Assocham Bulletin - - FOCUS STATE -

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

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