UP achieves plan target in 2005-06

After 20 years, Uttar Pradesh is likely to achieve the target set for expenditure in the annual plan for the 2005-06.

The private sector too has finally started looking at UP as an industrial destination. The state has received the highest number of industrial entrepreneur memoranda among all states in the country for 2005.

The annual plan for the fiscal was fixed at Rs.13, 500 crore, and senior officials are certain that this year the achievement will be 100 per cent.

The last time UP fully achieved its target was in the middle of the eighties. Some deterioration was evident in the closing years of that decade. But the worst performance came in the last decade, when achievement was as low as 78 per cent in some years.

This achievement has been in spite of a deterioration in law and order, the decline in the working of the principal industry institutions like UPSIDC and PICUP, and a general atmosphere of non-governance and profligacy on the part of the rulers.

The latest statistics point out that expenditure up to November 2005 was Rs 6010 crore, as against Rs 3198 crore in the fiscal 2004-05, an improvement of Rs 2,198 crore.

It is on the basis of this performance that the Planning Commission has given an enhanced outlay of Rs 19, 000 crore, an increase of 40 per cent. Thus the growth rate in 2005-06 is likely to be 6 per cent, as against 5.2 per cent in 2004-05,5.9 per cent in 2003-04 and 0.1 per cent in 2002-03.

For the period up to November 2005, resource mobilisation has been enhanced by 23.1 per cent, reaching Rs 11, 346 crore, as against Rs 9220 crore last fiscal.

The trade tax collection has been higher by 30 per cent, despite UP's refusal to implement VAT.

Similar to these have been industrial investment. The investment proposals received have caught everyone by surprise. In the year 2004, these amounted to Rs.14, 249 cr and till sept 2005, these have for the year 2005,reached a record figure of Rs.25, 979 cr.

Thus in the year 2005, UP has received highest number of proposals 562 amongst all the states, followed by Maharashtra 526 and Gujarat 496.

This has been primarily due to large benefits granted to the industry under the new sugar policy where incentives are being given to expanding and new sugar units.

A total investment of Rs.19089 cr has been proposed in 298 IEM's, of which Rs.4000 cr of investment is already in the pipeline. Similarly for food processing, a total ,investment of Rs239 cr has been proposed in 44 IEM's.

Similarly, in the IT sector the government claims that several IT parks , viz of Wipro, NIIT, Moser Baer, HCL and Perot systems are on the anvil.

The government has formed a committee under Mr.Azam Khan to go into the question of the Yarn making units in the state sector. Yarn is required for the handloom and the power loom units.

However, UP faces major challenge in tackling sickness in the SSI sector. According to the survey of union government in 2002, UP had a total of 2,85,220 SSI Units of which 1,62,938 were working and 1,22,282 wereclosed/sick. The percentage of sick/closed units was as high as 42.87%. Mr Atul Gupta, Industrial Production Commissioner, UP, said that this has been the result of globalisation and as yet there is no policy on the part of the central government to assist the states for rehabilitation/ revival of these units. The principal reasons for there sickness has been working capital shortage 75.36%, lack of demand 33.09%, powershortge 23.79%, and marketing problems 22.17%.

Meanwhile, IL&FS is conducting a study on establishing a textile and apparel park in Gorakhpur. Similarly in greater Noida the apparel association is establishing a textile park. . The Lucknow Industry development Authority, LIDA, is toying with the idea of establishing Information Technology, Textiles and biotechnology as the sectors for LIDA.

Dadri is set to develop as a major industrial hub. Gujarat Ambuja, Grasim have expressed desire to establish cement units. The former has already acquired land. After Reliance, Tata's too have shown inclination to expand in the area.

Some sensible decision-making is finally emerging on the power front as well. The government is planning to establish Anpara 'D' with BHEL for 1000 MW. Asked about Anpara 'c', officials point out that the privatisation process, has gone far ahead in that case to be reversed; that will come up under the private sector.

The industrial growth rate has picked up and the projected achievement for 05-06 is 5.6%, as against 4.8% in 04-05.In the five years from 1997-2002 the industry growth rate was 3. % And from 92-97 it was 4.2% and in 1990-92 it was only 1.1%. As against this the industry growth rate in 1985-90 was 10.5%. Thus UP has still to come to terms with the post reform period as far as industrial growth is concerned and yet is nowhere near the growth rates which it had achieved prior to the reform process. EOM.