UP chases investors but problems stay

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UP chases investors but problems stay

Monday, 13 February 2023 | Shivaji Sarkar

UP chases investors but problems stay

Poverty and unemployment are still big problems for the state

Investment is coming to Uttar Pradesh. Figures are mind boggling. In the run-up to the Global Investors Summit, the state claimed to have received Rs 1.68 lakh crore through ‘Nivesh Sarathi’ portal. This is in addition to Rs 1.88 lakh supposed to have poured in between 2018 and 2021.

Chief Minister Yogi Adityanath is helping Prime Minister Narendra Modi in building up a $5-trillion economy by making UP itself a $1-trillion economy. It will create 5.5 lakh jobs, UP claims. But kharif losses and high poverty cause drain on state finances.

The mega shows have had a pattern in UP since the mid-1990s. In 2022-23, UP claimed to have emerged as the third largest state with a nominal GDP of Rs 20.48 lakh crore. In the 1990s, chief minister Mulayam Singh Yadav announced figures of Rs 54,000 to Rs 57,000 crore a number of times as investments through the MoUs. The real figures were always far less.

On the job front, UP has been lagging behind. Unemployment moved up from 2.1 per cent in July 2017 to 21.5 per cent in April 2020 at the peak of Covid-19, according to a survey conducted by the Centre for Monitoring Indian Economy (CMIE). Now it has come down to 4.33 per cent after fluctuating during January-December 2022. The state government has come out with a new MSME policy. It may be recalled that a large number of MSMEs have suffered heavily since 2019.

Small businesses have been hit disproportionately hard by the continuing power crisis, with several units shutting down operations during outages, causing production losses. “Power outages lead to loss of production opportunities and the usage of power backups nearly doubles the cost of power,” says Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small and Medium Enterprises (FISME). He says the cost of power soars to Rs 12-13 per unit in case of power backups from the Rs 8 per unit generally charged by distribution companies. GST also hits them.

CM Ayadityanth says that to promote the real estate sector, UP has charted out plans to buy 43,000 acres of land for Rs 7.3 trillion. The move deprives farmers of land and creates new job seekers. The state is planning to build about 6.4 million new housing units. The state government, however, claims that 4.5 lakh jobs have been provided to youth in the last five years in the government sector, and many more in the private sector. It refutes the CMIE figures.

In UP, the number of unemployed persons—those without jobs but willing to work—has risen from about 40 lakh in January-April 2017 to nearly 56 lakh in May-August 2021, as per the CMIE. There is also pressure on the rural and agriculture sectors as the post-Covid-19 situation has hit them hard.

The Jewar international airport project, being built by the Tatas, is yet another mega project. The massive takeover of land all over the state for toll roads, metro, airports, etc., is expected to yield political dividends in the run up to the 2024 elections.

The state has acute poverty. Its 37.79 per cent population is extremely poor. Another 44.47 per cent is malnourished, highest in the country after Bihar and Jharkhand.

Despite private sector investment promises, it may not be easy for the most populous state to maintain its finances. The state has a public debt of 32.5 per cent. With not much state enterprises left, dependence on the private sector is a compulsion. Private investments may look good but can hardly support the functioning of the state.

(The author is a senior journalist)




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