Brand Uttar Pradesh is yet to make a mark and be counted as one among the industrial states even as Mayawati completes two years in office as state chief minister on May 13.
The state had announced the New Economic Policy in December 2007 envisaging investment to the tune of Rs 1.35 lakh crore with major thrust on public private partnership (PPP). However, the policy has failed to attract investors.
For instance, there have been several rounds of open bidding and re-bidding in sectors such as power, sugar, transport, education, tourism, infrastructure and health, but nothing worthwhile has emerged, except for the mega Ganga Expressway project.
The government’s flagship Ballia-Greater Noida GEP, estimated at Rs 30,000 crore, was awarded to Jaypee Group in January 2008. “The land acquisition process is on,” a senior industry department official told Business Standard. The much-delayed six-lane Yamuna Expressway (earlier known as Taj Expressway), covering a distance of 165 km from Greater Noida to Agra, is also being developed by Jaypee.
“UP implemented the value added tax (VAT) in January 2007, which was a welcome step, but its implementation has been far from satisfactory. This gives out a wrong signal to the industry,” Assocham secretary general S B Agarwal said. He said the government had not formulated any new policy in the last two years but only twisted old policies, which have borne no fruits.
POWER
The government intends to augment its power generation capacity by 10,000 Megawatt (Mw) by 2012. The generation capacity of all the 26-odd hydro and thermal power units in the state currently is under 3,000 Mw, while the peak hour demand touches 10,000 Mw. The state routinely imports about 3,500 Mw.
Towards this, it has proposed two thermal power plants in Allahabad district. The thermal power plants witnessed multiple rounds of bidding and finally were awarded to the Jaypee group, but things are yet to move in that direction.
SUGAR COOPERATIVES
Likewise, its plan to privatise 33 sugar cooperative mills too also failed, since the bidding companies were not ready to pay the reserve price for these units. The government is likely to undertake the bidding process again after rationalising the reserve price. The bid to privatise 25 of the 28 cooperative sugar mills could not take off.
In the education sector, the plan to hand over 25 polytechnics and 125 ITIs to the private partner after bidding met with no success due to opposition from teachers and employees too could not take off.
Besides, the government is yet to announce its retail policy after it ordered closure of Reliance Fresh stores on August 23, 2007, following protest.
TOURISM
The 50-odd properties of the tourism department for privatisation too have not found suitors. The proposed international airport at Kushinagar and development of the Buddhist Circuit in public private partnership on design, built, finance, operate, transfer basis is heading nowhere though several months have elapsed. IL&FS is the project consultant.
“We have suggested the state government to formulate different policies for different sectors, such as IT, automobile, textiles, infrastructure, power and banking,” PHD Chamber resident director Brig Amitabha said. The industry wants the Udyog Bandhu to be given more teeth so that it could act as a single-window system for the state industry.
PRO-INDUSTRY POLICIES
The government is now taking steps to make UP more investor-friendly. Last month, the industry department solicited suggestions from the industry for the formulation of pro-industry policies. “There has been some welcome change at the bureaucratic level as far as industry is concerned. For the first time, a senior bureaucrat has been put at the helm of Udyog Bandhu,” DS Verma, executive director, Indian Industry Association, said.
