Tamil Nadu has, for the second consecutive year, recorded a double-digit real economic growth rate of 10.83% for 2025-26.
During 2024-25, it was 11. 19%. Again, the figure for 2025-26 could be the highest for any State, even though the Union Ministry of Statistics and Programme Implementation has not yet released the data for 11 States including Uttar Pradesh, Punjab and Kerala, besides four Union Territories.
The performance on the growth rate “significantly surpasses” the national average growth rate of 7.4% (base year: 2011-12). With two consecutive years of double-digit growth, the State’s trajectory reflects “a strong policy framework, a resilient industrial base, a robust infrastructure, and a sustained commitment to inclusive and sustainable development,” says K.R. Shanmugam, former Director of the Madras School of Economics and Economic Consultant to the Government of Tamil Nadu.
Over the five-year period (2021-22 to 2025-26), the State achieved an average growth rate of 9.07% annually, marking “a substantial improvement” of 3.86 percentage points over the previous five-year average of 5.21% (2016-17 to 2020-21), and 1.89 percentage points higher than the pre-COVID average growth of 7.18% (2014-15 to 2018-19), points out Dr. Shanmugam.
As India’s second-largest State economy, Tamil Nadu saw its Gross State Domestic Product (GSDP) at current prices rising to ₹35.29 lakh crore in 2025-26 from ₹31.19 lakh crore in 2024-25. This means that “a strong growth” rate of 13.16% has been recorded, the fastest among States. It is built on consistently high nominal growth rates over the recent years: 15.91% in 2021-22, 14.47% in 2022-23, 13.34% in 2023-24 and 15.98% in 2024-25, the economic consultant observes. The nominal economic growth rate is one that includes inflation. If this aspect is left out, it is called real economic growth rate.
Asked about the three sectors in the previous year, the veteran economist replies that the secondary sector, the principal driver of the State’s economic expansion, registered nearly 15% growth rate; the services – about 8.5% and the primary sector, nearly 6%. Both the secondary and primary sectors had grown at a higher rate than the national average. What is significant about the component of agriculture this time is that there has been a “notable turnaround” from the previous two years of negative growth rate: -1.96% in 2023-24 and -1.83% in 2024-25. The component, during 2025-26, scored “a strong recovery” with close to 9% growth.
The State’s per capita income (at current prices) now stood at ₹4.08 lakh, only next to Karnataka (₹4.33 lakh), if one is to go by the available data.
