After the meeting of additional chief secretary (ACS) MSME, Navneet Sehgal and NSE senior manager Rakesh Kumar on Thursday (12 August) it was decided that new companies set up in Uttar Pradesh in the last few years would get priority in listing in the stock exchange (Bombay Stock Exchange and National Stock Exchange)
In the last few years, the number of traders in Uttar Pradesh has gone up exponentially with the third-largest number of retail traders in the country. The state has more than 55 lakh Demat accounts and yet the number of companies from Uttar Pradesh listed at the stock exchange is only 17.
“This is despite the fact that UP has a high number of electronics, IT, logistics, manufacturing, plastic, leather, agro, food products and garments companies, among others,” Sehgal said, adding that by getting listed on the stock exchange, the market capital of these companies would go up.
So far, the companies based in Maharashtra, Gujarat, Karnataka used to be at the forefront of stock market listing and most of the traders were also from these states. But with the democratization of trading through Aadhar and mobile-supported Demat accounts, the number of traders in the states like UP, which were underrepresented so far, is going up exponentially. And the new companies are being set up in the states like Uttar Pradesh, Madhya Pradesh as they rise up in the economic ladder.
So, the time has come for the democratization of stock market listing and the MSMSs based in states like Uttar Pradesh and Madhya Pradesh must be given priority.
In the last fiscal year, Uttar Pradesh overtook Tamil Nadu, Gujarat, and Maharashtra to become the second-largest state in the country in terms of Gross State Domestic Product (GSDP).
As per the data from the Finance Department, UP’s GSDP for the FY 21 was Rs 19.48 lakh crore, more than Tamil Nadu’s Rs 19.2 lakh crore, Karnataka’s Rs 18.03 lakh crore, and Gujarat’s Rs 17.4 lakh crore.
Uttar Pradesh CM Yogi Adityanath said that the state has achieved this despite the Coronavirus pandemic under the guidance of Prime Minister Narendra Modi. Uttar Pradesh performed really well in managing the Coronavirus-induced pandemic and has emerged as a favorite destination for national as well as international investors.
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 states, which are fed up of China’s belligerent behaviour like Japan, are incentivizing companies to move their manufacturing units away, and this presents a golden opportunity to India, especially the industrially backward states like UP and Bihar where labour costs are extremely low.
Uttar Pradesh 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, companies from 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.
Yogi must be applauded for transforming the state from a nightmare for industrialists to now a heaven for law-abiding companies. And the results are already evident with the state overtaking its nearest state rivals like Tamil Nadu, Karnataka, and Gujarat to become the second-largest economy of the country. And, very soon, Uttar Pradesh-based companies would be rocking the stock markets and capitalizing on the bull run.