UP investment curve slides

Uttar Pradesh, which is desperately seeking to woo industrialists, has been witnessing a declining investment trend over the past several years.

The gloomy investment curve spans three successive regimes viz. erstwhile Mulayam Singh Yadav (2004-07) and Mayawati governments (2007-12), as well as the incumbent Akhilesh Yadav government. High hopes pinned on Akhilesh Yadav as the poster boy of the ruling Samajwadi Party hasn’t helped the state attract fresh investment either.

An analysis of data provided by Udyog Bandhu, in reply to a Right to Information (RTI) application, showed that UP clocked a rising investment trend only during 2003-06 in the last decade (2003-14).

Since 2006, there has been sustained decline in actual investment flow and broadly in proposed investments as well (see table).

This potentially points towards the failure of the state and largely 'Brand UP' to catch the fancy of investors and industrialists alike.

Udyog Bandhu was instituted by UP to facilitate investment in industrial and service sectors, besides resolving problems of industry. It primarily tracks investment flow in the heavy industries segment.

The scarcity of enabling infrastructure especially power, red-tapism, vote-bank politics and lack of political will are the major impediments in the path of faster economic growth in UP, thus hampering fresh investment avenues.

The number of investment proposals has also fluctuated over the years and interestingly hit bottom low during the current fiscal.

During 2006-07, investment proposals worth almost Rs 38,300 crore were reported, of which only Rs 7,774 crore were actually invested during the fiscal. Thereafter, it has been a downward slide for the state’s industrial landscape.

During 2010-11 and 2011-12, the quantum of investment proposals showed encouraging upward trend at Rs 22,073 crore and Rs 24,798 crore respectively. However, the actual investments during the corresponding financial years at Rs 1,637 crore and Rs 1,594 crore maintained the decreasing pattern on the chart.

The distressing fact is that the conversion ratio of investment proposals materialising has dipped significantly in recent years, which is quite worrisome.

In the current fiscal so far, investment proposals worth Rs 6,624 had been received, while the data pertaining to actual investment is still not collated by Udyog Bandhu.

Table containing UP investment data
Fiscal	No of investment proposals	Investment proposals
		(Rs crore)	Actual investment
			(Rs crore)	Conversion ratio
				(%age)
2003-04	239	1,609	1,039	65
2004-05	562	22,433	6,427	29
2005-06	632	38,660	11,995	31
2006-07	476	38,297	7,774	20
2007-08	187	13,709	3,350	24
2008-09	203	13,089	3,046	23
2009-10	175	10,468	2,740	26
2010-11	148	22,073	1,637	7.4
2011-12	175	24,798	1,594	6.4
2012-13	139	14,806	1,519	10.3
2013-14	76	6,624	NA	-
Source: RTI application reply by Udyog Bandhu