 "UP Public Works Department Minister Shivpal Singh Yadav addresses participants at 'Samriddhi', Business Standard's annual conclave")
Uttar Pradesh, with its bustling population of over 200 million (the most among India's states), is often likened to a country in itself. Primarily an agrarian economy, the state is endowed with some of the most fertile land in the country. Many of its principal towns are famous for their unique traditional industrial clusters - Varanasi (zari and silk), Bhadohi (carpets), Lucknow (chikan), Kanpur (leather), Agra (footwear, leather), Aligarh (locks), Moradabad (brassware) and Meerut (sports goods).
UP houses over three million micro, small and medium enterprises (MSMEs) - roughly 12 per cent of India's MSME might. The sector contributes 50 per cent of UP's gross state domestic product and employs, directly and indirectly, 40 million people.
The growth in population and the migration of rural folk to urban areas in search of employment has been posing challenges for the government in terms of improving urban infrastructure and creating new jobs in the public and private sectors. The rising demand for energy is another area of concern, in addition to ensuring agricultural prosperity for food security and sustenance of rural folk.
In this backdrop, Business Standard recently organised the sixth edition of 'Samriddhi' in Lucknow to discuss the agenda for faster economic and infrastructure development in UP. The select gathering comprised industrialists, bankers, economists, government officials, senior private sector executives and other experts.
Inaugurating the conclave, the chief guest, UP Public Works Department Minister Shivpal Singh Yadav, claimed that the pro-industry initiatives taken by the current government had improved the ease of doing business.
He said setting up new industrial units had become much easier, even as he reminded the audience of the unlimited business potential in UP owing to the large consumer market.
"The ruling Samajwadi Party government has delivered on the front of welfare of masses and paved the way for the composite development of UP. Today, big industrial houses are investing here and actively partnering and cooperating in this ongoing process," he underlined.
To buttress his point, he referred to the new Revenue Code implemented in the state, which has eased the process of land acquisition for industrial and infrastructure projects.
In his address, UP Planning Commission Member Prof Sudhir Panwar said proper synergy between agriculture and industry could multiply growth in the farm sector. Seven per cent of the state's population was associated with agriculture, he said, with five million farmers' households engaged in growing sugarcane alone.
"The agricultural sector has huge potential and several agro clusters already exist in the state…I wonder why the industry has still not taken to the UP agro processing sector. The private sector must realise that governments cannot run industry and they have an unlimited potential to harness," he added.
He further suggested that the MSME sector could benefit from the huge tourism potential in the state by foraying into the souvenir business. "Tourists normally buy souvenirs for keepsake and memories when they return after visiting a famous tourist spot. This segment is still unexplored by industry."
The inaugural session was followed by a panel discussion comprising senior bureaucrats, an industrialist and a banker, on various aspects of the development of UP.
The panelists included UP Agricultural Production Commissioner (APC) Pravir Kumar; UP Expressway Industrial Development Authority (UPEIDA) Chairman and CEO Navneet Sehgal; Principal Secretary, Industries, Mahesh Kumar Gupta; UP State Industrial Development Corporation (UPSIDC) MD Manoj Singh; Jet Knitwears Private Limited MD Balram Narula and Union Bank of India (UBI) General Manager L D Rewatkar.
Pravir Kumar said despite being a landlocked state, UP had been working towards capitalising on its strengths for speedier economic and agricultural progress.
"We have skilled manpower, fertile swathes of land and the state makes a significant contribution to India in terms of annual agricultural production. However, we need industries for value addition to the agricultural sector to increase farm income and to check pilferage," he said.
He added that almost 25-30 per cent of the state's farm production was wasted due to inadequate pre- and post-harvest techniques and infrastructure. "Mere ramping up of agricultural production will not deliver the goods to farmers, unless their incomes go up in the same proportion with support from industry in terms of food processing and agro value addition."
Gupta said the new expressways being built by the state government would provide faster connectivity throughout the state and encourage industries to move beyond Noida and Greater Noida in search of investment opportunities.
"The industrial areas of Kanpur and Naini (Allahabad), which have been facing tough times in the past several years, are being revived, while new industrial hubs are also being developed," he said, and referred to the proposed Perfume Park in Kannauj, Plastics Park in Auriya and Lucknow IT City.
He maintained that poor road connectivity had been the main factor that had prevented industries from setting up units in the remote areas of the state. "The proposed new expressways will resolve this lacuna for good."
Meanwhile, Sehgal underlined that the various road projects in the state were progressing at a fast pace and meeting their timelines. Singh said UPSIDC had acquired 4,200 acres of land in UP and notified an additional 176,000 acres for future industrial and cluster development. The state was targeting 22 per cent growth in the manufacturing sector, he said.
The central government had also allowed the Special Economic Zone in Moradabad to be developed as a multi-product manufacturing cluster, which makes it more attractive and viable, he said.
"Over the last three-and-a-half years, about 1,560 new units facilitated by UPSIDC have reached the production stage, of which only 15-20 per cent are located in the Noida and Greater Noida region," he added.
Projects worth about Rs 40,000 crore are currently in the pipeline under UPSIDC, including a Rs 9,500 crore GAIL project and the Rs 15,000 crore Mathura Refinery expansion project.
Narula urged the UP government to help the MSME sector and suggested simplification of rules pertaining to clearances and no objection certificates. Industrial units were still compelled to take clearances from 27 departments, he said.
"The state government has proposed that new investment proposals of over Rs 50 crore would be routed through the single window clearance system. But, what about the investment proposals of less than Rs 50 crore," he asked, adding that MSMEs were probably not a focus area for the government. Getting bank credit, he said, was still difficult for industrialists.
