The challenge of poverty, unemployment and growth has not vanished from Uttar Pradesh. But a development vision is beginning to emerge and is being experimented with. Simultaneously there is a humanistic approach for social welfare schemes. The exceptional potential of the state and its interplay with the emerging scenario is set to catapult it as a pioneering template of a new India, says Prof Arvind Mohan
We are all privy to the tectonic shift that is moving the balance of economic power towards Asia, particularly towards India and China. The first 15 years of this century bear evidence to this
historic churning. A similar but relatively unnoticed transformation is getting scripted within India. The sleeping lion called Uttar Pradesh has just begun to walk and is raring to roar and leap. It will be interesting to understand as to what makes Uttar Pradesh stand out. And what are the facilitating trends which continue to inspire confidence.
A state that was finding it difficult to grow at four per cent odd during the 1990s is suddenly growing at around 6.5 per cent over the last few years. And for a short while, it outperformed India’s graph. In 2004, UP was ranked as one of the worst performing states on all fiscal indicators (FRBM indicators). However, in recent years, it is ranked as one of the best-performing states on five of the six fiscal indicators. It is today the best performer in implementing digital India; it has emerged as one of the top 10 states for ease of doing business and been adjudged the most “film-friendly state.” The list goes on.
Often Uttar Pradesh is compared with Bihar. Many contest that Bihar has achieved higher growth than Uttar Pradesh. However, what is being missed out is the base advantage. In a particular year, UP’s industrial output was around 48,000 crore and that of Bihar only 4,600 crore or so. An industrial investment or increased output of 1,100 crore in Bihar will count as almost 25 per cent industrial growth in Bihar. A similar increase in Uttar Pradesh will not even count. It needs to be noted that Uttar Pradesh is scripting an exceptional story which cannot be brushed aside in the garb of misleading comparisons.
Very few people know that UP has India’s second-most sophisticated manufacturing basket. Studies suggest that in terms of diversity of the range of goods produced by the state’s manufacturing sector, UP ranks second in India. Many products are comparable to the best in the world. Indicators of product sophistication confirm that the state’s manufacturing output is sophisticated for its level of development. lack of growth in manufacturing output has been India’s challenge for the last several decades and is today a major constituent of India’s structural challenge. If India has to move forward, it will have to unravel its manufacturing maze. The above mentioned manufacturing basket of Uttar Pradesh is one of the key engines of the said transformation.
It needs to be noted that firms in Noida are significantly more productive than the Indian average. The rate of profit is larger and the sales per worker are significantly higher. Similar advantage is not visible in other regions of UP. lack of connectivity and relevant infrastructure could be the explanation. However, the world is changing. The UP government has strategically started work on expressways which are expected to bridge this development deficit. The Agra-lucknow expressway is near completion and the government has initiated work on the Samajwadi Purvanchal Expressway with a 1,500 crore allocation. Once complete, the distance between Balia to Noida and Delhi should take around 11 hours to cover while lucknow to Noida could be done in hours. Obviously the manufacturing sophistication and efficiency of Noida is expected to trickle down to the rest of UP and put it on a fast track.
During the last few years, power generation has grown significantly. The availability of power to consumers has improved and the state government is striving hard to inch towards its commitment of providing 14 hours power to rural areas and 22 hours power to district headquarters. An allocation of 7,000 crore for a separate feeder line and 12,000 crore for rural electrification is a step in this direction.
UP’s agricultural map has shown erratic trends for more than a decade. The challenge of connectivity and markets on the one end and the shortage of irrigation capacity on the other have compromised agriculture. To add salt to injury, absence of logistics lines, cold chains and shortage of warehousing result in an annual loss of around 30,000 crore. The state’s effort towards building the lucknow-Agra Expressway and Samajwadi Purvanchal Expressway connect the land-locked districts of eastern UP with national, local and global markets. The state government is
proposing to bring a variety of mandis along the expressway. The emergence of warehouses and logistic lines along the trade corridor through private investment can be taken as a near given. If this happens, it will plug the above mentioned loss and will immediately reflect in enhanced GDP. This will result in immediate intervention towards poverty reduction and inflation management as well.
For almost 30 years, the irrigation capacities of rivers like Saryu, Sharda and Sahayak had gone stale and dormant. But the state government has revitalised these water systems, resulting in improved irrigation facility worth several lakh hectares of agricultural land in eastern UP and Bundelkhand regions. The Saryu system of
revitalisation has resulted in retrieving nearly 14 lakh hectares of irrigation capacity. Economic spinoffs are obvious.
While Uttar Pradesh is scripting a growth story for itself, it remains conscious of the fact that at least in the short run, there will be people who will be in distress and need support. Various pension schemes of the state government cover over one crore families or over five crore people in the state. In the drought-ravaged Bundelkhand, the pension schemes have ensured that almost all the BPl families are covered. In some locations, around 50 per cent of the population has been covered. The delay in access to medical attention has been the most important determinant of maternal and infant mortality. The state
government has ably addressed the challenge by initiating the 102 and 108 ambulance service. This has already started impacting maternal and infant mortality rates particularly in rural UP. The pension and health schemes constitute a very significant human face of the state’s development story.
The challenge of poverty, unemployment and growth has not vanished from Uttar Pradesh. It is there and alive. However, a development vision is beginning to emerge and is being experimented with. The exceptional potential of the state and its interplay with the emerging development vision is painting a new hope on the horizon. A morning can’t be far behind.
— Arvind Mohan, Economist