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Uttar Pradesh is poised for over 10 per cent growth by 2016-17 due to its robust performance in manufacturing and services sectors, aided by proactive policies, according to a study.
The Associated Chambers of Commerce and Industry of India (Assocham) said UP’s parameters started to outperform India’s on various fronts, including economic growth, infrastructure development, industry, services sector growth and labour productivity.
Clocking a compound annual growth rate (CAGR) of 6.7 per cent in 2004-05 and 2013-14, UP surpassed India’s growth of 4.6 per cent in the period, said the study, UP: Inching towards double digit growth.
UP, with 8.1 per cent growth in 2013-14, also outperformed India, which had corresponding figure of 4.7 per cent, Assocham national secretary general D S Rawat said here on Monday. UP was expected to grow at 9.3 per cent in the current financial year.
“If UP keeps its growth momentum and makes further strides in the power and infrastructure sectors, the state would clock double-digit growth within the next two financial years,” he said.
At 2.5 per cent CAGR during 2012-13, UP’s growth in the manufacturing sector has been higher than the national growth of 2.1 per cent, while industrial growth recorded in UP and India as a whole remained at 0.5 per cent, highlighted the study.
However, the state posted a slower growth rate of 2.6 per cent compared to India’s 4.7 per cent CAGR in terms of agriculture and allied activities. This is worrying, as UP accounts for the largest foodgrain production (19 per cent share in 2013-14), largest sugarcane production (39 per cent share in 2013-14) and the third largest horticulture production (10 per cent share) in India.
Rawat suggested UP needed corrective measures to revive agriculture, as it an agrarian economy and holds tremendous potential.
UP has attracted significant investments in agri-infrastructure, wholesale and retail trading, storage, distribution and irrigation sectors.
Services sector accounts for the highest share of 57 per cent in UP’s gross state domestic product (GSDP) in 2014, followed by agriculture and allied activities (22 per cent) and industry (21 per cent).
The study said UP was grappling with power deficit as normal demand and supply represented a deficit of 14 per cent in 2013-14. It attracted 102 investment projects in power generation and distribution worth Rs 2 lakh-crore in 2013-14 with a share of over four per cent in Rs 50 lakh-crore worth of investments attracted by the sector across India.
However, 68 per cent of this investment in UP remained a non-starter. Thus, the state needed policy initiative to improve implementation ratio of power projects.
Law and order, dearth of skilled labour, lack of raw material availability were the other major bottlenecks faced by industries across UP.
Assocham suggested the state promote private sector participation on a bigger scale by luring them through tax incentives and rebates to ensure effective implementation of projects, promote food processing sector, upgrade infrastructure to promote tourism and other sectors to realise its double-digit growth potential.
The state should also promote entrepreneurship by developing the SME sector and resolving issues concerning finance, technology, skill development, policy, compliance and others.
