across the economic, fiscal and social pillars while Gujarat’s performance is supported by its leading economic rank along with favourable outcomes in the fiscal and infrastructure pillars, according to the CareEdge Ratings' 'State Ranking 2025' report.

As per the report, western and southern states dominate the top five rankings. Fiscal, economic and financial development pillars are the strong points for western states, while the southern states performed well across the economic, financial development, environment and governance pillars. Goa topped the rankings in Group B (north-east, hilly and small states) with strong score for financial development, infrastructure, social, fiscal and economic pillars.

"The initiative to rank Indian states is an attempt to capture the long-term growth potential of states, while also focusing on the quality and inclusiveness of the growth model. This will facilitate informed decision-making and fine-tuning existing policies to suit the diversity in Indian states," said Mehul Pandya, CareEdge CEO.

The report presented a comprehensive assessment based on seven key pillars – Economic, Fiscal, Infrastructure, Financial Development, Social, Governance and Environment.

Gujarat topped the economic pillar aided by a strong performance in per capita Gross State Domestic Product (GSDP), Foreign Direct Investment (FDI) as a percentage of GSDP, and Gross Fixed Capital Formation (GFCF) for industries.

Karnataka and Maharashtra followed with higher share of industry and services in GVA and an encouraging performance in FDI. Overall, western and southern states dominated the economic rankings with a healthy per capita GSDP, higher share of industry and services and strong FDI. Sikkim ranked highest in Category B, aided by an upbeat performance in per capita GSDP and higher share of industry and services in GVA, the report stated.

Odisha led the fiscal rankings faring well in terms of revenue deficit, interest payments, debt management, outstanding liabilities and guarantees. Odisha was followed by Gujarat and Maharashtra. Gujarat’s performance was supported by a better score in fiscal deficit, government’s capital outlay, outstanding liabilities and guarantees.

In Category B, Uttarakhand performed well due to better outcomes in fiscal deficit, own tax revenues, outstanding liabilities and guarantees as well as a relatively better spending by the government on health and education, according to the report.

Maharashtra excelled in terms of financial development faring well in credit disbursements by banks and NBFCs, penetration of mutual funds and health insurance. Maharashtra was followed by Telangana and Haryana. Southern states like Telangana and Tamil Nadu performed positively in terms of bank credit disbursements and SHG loans.

Haryana occupied the third spot supported by better outcomes for NBFC credit, balance in PMJDY account, penetration of life insurance and mutual funds. In Category B, Goa’s is in leading position with a large margin vis-à-vis other states driven by higher scores across most indicators.

Punjab and Haryana occupied top ranks for infrastructure on account of better scores in per capita power availability, railway density and net irrigated area (net sown area). In terms of social infrastructure, both Punjab and Haryana fared well in the pupil-teacher ratio but lagged in the availability of doctors. Goa led the Group B states faring well in per capita power availability, road and railway density, air passenger traffic and doctor availability, the report stated.

Kerala stood out in the social assessment, driven by strong scores across most indicators.

Similarly, Tamil Nadu also demonstrated a healthy performance across most indicators. However, Kerala lagged on the unemployment front.

Andhra Pradesh topped the assessment of governance pillar supported by better scores on business environment, court conviction rate, completion of court trials and strength of judges. Madhya Pradesh followed, aided by positive outcomes for completion of court trials, and public e-service delivery.

- IANS