Congratulating the people of Uttar Pradesh on the state’s foundation day on January 24, Prime Minister Narendra Modi said that “the state has set great examples in different fields and its progress in the last few years has drawn every one’s attention.” Echoing his sentiments, Chief Minister Yogi Adityanath asserted that the road to PM Modi’s $5-trillion economy dream passes through Uttar Pradesh.
The country’s most populous state of Uttar Pradesh was formed on January 24, 1950, incorporating the regions that came under the erstwhile United Provinces of British India. Since then, it has been lagging behind other states in most parameters of socio-economic development, earning the unpalatable acronym BIMARU (a Hindi word for chronic sickness).
Radical transformation
Things started changing when Prime Minister Modi came to power as a representative of the state in the Lok Sabha in 2014. A radical transformation followed when the Modi-led BJP formed the state Government in 2017. With the same party ruling in the state and the Centre, the double-engine government gave a tremendous boost to the economy of the state.
Law and order situation had deteriorated to an abysmal level during the last three decades of caste politics in Uttar Pradesh and politically patronised mafia warlord ruled various regions, when Yogi first took over as the Chief Minister of Uttar Pradesh in 2017.
Following Prime Minister Modi’s doctrine of zero-tolerance against crime and criminals, the state Government launched a relentless drive against mafia dons. Sending notorious mafia leaders to jails, the Government freed 68,784 encroachment sites and 76,196 illegal parking places from the clutches of these mafia and criminals.
Bottlenecks removed
Illegal rent-seeking and extortion have gone down drastically; the market is flourishing till late at night, even in small towns. It has created a new economic dynamism at the grass-root level. Removing one of the biggest bottlenecks in the growth of the state’s economic development, the Yogi Government then selected 10 sectors to push growth of the state.
Backed by the Centre’s financial support, the state Government’s initiatives have led to significant increase in investments and it has planned to provide direct and indirect employment to 25 lakh people in five years Because of multiple initiatives of the state Government, the unemployment rate of Uttar Pradesh has dropped from 18 per cent in 2016 to 2.9 pc in 2021.
UP has a population of 240 million, but the size of its economy is only $200 billion, with a per capita income of $860. With PM Modi’s full support, Chief Minister Yogi has now taken up a daunting task of turning the state into a $1- trillion economy by 2027.
An ambitious target
This is ambitious, but not unrealistic, target for a region that has one of the most fertile plains in the world and a larger number of urban-industrial towns known for specialisation in manufacturing.
Moreover, UP has already achieved one of the necessary conditions for economic growth – maintenance of law and order. Secure property rights and a safe business environment are basic requirements for any region to prosper.
The second optimistic sign is the rapid development of big infra in the state. Till the Purvanchal Expressway was built, there was not a single expressway in one of the most denselypopulated regions in the world. The state will soon have the largest network of expressways, the largest number of international airports, inland waterways, and a reinvigorated rural road network.
All this will bring down the logistic costs by enabling better connectivity, both within the state and with the main economic hub of Delhi-NCR. The soonto-be completed Eastern and Western freight corridors will provide better, and cheaper, connectivity to ports.
The state is also emerging as the hub of end-assembly products, such as mobile phones in western UP under the PLI scheme. Due to its large pool of cheap labour, UP is well poised to take advantage of the changing geopolitical situation and rising production costs in China, by emerging as the favoured destination of multinational companies.
Defence corridor
Uttar Pradesh has already made significant progress towards attracting investment after the 2018 investors’ summit. Now with a defence corridor and a renewed mandate, the state Government is determined to capitalise on the past gains.
It has a large reservoir of educated and skilled workforce that has never been properly channelled towards banking, finance, entertainment and R&D etc. The state Government now plans to leverage lower living costs by overhauling obsolete rules and regulations, and instituting stronger Intellectual property rights to attract investment by the growing tech and startup sectors.
Given its size and population, Uttar Pradesh has the potential to nurture several Ghaziabad-Noida-Jewar style urban agglomerations with better economic productivity and job opportunities. It will give the required acceleration to the economic growth rate and state GDP to attain the target of $1 trillion.
