INCREASING ECONOMIC ACTIVITY
Liveinvestments attracted by Uttarakhand grew at a Compounded Annual Growth Rate (CAGR) of 14.5 per cent between FY12 and FY17 which is almost three times of the national average CAGR of 4.8 per cent clocked during this period, according to the study titled 'Uttarakhand: Economic Growth & Investment Performance Analysis' , prepared by ASSOCHAM's Economic Research Bureau (AERB). Non-financial services accounted for over half of the total live investments attracted by Uttarakhand as of FY17 with electricity sector acquiring over 46 per cent share in this regard.
Apex industry body, ASSOCHAM urged the government of Uttarakhand to urgently set up a special 'investment monitoring task force,' to ensure timely and effective implementation of live investment projects worth over Rs Two Lakh Crore attracted by the state from global and domestic private and public sources as of FY17 to create around 30,000 direct jobs in next five years.
"Speeding up implementation of projects through target setting must be the mandate and the government should immediately constitute committee including senior ministers and bureaucrats to oversee pace of projects' implementation and address environmental, land acquisition and other related issues pro actively to balance interests of all stakeholders", said Mr. D. S. Rawat, Secretary General, ASSOCHAM, while addressing a press conference in Dehradun on November 25, 2017.
"State should accord more importance to implementing investment intentions, as, even if about half of these get implemented it would help create thousands of direct and indirect jobs across the state during the course of next five years", said Mr. Rawat.
"The government must focus on up-skilling its people thereby making them more employable as that would help deal with challenges of growing migration of people to greener pastures in search of jobs and will also help in attracting investors by portraying abundant skilled workforce availability," he added.
He further stated that state's future success also lies in unlocking potential of abundant natural resources but going ahead it will have to deal with factors like land scarcity, growing man-animal conflicts, physical connectivity and others.
As of FYI7, 151 projects worth over Rs one lakh crore are under different stages of implementation in Uttarakhand. "While under implementation rate of projects has been declining sharply since FY14 and touched lowest level of 32 per cent in FYI6, which is a positive sign, it however again crossed 58 per cent mark in FY17 probably due to it being an election year."
However, all-India average under implementation rate of projects has remained constant at about 54 per cent since FYI2. Sector-wise, non-financial services account for over 72 per cent share in "projects that are under-implementation, followed by electricity (26 per cent).
"A higher underimplementation rate implies that most of the projects or outstanding investments are under process and are yet not
The Uttarakhand government must focus on upskilling its people thereby making them more employable as that would deal with challenges of growing migration of people to green gestures in search of jobs
completed. Therefore a higher under implementation rate does not augur well as actual benefits of an investment are only derived upon completion," said Mr. Rawat.
"Projects with huge investments that are under different stages of implementation have been a major concern for policymakers across India as g9vernments both at the centre and the states have been taking various initiatives to reduce pendency in such investment projects both in terms of numbers and values," he added.
Uttarakhand's Economic Scenario
So far as economic performance of Uttarakhand is concerned, its economy had recorded a CAGR of 7.1 per cent between FY12 and FY17 and remained ahead of national economic average CAGR of 6.9 per cent clocked during the same period.
Though agriculture and allied activities is the mainstay of over 51 per cent of state's total workforce as per Census 2011, the sector's contribution to state's economy recorded a decline of about three per cent i.e. from 12.3per cent in FY12to 8.9 per cent in FY17.
There is also not much difference in terms of agriculture sector's growth pattern in past five years as it remained at about two per cent.
As such, the Chamber has time and again suggested the government authorities to float a state-specific separate hill farming policy. "Low level of land holdings together with poor crop productivity are the grave twin challenges being faced by agriculture sector in Uttarakhand; thus priority must be given to further developing irrigation infrastructure besides, production of local and traditional hill crops must be promoted and farmers must also be given adequate cover in terms of welfare schemes."
Apart from this, adequate technical and financial support for water conservation should also be extended to farmers and steps should be taken to encourage improved agronomic practices for higher farm productivity, better soil treatment, increased water holding capacity, judicious use of chemicals and enhanced soil carbon storage.
Though the contribution of industrial sectorin Uttarakhand' s economy has not improved much as it remained at about 52 per cent during both FY12 and FY17, the state has topped in terms industrial sector growth thereby clocking a CAGR of 7.3 per cent during aforementioned period. It also surpassed allIndia industrial sector growth of 5.9 per cent registered during this period.
Promotion of food processing industries, bolstering sectorspecific infrastructure like warehouses, cold storages and others to avoid spoilage of perishable products will further strengthen the industrial scenario of Uttarakhand, suggested the ASSOCHAMpaper.
The contribution of services sector to Uttarakhand's economy has improved significantly from 33.9 per cent in FY12to 36.5 per cent in FY17.Besides, it has also grown at a CAGRof 8.6per cent between FY12 and FY17which is equivalent to the national average CAGRin this regard.
Terming the state's performance in services sector as encouraging,' ASSOCHAM I study has suggested the policymakers to aim for expanding sectors like tourism and information technology; both hold massive potential to generate additional economic activity and employment opportunities in Uttarakhand. Sothe government should make all efforts to exploit its resources to the best capacity.
I I~ssingthe audience at a release of study titled, Inalysis, in Dehradun. r