In the last five years, the Yogi government has transformed the image of Uttar Pradesh. From being a corrupt, backward, lawless land to one known for instant justice, heaven for investors and improving social indicators, Uttar Pradesh has become new in the last few years. And this was reflected in the Yogi government being re-elected in the state.
With the Yogi government being re-elected, UP now aims to compete with Maharashtra– the most productive state in the country to become the $1 trillion economy by 2027. The Uttar Pradesh government has invited bids from consultants to make the state USD 1 trillion economy by 2027.
From 6th to 2nd largest economy.
UP is projected to be ₹ 21.74 lakh crore or about 285b dollars in 2021-2022. Therefore, the government is targeting a nearly fourfold increase by 2027, which is also when the next assembly election will be due
Outlining the outcome of the work, the RFP document states that the task requires “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”.
In FY 21, Uttar Pradesh overtook Tamil Nadu, Gujarat, and Maharashtra to become the second-largest state of the country in terms of Gross State Domestic Product (GSDP). As per the data from the Finance Department, UP’s GSDP for FY 21 was ₹19.48 lakh crore, more than Tamil Nadu’s ₹19.2 lakh crore, Karnataka’s ₹18.03 lakh crore, and Gujarat’s ₹17.4 lakh crore.
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. 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 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.
Setting up of World-class companies in UP
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.
Also read: A gentle reminder from CM YOGI.
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.
Yogi must be applauded for transforming the state from a nightmare for industrialists to heaven for law-abiding companies. And the results are already evident with the state overtaking the nearest rivals like TamilNadu, Karnataka, and Gujarat to become the second-largest economy of the country. Now the rivalry is between Uttar Pradesh and Maharashtra on which states will achieve the 1 trillion target first. In this race, Maharashtra has a head start but UP is making more efforts and showing willpower to run ahead.