The Coronavirus induced lockdown has severely hurt the economy of Uttar Pradesh, but the determination of the Yogi Adityanath government to make the state a one-trillion-dollar economy by FY 25 remains the same. In order to ensure that the path of a one-trillion-dollar economy is laid out as soon as possible, the government plans to rope in management consultancies to suggest the required reforms.
Outlining the job of the consultant, a UP government advertisement said: “Based on status and recent trends, (the consultant will have to) determine multipliers between sectoral growth and impact on the GSDP; and assign targets and how to achieve them for each sector towards a $1 trillion economy”.
Topmost global consultancy firms such as Boston Consulting Group (BCG) as well as India’s top management institute, IIM-Ahmedabad, have submitted bids for the project. Boston Consulting, Grant Thorton, Nangia and Co, Deloitte Touche Tohmatsu India and IIM-Ahmedabad are the 8 bidders who have come forward for ‘herculean task’.
The state is already attracting huge amounts of investment from national as well as international companies as it bagged the second position in the Ease of Doing Business ranking of Indian states.
Companies from the United States, the United Kingdom, Japan, Canada, Germany and South Korea have proposed investment worth 45,000 crore rupees which will create 1.35 lakh jobs in the state. The government is arranging land for these companies and many of them have already been allotted plots required to set up factories and offices.
“In 6 months, 326 plots have been allotted for investment projects worth Rs 6,700 crore. This has attracted investors from all over the world to UP,” said The Infrastructure & Industrial Development Commissioner (IIDC) Alok Tandon.
The Yogi government is very serious about reaching the target of one-trillion-dollar by 2025 and is ready to take all necessary steps to improve productivity of the state. The tender document of the UP government has said the “Herculean task (of reaching $1 trillion goal) demands some giant steps” to be taken by the state government to move forward,” and added, “it needs some well thought out and long-term strategies on a sustained basis and would also require organisational restructuring, focussed policies and rules for more effective governance, faster decision-making process and improved accountability”.
After the Coronavirus outbreak in China and its mishandling of the crisis leading to a pandemic, many countries are looking to move manufacturing units away from China. In fact, many countries that are arch-enemies of China but have manufacturing units in China, like Japan, are incentivizing companies to move out, and this presents a golden opportunity to India, especially the industrially backward states like UP, Bihar where labour cost is extremely low.
UP has the existing capacity to replace China as the ‘factory of the world’ with a population of 22 crores and a young demography. With the outbreak of Coronavirus and the anger towards China, the companies of developed nations that have manufacturing units in China are looking for other avenues.
The UP government has shown the most proactive approach in the last few weeks to attract these companies and this has resulted in ongoing talks with many foreign companies over shifting manufacturing units to the state, some of which have already pledged investment.
South Korean electronics majors agreed to set up manufacturing units in Uttar Pradesh and state officials held a webinar with 100 US firms like Adobe, Boston Scientific, and UPS to shift their units from Shanghai to Noida, which is already a known popular IT hub.
German footwear brand, Von Wellx, has decided to move its factory operations from China to Agra, Uttar Pradesh. The company has more than 10 crore customers in more than 80 countries.
UP is one of the most efficiently administered parts of the country and the ‘rule of law’ prevails in the state. Therefore, the industrialists have no qualms about over-investing in the state, which is not just being governed efficiently but the government is also providing various incentives for investment.
The Yogi government has been proactive in dealing with Coronavirus and has already set up committees to assess the financial and social impact of lockdown on 11 sectors- industry, construction, revenue, labour, education, agriculture, social welfare, rural development, urban affairs, water and handicapped welfare. The Yogi must be applauded for transforming the state from a nightmare for industrialists to heaven for law-abiding companies.