Uttar Pradesh

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Industrial Development & Economic Growth in Uttar Pradesh

October, 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. Pulses production in the state stood at 1,985.0 thousand tonnes in 2017-18 and production of vegetables are 28,226.19 thousand tonnes in 2017-18. 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 2017-18, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 11.29 per cent to Rs 13.76 trillion (US$ 213.44 billion) whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.24 per cent to Rs 12.22 trillion (US$ 189.62 billion).

As of August 2018, Uttar Pradesh had an installed power generation capacity of 24,909.33 MW (comprising 6,218.20 MW under state utilities, 12,223.24 MW under private utilities & 6,467.89 MW under central utilities).

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 2018, the state had 21 notified, 12 operational SEZs and 24 formally approved SEZs. Merchandise exports from Uttar Pradesh reach US$ 13.80 billion in 2017-18.

In 2017, domestic tourist arrivals in the state were 234 million and stood second. Foreign tourist arrivals had crossed over 3.57 million and rank third.

According to the Department of Industrial Policy & Promotion (DIPP), cumulative FDI inflows in Uttar Pradesh, during April 2000 to June 2018, amounted to US$ 680 million.

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

  • The Government of Uttar Pradesh presented Rs 4,28,384.52 crore (US$ 66.47 billion) Budget for 2018-19.
  • In January 2018, 10 cities have been included by the central government up to the fourth round of the Smart Cities Mission in the state.
  • As of July 2018, Rs 800 crore (US$ 119.33 million) has been released for smart city projects in Uttar Pradesh.
  • As per Investor Summit 2018, Uttar Pradesh government will majorly focus on key sectors such as:
    • IT and ITeS
    • Dairy
    • Electronics
    • Tourism
    • Manufacturing
    • Renewable Energy
    • Agro & Food Processing
  • In June 2018, Cabinet Committee on Economic Affairs approved construction of 9.9 km long new 6 lane bridge across river Ganga at Phaphamau in Allahabad with a cost of Rs 1,948.25 crore (US$  290.61  million).
  • In state budget 2018-19, Uttar Pradesh government has increased its railway budget to Rs 36,000 crore (US$ 5.59 billion) for development of several railway projects as compared to previous year.
  • 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.
  • As per state budget 2018-19, Rs 29,883 crore (US$ 4.64 billion) has been allocated to power sector schemes.
  • The state cabinet approved UP Defence and Aerospace Units and Employment Promotion Policy 2018, with an intention to generate 0.25 million jobs and expects an investment of Rs 50,000 crores (US$ 7.46 billion) over the next five years.
  • 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 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.

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