Remarkable feat: Uttar Pradesh's economy grew faster than many big states

Uttar Pradesh, the fifth-largest state in terms of size of economy, has grown at a faster rate (14.7 per cent) compared to even bigger states during the 2017-18 to 2021-22 period. This is a remarkable feat compared to leading states like Maharashtra (9.27 per cent) on nominal prices as well as real prices (5.02 per cent of Uttar Pradesh versus 4.71 per cent of Maharashtra).

According to a study by the Economic Advisor to the Chief Minister K V Raju and Rajesh Chauhan of the department of economics and statistics, planning department, Lucknow, the state has made significant progress in many areas during the last six years.  

Raju said UP has undertaken a reformist agenda to create an enabling environment for agricultural and industrial development.

The infrastructure boost and law and order situation in UP has helped generate a conducive environment for the economic development of the state. The state has targeted to become a $1-trillion economy by 2027-28, which seems achievable considering the changing investment scenario. 

It has achieved a nominal annual growth rate of 16.8 per cent in 2021-22, according to the quick estimates and repeated double-digit nominal growth (14.3 per cent) in the advance estimates of 2022-23.

The double-digit growth in Uttar Pradesh's economy is owing to the very high growth in industrial activity followed by agriculture and services in these years.

If we look at the compound annual growth rate (CAGR) of UP in 6 years (2017-18 to 2022-23) at real prices, it is noteworthy that the growth of gross state domestic product (GSDP) and its constituent sectors was around 15 per cent per annum.

As far as year-on-year (YoY) growth for 2022-23 is concerned, double-digit growth has been seen in mining and quarrying (32.87 per cent), manufacturing (15.56 per cent), fishing and aquaculture (13.88 per cent), electricity, gas, water supply & other utility services (12.44 per cent) and livestock (10.34 per cent).

Multidimensional poverty has come down to 18 per cent in 2015-16 compared to 36 per cent in 2005-06, indicating high inclusive growth.

Also, there is evidence to show that the unemployment rate has fallen to just 5.2 per cent. This is due to the various welfare and reform programmes undertaken by the Yogi Adityanath government.

The state’s goods and services tax (GST) shot up from Rs 51,000 crore in 2016, to 1.24 trillion now. During 2012-2017, banking business in UP was worth Rs 12.29 trillion, and now, it has increased to Rs 22.6 trillion during 2017-22.

Regional disparities are also shrinking: Regional imbalances have persisted in Uttar Pradesh for long.

There are four economic (vis-a-vis agro-climatic zones) regions in Uttar Pradesh — namely Western, Eastern, Central and Bundelkhand. Recently, the state government initiated an overall development plan for the state and made efforts to reduce regional disparities.

The percentage point gap in per capita income of the region with the lowest income compared to the region with the highest income was 100 percentage points in 2017-18. This reduced to 91 percentage points in 2021-22.

There are many targeted schemes and interventions in play to homogenise the growth in all the regions of Uttar Pradesh.

Budgetary allocation: The size of Uttar Pradesh’s Budget was Rs 3.85 trillion in 2017-18, and this increased by 79.4 per cent in six years. There has not only been a massive increase in the state Budget but it comes with a 90 percentage points increase in capital expenditure between 2017-18 and 2023-24.

During these years, health has been the priority area as it rose by 176 percentage points, and likewise, rural development increased by 107 percentage points.

The hike in budgetary allocations led to giving due attention to left out areas of the economy in the state. 

Agriculture: There has been over 10 percentage points increase in total irrigated area in the state during 2015-16 to 2019-20. This has resulted in higher production of food grains from 49,903 million tonnes (MT) in 2016-17 to 59,480 MT in 2021-22

It also saw a massive 62 percentage points increase in production of sugarcane during the same period. The Yogi government has been proactive on natural and organic farming in the state, and this is resulting in higher income for the farmers.

Total area under natural farming in UP is 87,643 hectares and 78,580 hectares is for organic farming.