Since 1991, market forces have had a greater say in the spatial distribution of economic activity, compared to earlier days of industrial licensing and other policies that directed the location of enterprises. So, which states have gained from this change, and which have lost?
The Reserve Bank of India publishes the Handbook of Statistics on Indian States. Table 25 in the Handbook is the Per Capita Net State Domestic Product at Current Prices. I took this data and ranked every state from 1993-94 to 2021-22 by using various editions of the Handbook. The result is in Figure 1 (if you are wondering how there is data for Telangana when it did not exist before 2014, the answer to that will have to wait for another day).
Punjab, the state that feeds India, has seen the largest decline in rank since the nineties. From being no. 5 in 1993-94, it slipped to no. 8 in 2008-09 and then collapsed to no. 19 in the next ten years, by 2018-19, where it is in 2021-22.
By contrast, Gujarat has had a relatively stable experience. It was no. 8 in 1993-94, had a slight decline to no. 10 in 2009-10 and that is where it was in 2021-11. Occasionally, it has slipped to no. 12 and 13 but it has risen back again. Its per capita GSDP in 2021-22 is just 3.7% less than that of the state/UT at no. 8 (its original rank in 1993-94).
Two states stand out in their success, Karnataka and Telangana. But, it is important to note when the rise starts. Between 1993-94 and 2009-10, its rank barely changed, moving from no. 17 to no. 18. Likewise, Telangana moved from no. 18 to no. 17 over 1993-94 and 2007-08. But, since then, they have zoomed up the ranks and now stand at no. 6 and no. 5 respectively. Other states that have done well are Odisha and Tripura, who have moved up from the bottom of the charts to the middle. The recent years are seeing a lot of change in the ranks of states, both up and down. India is definitely on the move, but states are moving at different speeds.
Why this difference? A definitive answer to that is still awaited.