Maharashtra is India’s top-performing large State, followed by Gujarat and Karnataka, per CareEdge Ratings’ composite state ranking for 2025.

Western (Maharashtra and Gujarat) and Southern (Karnataka, Telangana and Tamil Nadu) states dominate the top five rankings.

The ranking is based on seven key pillars — economic, fiscal, infrastructure, financial development, social, governance and environment, covering 50 indicators.

Bihar (ranked 17th), Jharkhand (16th) and Madhya Pradesh (15th) bring up the bottom three rankings for large States, per the agency’s assessment.

“Maharashtra has 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,” CareEdge Ratings said in a report

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, the report said.

Goa topped the rankings in Group B (comprising 11 North-East, Hilly & Small States) with strong score for financial development, infrastructure, social, fiscal and economic pillars, followed by Uttarakhand, Sikkim, Himachal Pradesh and Assam.

Nagaland (ranked 11th), Manipur (10th) and Arunachal Pradesh (9th) bring up the bottom three rankings for large states, per the agency.

Mehul Pandya, MD & Group CEO, CareEdge Ratings, said, “To unlock the full potential of the States, a comprehensive and periodic review of their performance is of paramount importance. Our initiative to rank Indian States is an attempt to capture their long-term growth potential, 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.”

Economic Rankings

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 & 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, according to CareEdge Ratings’ analysis.

Sikkim ranked highest in group B, aided by an upbeat performance in per capita GSDP and higher share of industry and services in GVA.

Fiscal Rankings

Odisha led the fiscal rankings faring well in terms of revenue deficit, interest payments (% revenue), debt management, outstanding liabilities and guarantees. Odisha is followed by Gujarat and Maharashtra

In Group 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.

Financial Development Rankings

The agency noted that Maharashtra excelled in terms of financial development, faring well in credit disbursements by banks and NBFCs, penetration of mutual funds and health insurance. It was followed by Telangana and Haryana.

The Southern States like Telangana and Tamil Nadu performed positively in terms of bank credit disbursements and SHG (Self-Help Group) loans. Haryana occupied the third spot supported by better outcomes for NBFC credit, balance in PMJDY (PM Jan Dhan Yojana) account, penetration of life insurance and mutual funds.

In Category B, Goa is in the leading position with a large margin vis-à-vis other States driven by higher scores across most indicators.

Infrastructure Rankings

Northern States of Punjab and Haryana occupy the top ranks for infrastructure on account of better scores in per capita power availability, railway density and net irrigated area (% net sown area). Goa led the Group B States faring well in per capita power availability, road and railway density, air passenger traffic and doctor availability.

Social Rankings

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, the agency said.

Goa and Mizoram were the front runners in Group B, with positive outcomes for infant mortality and multidimensional poverty rate. Goa also fared well in gross enrollment, while Mizoram scored better in literacy and had lower unemployment levels.

Governance Rankings

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 follows aided by positive outcomes for completion of court trials and public e-service delivery.

Regionally, the southern States perform strongly on the governance pillar, securing four of the top six positions, CareEdge Ratings said.

In Category B, Uttarakhand and Himachal Pradesh topped the rankings owing to better performance in business environment, completion of court trials, strength of judges and public e-service delivery.

Environment Rankings

Southern States such as Karnataka, Telangana, Andhra Pradesh and Tamil Nadu stood out in the environment category. Karnataka led with encouraging scores for air quality and renewable energy. Telangana performed well in terms of change in forest cover and potable water. Himachal Pradesh excelled in renewable energy, potable water and change in forest cover leading the States in Category B.

Rajani Sinha, Chief Economist, CareEdge Ratings said this is a quantitative assessment of States’ potential in terms of sustainable and equitable growth and is also a reflection of investment attractiveness of these States.

Published on April 29, 2025