VIJAYAWADA: Andhra Pradesh’s economy has entered 2024-25 with renewed momentum.
According to the latest RBI Handbook of Statistics, its Gross State Value Added (GSVA) has risen to Rs 14.70 lakh crore, up from Rs 13.16 lakh crore in 2023-24, a robust 11.7% year-on-year expansion, well above the national nominal GDP growth of around 8.9%.
The medium-term trajectory is even more striking. AP’s GSVA has increased from Rs 7.25 lakh crore in 2017-18 to Rs 14.70 lakh crore in 2024-25, effectively doubling the size of the economy in eight years, a 103% expansion at current prices.
The compound annual growth rate over this period is approximately 10.7%, comfortably above the national average.
A comparison between the last full year of the previous regime (2023-24) and the first year of the current regime (2024-25) shows a clear acceleration.
Andhra Pradesh added Rs 1.54 lakh crore to its economic output in a single year, a sharper increase than previously estimated, supported by stronger performance in manufacturing, construction, industry, and financial services. Manufacturing has shown a steady improvement, even if its growth remains more moderate than in high-performing States such as Tamil Nadu and Karnataka.
The broader industry sector, comprising manufacturing, mining, electricity and construction, expanded from Rs 3.19 lakh crore to Rs 3.40 lakh crore, registering 6.4% growth at current prices. This indicates that AP’s industrial recovery is gaining firmness, supported by a stabilising manufacturing base, and improving activity across allied sectors.
Construction continues to be one of AP’s strongest growth engines. The sector’s GSVA increased from Rs 1.10 lakh crore in 2023-24 to Rs 1.21 lakh crore in 2024-25, a solid 10.2% expansion.
This mirrors the State’s sustained focus on infrastructure, housing, irrigation, and public works, areas that have historically acted as stabilisers during periods of economic uncertainty.
In financial services, AP is among the top three fastest growing States
Financial services recorded one of the sharpest jumps among all sectors, rising from Rs 41,171 crore in 2023-24 to Rs 47,038 crore in 2024-25 at constant prices, a strong 14.2% growth rate. This surge reflects deeper credit penetration, stronger NBFC activity, higher digital-payment volumes, and a revival in real estate-linked financial flows.
Over the past decade, the structural composition of AP’s economy has shifted significantly. Agriculture, while still a foundational pillar, now accounts for a smaller share of total GSVA as services and industry have expanded more rapidly. The State has not moved away from agriculture, absolute output remains higher than in 2011-12, but its relative weight has declined as labour and capital have gradually shifted toward higher-productivity sectors.
Manufacturing has grown steadily in value terms, though it is yet to achieve the breakout scale seen in States like Tamil Nadu or Gujarat. Instead, AP’s industrial trajectory reflects stability rather than dominance, with construction serving as a key bridge sector that absorbs labour from agriculture, and supports post-pandemic recovery.
Services have clearly emerged as the new backbone of AP’s economy. The sector’s share in GSVA has risen consistently, driven by trade, transport, communications, public administration, education, health, and financial services. The rapid expansion of financial services in particular signals that AP is entering a new phase of service sector deepening, with implications for employment patterns, urbanisation, and fiscal capacity. The State’s transition from a farm-heavy to a service-heavy economy is now unmistakable, with construction and industry acting as transitional engines.
In the inter-state context, AP’s 2024-25 performance compares favourably with several major States. While Tamil Nadu and Karnataka recorded stronger manufacturing and industry growth, AP’s overall economic expansion remained robust and broadly competitive.
AP has sharply reduced the economic gap with Telangana over the past three years. After reaching its narrowest point in 2023-24, the gap remains tight in 2024-25, with AP just Rs 47,000 crore behind Telangana, a level of convergence unseen in the decade after bifurcation.
Rankings further underline AP’s improving position. With a GSVA of Rs 14.70 lakh crore, AP is now the eighth largest State economy in India, positioned just behind Telangana, and ahead of Rajasthan and Kerala. In terms of growth rate, AP’s 11.7% expansion places it among the top seven fastest growing major States, outperforming Maharashtra, Gujarat, Telangana, Kerala, Punjab and Haryana.
AP ranks around seventh in manufacturing output, but rises to fifth place in construction. In financial services, AP is among the top three fastest growing States, expanding by about 14%, a pace that exceeds the growth recorded by Maharashtra and Telangana. AP’s share in India’s economy has increased from roughly 4.2% in 2017-18 to 4.7% in 2024-25, reflecting a rise in its national economic weight.
Taken together, the data points to an economy that has not only recovered from the pandemic shock but is now undergoing structural realignment.
The acceleration in 2024-25, relative to the slower expansion in 2023-24, indicates that AP is positioned for a stronger medium term trajectory. The near doubling of the economy in eight years, the narrowing gap with Telangana, and the emergence of new growth engines such as financial services give Andhra Pradesh a compelling macroeconomic narrative heading into 2025–26.
This story is reported by S Guru Srikanth of The New Indian Express
