Targetting to hit trillion-dollar economy mark by 2024, the Uttar Pradesh government has demanded a special package from the 15th Finance Commission, which is currently touring the state.
Commission chairman N K Singh today held a meeting with UP chief minister Yogi Adityanath and his senior cabinet colleagues to apprise the constitutional body of the roadmap drawn up by the state government to achieve its goals.
Talking to newspersons here this evening, Singh, replying to a Business Standard query, said the demand for special packages had emerged from all the 27 states, that the Commission had so far visited, and UP was no different.
The moot point is how to distribute the funds after taking into consideration their needs and arriving at a formula to devolve, he noted.
Singh said in the context of the $5 trillion economy target set by Prime Minister Narendra Modi for India, it was imperative for UP to transform. “A new impetus is needed to put the state on the track of faster economic development. In our meetings with the state officials, the government has shown the roadmap to achieve this ambitious target.”
He maintained it was not possible for UP to achieve the target of becoming a trillion-dollar economy at the current growth rate, although he lauded the Yogi Adityanath government for its fiscal prudence, especially in keeping the fiscal deficit under the mandated 3% of the Gross State Domestic Product (GSDP) under the Fiscal Responsibility and Budget Management (FRBM) Act.
“However, the target of trillion-dollar is not unachievable per se. If the state government can provide a momentum to growth and improve productivity, the economic growth could be doubled,” he added.
According to the UP Budget 2019-20 tabled in the state legislature in February 2019, UP’s GSDP is estimated to touch Rs 15.80 trillion (or nearly $230 billion at current exchange rate) by the end of this financial year.
Meanwhile, Singh flagged the sectors of health and education as faltering under the sustainable development goals, although he mentioned the state was slowly narrowing the gap vis-à-vis national average.
“Political stability and good governance in UP is giving positive results on the groups in several sectors,” he said adding the state ministers had also been proactive in giving details about their ministries and seeking support of the Commission.
However, Singh said the state needed to bring down its debt to GSDP ratio to around 25% in the next 2-3 years to further improve its fiscal parameters and attain a better financial leverage.
Yesterday, the Chairman had met with the representatives of UP urban local bodies (ULB), which also demanded more than Rs 2.8 trillion for improving their infrastructure during 2020-25. The funds have been demanded for sewerage, sanitation infrastructure etc apart from other heads.