Northeast India’s GDP Share: Doubling over the Course of a Decade nearly 6%

Mithilesh Kumar Sinha
Retired Professor, Nagaland University, Lumami

The Northeast region presently embodies the characteristics of contemporary India—possessing enhanced capabilities, improved connectivity, and preparedness for forthcoming challenges. The region's economic performance has undergone a substantial metamorphosis throughout the preceding ten years, with its contribution to the national GDP expanding considerably from 2.6% during 2011-12 to approximately 6% in 2024-25. This expansion demonstrates the outcomes of prolonged developmental initiatives, infrastructure modernization, and the broadening of economic sectors. This accomplishment signifies a consequential economic restructuring throughout the eight constituent states.

Assam spearheaded the expansion, with its economy growing from Rs 1.43 lakh crore in 2011–12 to approximately Rs 3.50 lakh crore in 2024–25, thereby increasing its proportion of national GDP from 1.6 percent to 4 percent. Arunachal Pradesh's Gross State Domestic Product (GSDP) increased from roughly Rs 11,000 crore in 2011–12 to around Rs 44,229 crore at current prices (and approximately Rs 22,423 crore at 2011–12 constant prices) by 2024–25, sustaining a modest yet consistent share of India's national GDP ranging from 0.1% to 0.12%. Manipur's contribution to India's overall GDP has remained relatively stable, fluctuating between 0.13% to 0.15% annually. Meghalaya's Gross State Domestic Product (GSDP) at current prices increased from Rs 19,918 crore in 2011–12 to Rs 59,626 crore in 2024–25, persistently constituting approximately 0.17% to 0.22% of India's total nominal GDP throughout this timeframe. Mizoram's nominal GSDP rose from approximately Rs 7,259 crore (Rs 7,25,869 lakh) in 2011-12 to Rs 36,031 crore (Rs 36,03,066 lakh) in 2024-25, consistently accounting for around 0.1% to 0.12% of India's total nominal GDP. Nagaland's proportion of India's nominal GDP has remained relatively constant at approximately 0.1% during the 2011–12 to 2024–25 periods. Sikkim's Gross State Domestic Product (GSDP) constitutes approximately 0.16% of India's total nominal GDP, reflecting its position as one of India's most compact economies in terms of geographic area and population. Tripura's share in India's GDP increased from 0.2% to 0.6%.

Table: % share of NE States in India's nominal GDP from 2011-12 to 2024-25

Source: MoSPI  

Multiple substantial factors have catalyzed this expansion. Government interventions have demonstrated considerable significance, with mechanisms including the Act East Policy, North East Special Infrastructure Development Scheme, and strategic financial allocations facilitating the region's capacity realization. The Centre has authorized initiatives valued at Rs 47,170 crore through development programs, with a substantial proportion already executed, demonstrating consistent investment dedication. The tertiary sector has established itself as a fundamental catalyst, presently representing more than half of the regional GDP. Expenditure pursuant to the compulsory 10% Gross Budgetary Support (GBS) allocation for the eight northeastern states increased fourfold from Rs 24,819 crore in 2014–15 to Rs 1,02,749 crore in 2023–24, aggregating Rs 5.74 lakh crore in cumulative disbursements. Substantial capital deployment in transportation infrastructure, railway networks, electrical transmission systems, and supply chain operations has mitigated longstanding geographic disadvantages according to the Institute for Competitiveness assessment framework. Expansion is progressively propelled by value-added agricultural production, regional hospitality enterprises, and enhanced service sector connectivity alongside hydrocarbon extraction (petroleum and natural gas). A demographically youthful population (comprising approximately 70% below the age of 28) has augmented the regional consumer base and workforce availability.

Enduring Obstacles 
Notwithstanding the doubling of the regional GDP share, per capita income levels across the majority of northeastern states (excluding instances such as Sikkim or certain areas of Arunachal Pradesh) remain below the national benchmark. The region continues to contend with insufficient bank credit-to-GDP ratios (below 1%), dispersed MSME expansion (representing less than 3% of total share), substantial dependence on central government budgetary allocations, and geographical constraints that precipitate infrastructure deficiencies.