Northern Region continued to be the largest contributor to the GDP at 27.5 per cent in 2007-08 although the economic growth in the region has underperformed the national average, says a CII report.

Stating that northern region clocked a CAGR of 6.2 per cent against 6.5 per cent nationally, CII Northern Region, Chairman, Harpal Singh said that the underperformance had been witnessed across primary and tertiary sectors.

"One of the key reasons of underperformance in the primary sector has been slow growth rates witnessed by two of the largest agrarian states in the region - Uttar Pradesh and Punjab, which contribute 57.5 per cent to the region's primary sector," he said in a release issued in Chandigarh.

So on one hand the northern region has not been able to capitalize on its traditional stronghold -agriculture, it has also not been able to capitalize on the opportunities in the service sector as much as the other regions, added Singh.

Singh pointed out that the performance of the northern region has been reasonably good in the secondary sector, driven to a large extent by growth in the construction sector.

Construction infact is also the fastest growing sub sector for the region, CAGR of 12.6 per cent over 1999-00 to 2007-08.

The other fastest growing sub sectors for the region are transport, storage and communication; Banking & insurance, real estate, ownership of dwellings & business services, said the report.

Discussing the state economies, Singh said that Uttar Pradesh, Rajasthan and Delhi are the three largest economies in the region. Chandigarh, Uttarakhand and Haryana are the three fastest growing economies in the region.

All northern region state economies have witnessed declining contribution from the primary sector. The greatest increase in percentage contribution of the secondary sector has been in Uttarakhand, 15 per cent points. Similarly the contribution of the tertiary sector has witnessed greatest increase in Haryana, 10 per cent points, he said.