Client Associates, a multi-family office managing over $7 billion in assets for more than 1,100 HNIs and ultra-HNIs, on Tuesday released its white paper titled 'State of Indian States: 2026', offering a detailed economic and governance assessment of 30 Indian states. 

The report evaluates states across nine parameters — GDP size and growth, per capita income, inflation, fiscal deficit, debt sustainability, foreign direct investment (FDI) inflows, employment, ease of doing business and sectoral composition — to create an investment-readiness ranking. 

Widening disparities in income among states

According to the report, India is expected to remain the world’s fastest-growing major economy, with GDP growth projected at 7.5% in FY26 and 6.8% in FY27. However, it also highlighted widening disparities in income, fiscal stability, employment, and economic growth among states. 

“Maharashtra’s economy is 133 times larger than Mizoram’s, while Goa’s per capita income exceeds Bihar’s by more than eight times,” the report noted. 

The study found that India’s economic activity remains highly concentrated, with Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, and Gujarat contributing nearly 48% of the country’s GDP in FY25. In contrast, the bottom 10 states accounted for less than 3%. 

Maharashtra alone contributes 13.3% to India’s GDP

Maharashtra alone contributed 13.3% to India’s GDP, reaffirming its position as the country’s financial and commercial hub. Tamil Nadu recorded the highest year-on-year growth among the top five states at 16% in FY25 while Uttar Pradesh posted a five-year CAGR of 15.3%, emerging as one of India’s fastest-transforming economies. 

Commenting on the findings, Nitin Aggarwal said India’s next phase of economic growth would increasingly be shaped at the state level. “Economic leadership in India is no longer defined only by size, but also by fiscal discipline, institutional quality, capital efficiency and the ability to attract private investment,” he said. 

The report also highlighted sharp disparities in prosperity levels across states. Sikkim, Goa, and Delhi recorded the highest per capita incomes while Bihar remained at the bottom with per capita income of ₹69,321. The national average stood at ₹2.58 lakh, with only 16 states exceeding that level. 

UP, Bihar continue to have a major share in India's poverty headcount

It added that Uttar Pradesh and Bihar, despite accounting for over 27% of India’s population, continue to have a significant share in the country’s poverty headcount. 

On foreign investment, the report said India attracted ₹4.22 lakh crore in FDI equity inflows in FY25, marking a 14.7% year-on-year rise. However, inflows remained heavily concentrated, with Maharashtra, Karnataka, Gujarat, Delhi and Tamil Nadu accounting for 83.3% of total FDI. 

Tamil Nadu and Haryana emerged as fast-growing FDI destinations, while Uttar Pradesh and Rajasthan are increasingly attracting investments due to policy reforms and infrastructure expansion, the report said. 

In the composite investment-readiness ranking, Gujarat emerged as the top-ranked state driven by strong performance in employment generation, FDI attractiveness and fiscal discipline. Karnataka, Maharashtra, Jharkhand, and Uttar Pradesh followed in the rankings.