Industrial Development & Economic Growth in Uttar Pradesh

Uttar Pradesh is the most populous state in India with a population of nearly 200 million people.

The Gross State Domestic Product (GSDP) of Uttar Pradesh grew at a CAGR of around 8.43% between 2015-16 and 2020-21 to reach Rs. 17.06 trillion (US$ 234.96 billion). The Net State Domestic Product (NSDP) grew at a CAGR of around 8.42% between 2015-16 and 2020-21 to reach Rs. 15.12 trillion (US$ 208.34 billion).

Uttar Pradesh is recognised as a major milk-producing state in India. Milk production in the state stood at 30.5 million tonnes in 2018-19, accounting for 16.50% of the total milk production of the country. Per capita milk availability in the state stood at 359 grams per day in 2018-19.

As of February 2021, Uttar Pradesh had an installed power generation capacity of 27,309.40 MW—6,242.00 MW (state utilities), 13,411.49 MW (private utilities) and 7,655.71 MW (central utilities).  Energy requirement in the state was 107,109 million units (MU) between 2019-20.

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.

Merchandise exports from Uttar Pradesh reached US$ 16.99 billion in 2019-20 and US$ 12.93 billion in April 2020 to January 2021.

Uttar Pradesh is a favoured tourist destination in India with Taj Mahal, one of the eight Wonders of the World, located in Agra. In 2019, domestic tourist arrival in the state reached 535.8 million. Foreign tourist arrival crossed over 4.74 million.

The state attracted Foreign Direct Investment (FDI) equity inflow worth US$ 560.74 million between October 2019 and December 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). In 2019, 147 investment intentions worth Rs. 16,799 crore (US$ 2.40 billion) were filed in Uttar Pradesh.

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

• In August 2020, Asian Development Bank (ADB) approved a US$ 1 billion loan for the high-speed Regional Rapid Transit System (RRTS) corridor between Delhi and Meerut in Uttar Pradesh.
• Solar Energy Policy 2017 implemented with an objective to attract private investments for increasing solar power generation. Target to generate 10,700 MW of solar power by 2022.
• In December 2019, Zurich Airport International got the approval from state cabinet to develop and construct Jewar Aiport.
• In 2019, the state recorded the fastest construction of houses under Pradhan Mantri Awas Yojna with 14.26 lakh houses constructed from 2016-17 to 2019-20.
• In February 2020, the state organised Defence Expo-2020 and received proposals worth Rs. 5 lakh crore (US$ 70.93 billion) for investment. Investments were focused on key sectors such as IT & ITeS, Dairy, Electronics, Tourism, Manufacturing, Renewable Energy, Agro, and Food Processing.
• The state cabinet approved UP Defence and Aerospace Units and Employment Promotion Policy 2018 with an intention to generate 250 thousand jobs and attract investment worth Rs. 50,000 crores (US$ 7.46 billion) over the next five years.
• As of October 2020, Uttar Pradesh had 21 notified, 13 operational SEZs and 24 formally approved SEZs. 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 and Industrial Investment Policy, 2012. The state has well-drafted, sector-specific policies for IT and biotechnology. The new Uttar Pradesh Civil Aviation Promotion Policy 2017 was brought to promote investment and trade in Uttar Pradesh and to promote tourism while increased road connectivity along with air connectivity will create more employment avenues.
• Uttar Pradesh announced New Electronics Manufacturing Policy, 2020, to position the state as a global electronics hub. Through this policy, the govt. intends to attract investment worth Rs. 40,000 crore (US$57.3 billion) in the next five years. 
• State govt. also passed Uttar Pradesh Startup Policy, 2020. The objective of the policy is to be among top 3 states in Start Up ranking, establish/support a minimum 1 incubator in each district of the state and create an ecosystem for at least 10,000 startups in the state among others.

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