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Industrial Development & Economic Growth in Uttar Pradesh

October, 2017

Uttar Pradesh is the most populous state in India, with a large pool of skilled, semi-skilled and unskilled labour. Alternately, the population is also looked upon as the largest consumer base in the country with around 200 million people. It is the largest producer of food grains among all states in India and accounted for about 18.39 per cent share in the country’s total food grain output in 2015-16. The state has become a hub for the semiconductor industry with several major players having their offices and research and development (R&D) centres in Noida.

Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 10.52 per cent to US$ 174.95 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 10.62 per cent to US$ 156.67 billion.

The state’s resources, policy incentives, infrastructure and climate are best suited for investments in diverse sectors such as Information Technology (IT), agro-based and food processing, light engineering goods, sports goods, textiles, leather-based, tourism and biotechnology.

The state has a well-developed social, physical and industrial infrastructure. It also has good connectivity through 48 national highways, six airports and rail links to all major cities. The state has witnessed a high rate of infrastructure growth in the recent past. There has been a considerable rise in the number of industrial clusters/hubs and Public-Private-Partnership (PPP) projects in the infrastructure domain.

The Uttar Pradesh State Industrial Development Corporation (UPSIDC) and the Department of Infrastructure and Industrial Development are responsible for the development of industrial infrastructure in the state.

The state has a robust industrial infrastructure, including 15 industrial areas, 12 specialised parks, four growth centres and industrial infrastructure development centres (IIDC). As of July 2016, the state had 19 notified special economic zones (SEZs). As per the 12th Five-Year Plan, the state’s industrial growth rate is expected to average 11.2 per cent per annum.

Some of the major initiatives taken by the government to promote Uttar Pradesh as an investment destination are:

  • The Government of Uttar Pradesh presented a US$ 52,999.50 million Budget for 2016-17. The main objectives of the budget are:
    • To promote participatory development in improving infrastructural facilities and ensure that the benefits reach the farmers, labourers and the poor in the state.
    • To incorporate latest technology in carrying out various programmes and schemes.
    • To maintain efficiency and transparency in administration.
  • The state is in the process of implementing and testing the public–private partnership model in the power sector with an input-based franchisee system.
  • The state offers a wide range of subsidies, policy and fiscal incentives as well as assistance for businesses under the Industrial and Service Sector Investment Policy, 2004 and Infrastructure & Industrial Investment Policy, 2012.
  • The state has well-drafted, sector specific policies for IT and biotech.
  • The state government has set up Udyog Bandhu to facilitate investment in industrial and service sectors. The organisation has a three-tier structure with presence at district, divisional and state levels.
  • The government of Uttar Pradesh has sanctioned 22 SEZs across the state, such as IT and ITeS, electronic hardware and software, handicrafts and agro-based industries.
  • The state has proposed 40 IT/ITeS parks (apart from IT SEZs), two biotech zones and a knowledge park. Development of integrated agro/food processing zones has been proposed at Hapur, about 54 km from Delhi.
  • An apparel park at Tronica City, Ghaziabad, and a textile and hosiery park at Rooma, Dist., Kanpur, have been set up by UPSIDC to promote the apparel industry.
  • As per state budget 2016-17, the state government is targeting to supply power for 22 to 24 hours in the urban areas and for 16 hours in the rural areas, from October 2016. Further, the action plan for provision of 24x7 power supply in the state from 2019-20, has also been prepared by the state government.

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