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Industrial Development & Economic Growth in Uttar Pradesh

March, 2018

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 17.83 per cent share in the country’s total food grain output in 2016-17. 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 2011-12 and 2016-17, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 10.36 per cent to US$ 203.04 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 10.32 per cent to US$ 180.54 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 June 2017, the state had 19 notified special economic zones (SEZs).

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$ 59.7 billion Budget for 2017-18. 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.
  • As of January 2018, 10 cities have been included by the central government upto the fourth round of the Smart Cities Mission in the state.
  • The state has recently introduced the Uttar Pradesh Civil Aviation Promotion Policy 2017 for creating a conducive business environment, providing adequate incentives for the development of robust civil aviation infrastructure and attracting investments to realize the untapped potential in the aviation sector.
  • 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 Uttar Pradesh Information Technology and Start-up Policy, 2016 is aimed at promoting Uttar Pradesh as a preferred and attractive location for investments for various IT/ITeS companies and for establishing IT Parks as well as IT cities for the development of IT Infrastructure in the state.
  • 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 20 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.
  • 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 2017-18, the state government is targeting to supply power for 24 hours in the urban areas and for 18 hours in the rural areas. Further, the government aims to provide 24x7 electricity by October 2018.

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