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ASSOCHAM's six point growth agenda for State - Study

Capital Market 

Apex industry body has submitted a six-point innovative five-year-development agenda to the Chief Minister Uttar Pradesh Yogi Adityanath to serve as a quick guide to the areas needing interventions to help new government focuses its energies for growth of the state.

The 'Action Agenda' was jointly prepared by and Thought Arbitrage Research Institute (TARI).

The study has recommended a slew of measures for making Uttar Pradesh a vibrant economy with a focus on skill development, agriculture, horticulture, handicraft, handloom, leather and leather products.

Suggesting an economic road map for the next five years to the Yogi Adityanath Government, the study noted that the net migration of people in the age-group of 20-29 years was found to be 58,34,000 between 2001-11 up from 29,55,000 in 1991-2001. The net migration is more than double that of the next state in the pan-India list - Bihar. Besides, it is not always that only illiterate and labour class migrate; often highly skilled talents are also lost to migration.

Monitoring and management centres of the State Skill Development Mission should be set up at district level. Focus of skilling programme should be on high growth areas such as agriculture, building and constructions, handloom and handicraft, food processing, healthcare, leather and unorganised sector - beauty culture, security guards, facility management etc, adds the paper.

District-specific policies for skilling and livelihood generation in migration-hit regions should be formulated. Focus of skilling should be on trades in which they gain employment outside the state construction, (ii) organised retail, (iii)transportation (drivers) to help them gain competitive advantage, highlighted the study.

Economic growth of Uttar Pradesh is critical for India since it is the most populous state as well as home to the most number of poor - 17% of the total population and 22% of the total poor (Census 2011). An economically stronger Uttar Pradesh with its huge market can be an engine of growth for rest of the country.

The state's economic growth (GSDP) has been, for most of the time in the past decade, lower than the national average. This lower growth has been accompanied with a higher population growth. Its decadal growth in population between 1991 and 2001 was 25.8%, as against the national average of 21.3% and that between 2001 and 2011, it was 20.9% against the national average of 17.64%, noted the study.

If we look at the sectoral composition of GSDP, it is the services sector which drives the growth and contributes about 60% to the total income. This is followed by agriculture and allied activities, contributing more than 20%. The industries contribute the least, reflecting poor industrial activities in the state.

There is, therefore, a need to rework the state's strategies towards improving public investment and encourage private participation in agriculture and allied activities. Not only is there need to catch up with the higher productivity level of Punjab, Haryana, Maharashtra and Tamil Nadu in food grains by providing improved seeds, training farmers to adopt modern and scientific practices, but there is also a need to pay attention to neglected crops like sugar, maize, groundnut, fruits and vegetables in terms of availability of improved seeds and marketing facilities. Promoting bio-technology and genetic engineering could help. Since farming is rain-dependent, the priority should be to develop community-based surface water irrigation.

The state's industrial sector is driven by the small and medium scale industries - contributing about 60% of total manufacturing output and significant employment (about 60 lakhs). The state's strategy of setting up industrial clusters has produced rich dividend and should be continued. However, poor marketing linkages and skill level are lingering concerns which needs to be addressed. Common skilling centres for a group of product cluster in modern design, production management, sales and marketing, inventory management and soft skills would help.

The state should also focus on the development of integrated industrial towns (NIMZs) in Auraiya and Jhansi,setting up of Dadri-Noida-Ghaziabad Investment Region, IT Investment Region (ITIR) along Agra-Lucknow expressway and mega food park in Jagdishpur - all are either proposed or cleared. More such projects could be taken up.

Finance is a major concern, especially for SSIs and MSMEs, since long term loans are not available in the existing financing channels. There is a need to revive the erstwhile state industrial development corporations. FDI inflows have been meagre, in comparison to states like Maharashtra, Haryana, Karnataka and Gujarat. It is important that the state studies the FDI policies of those states and tweaks its own policies accordingly and take steps to improve ease of doing business to attract more investment.

The services sector has been doing well and driving the state's growth but there is a greater potential to grow, especially in education and health services, given the poor state of affairs in these areas. The budget allocations need to at least double to catch up with the rest of India in terms of coverage. Low literacy base, high drop out of students, poor student-teacher ratio and lack of adequate higher education institutions should be addressed by roping in private and voluntary sectors.

Tourism is another area in which growth prospects are high but require significant investments. Encouraging private sector to build hotels, recreation facilities and development of civic facilities in existing tourist destinations and developing new tourist centres to attract tourists to religious and historical places and wildlife sanctuaries/parks could pay rich dividend.

Infrastructure has emerged as a major constraint for growth. The state's power shortage was highest in India in 2015-16 (12.5%). The per capita consumption of power is nearly half the national average. The state needs to revisit its 2009 energy policy to bring greater participation of the private sector, improve transmission and distribution through modernisation and cut in AT&C loss (about 50%). Efforts should also be made to complete the ongoing projects since about 68% of all power sector investment are under implementation stage.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 12 2017. 13:49 IST
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