Neil Banerjee
In the grand tapestry of India’s economic resurgence, Uttar Pradesh (UP) emerges as a key player. As the state takes bold strides towards becoming the face of the new India, it is essential to know about the multifaceted aspects that position UP as a potential economic giant, surpassing even countries like Norway. From its booming tourism sector to substantial growth in innovation and infrastructure, UP’s journey is nothing short of a transformational saga.
The population and GDP surge in UP: Investments, innovation, and infrastructure
With its vast expanse and historical significance, UP rivals the demographic and economic might of Brazil and Norway. The state’s impressive 10 per cent share in India’s Gross Value Added (GVA) and a burgeoning service sector are laying the groundwork for an economic ascent. As India targets a $5 trillion economy by FY28, UP is poised to become the second-largest contributor to the nation’s GDP, surpassing even Norway.
UP’s economic landscape is marked by a robust export growth rate, a surge in capital market participation, and a notable increase in the tax base. The state’s strategic focus on Ease of Doing Business, innovations, and infrastructural development has fuelled its rise. From a remarkable two-fold increase in power generation capacity to a stellar performance in the credit and deposits domain, UP is shaping up as an economic powerhouse.
Pamarty Venkataramana, an International corporate jurist and advisor to various state governments, applauds UP’s unprecedented growth trajectory. With its strategic location, abundant natural resources, and proactive policies, UP is poised to become a global economic powerhouse.
Amid this economic metamorphosis, UP’s commitment to inclusive growth becomes evident in its multifaceted approach to development.
UP boasts a commendable record in controlling crimes against women and exhibits a high conviction rate. The state’s efforts in curbing youth unemployment and improving female labour force participation reflect a commitment to inclusive growth. With the highest share in Pradhan Mantri Jan Dhan Yojana (PMJDY) and Pradhan Mantri Mudra Yojana (PMMY) accounts, UP has successfully embraced financial inclusion.
Boost in state tourism
The completion of the Ram Mandir in Ayodhya has sparked a tourism boom, with UP positioning itself as a spiritual hub. The confluence of the central government’s PRASHAD scheme and state-led initiatives has not only enhanced spiritual tourism but also holds the promise of a substantial economic windfall. With an estimated 32 crore tourists in 2022 and the Ram Mandir’s completion, UP’s tourism revenue is projected to cross the Rs 4 lakh crore mark, leading to an additional tax revenue of Rs 20,000-25,000 crores in FY25.
Venkataramana notes that the construction of the Ram Mandir heralds a new era of economic prosperity for UP. “The transformative impact is poised to resonate across sectors, injecting a surge of economic activity and generating revenue streams across various industries,” he says.
Future prospects
The growth differentials between states have remarkably narrowed since 2014, reflecting a harmonious economic progression across the nation. As UP propels itself towards economic greatness, it stands as a testament to India’s collective growth, bridging the gap between the better-off and the lagging states.
As UP positions itself as a major player in the ambitious Delhi Mumbai Industrial Corridor (DMIC), the state stands at the crossroads of significant economic development. The corridor, spanning Delhi NCR to Maharashtra, could make UP a pivotal gateway, benefitting from the reorchestrated value/supply chain. With key nodes at Greater Noida and the Multi-Modal Logistics Hub, UP is set to play a crucial role in India’s industrial territories.
“The state’s emphasis on infrastructure development, particularly in the sectors of transportation, energy, and digital connectivity, has laid a robust foundation for sustained economic expansion. Investments in road networks, airports, and ports have not only facilitated smoother movement of goods and people but have also attracted significant domestic and foreign investments, fuelling job creation and fostering entrepreneurial endeavours,” Venkataramana contends.
The economic symphony unfolds
The data behind the growth of UP further underscores its rising significance. From an increase in financial markets to infrastructure investments, UP’s progress seems bullish in all terms.
Export dynamics and financial markets:
The state’s remarkable 7.2 per cent growth in exports, outpacing the national average, signifies a burgeoning economic landscape. Uttar Pradesh’s appeal to investors is evident in the surge of over 4 times in investors from FY20 to FY24, reflecting a notable shift in financial market preferences. With a share in excess of 10 per cent on both NSE and BSE, UP is becoming a magnet for financial activities, underlining its increasing influence in the economic domain.
Tax landscape and innovation:
UP’s leadership in increasing its tax base, as indicated by the 1.8 per cent rise during FY14-FY22, demonstrates its proactive approach to fiscal responsibility. The state’s commitment to innovation is further highlighted by the two-fold increase in patents filing between 2014-23. As UP emerges as a knowledge economy hub, it contributes significantly to India’s innovation narrative.
Employment dynamics and infrastructure investments:
The decline in youth unemployment and the improvement in female labour force participation underscore UP’s commitment to inclusive growth. The state’s credit/deposits 5-year CAGR outpacing the all-India average reflects its robust financial health. Furthermore, the substantial increase in the share of projects sanctioned by banks/FIs in FY23 signals an era of infrastructure development, promising enhanced connectivity within UP and beyond.
“The government’s proactive approach towards industrialisation and ease of doing business initiatives has created a conducive environment for businesses to thrive. The establishment of industrial corridors, special economic zones, and industrial parks has stimulated manufacturing activities, driving productivity gains and enhancing competitiveness in both domestic and international markets,” Venkataramana asserts.
“The ripple effects of such large-scale infrastructure development are profound, with investments pouring in, businesses flourishing, and ancillary industries experiencing robust growth, the state is all set to see an economic boost,” he adds.
The road ahead
Uttar Pradesh’s economic rise, akin to a harmonious symphony, reflects a state harnessing its vast potential across sectors. From the spiritual rejuvenation in Ayodhya to the industrial ambitions of the DMIC, UP is crafting a narrative of prosperity. As India marches towards a $5 trillion economy, Uttar Pradesh not only contributes significantly but emerges as a symbol of inclusive and sustainable growth. The state’s trajectory, marked by economic resilience and strategic initiatives, positions it as a beacon for other regions aspiring to achieve balanced and robust economic development.
