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Growth rate: 7.8%

Hyderabad, the financial capital of Andhra Pradesh, is also known as the city of pearls. With an estimated population of 7 million, the city is the biggest contributor to Andhra Pradesh's gross domestic product, state tax and excise revenues.

As per 2006 statistics, the per capita income of Andhra Pradesh was at Rs 25,625 (less than Rs 200 of national average). The city, which used to be primarily a service city, is now the seat of many businesses, including trade, transport, commerce, storage, communication and lately IT.

Like Bangalore, Hyderabad too has witnessed a real estate boom in recent times, mainly because of the growth of IT and retail business in the city.

Major pharmaceutical companies like Dr Reddy's Laboratories, Matrix Laboratories, Aurobindo Pharma Limited and Vimta Labs are located here.

Hyderabad has also made considerable progress in the field of bio-technology through initiatives like Genome Valley and Nanotechnology Park.

For the advancement of infrastructure in the city, the Andhra Pradesh government is building a skyscraper business district at Manchirevula.