Economic growth in UP sluggish though some sectors show promise
The Uttar Pradesh government has been proclaiming that per capita income in the state has doubled since the present regime came to power. However, a close look at the figures of state income prepared by the Division of Economics and Statistics, State Planning Institute, UP, available on their website reveals a different story altogether. The official estimates show that per capita income in UP at 2011-12 constant prices was Rs 40,847 in 2016-17. It went up to Rs 44,618 in 2019-20 and is likely to be only Rs 41,023 according to the advance estimates for 2020-21. Thus, over the four years of the present government, per capita income in UP has increased by less than half per cent against the claim of 100 per cent growth.
The gross state domestic product (GSDP) of UP at constant 2011-12 prices grew at a compound growth rate of only 1.95 per cent per annum during the last four years (2017-21). The advance estimates for 2020-21 indicate a decline of 6.36 per cent in the GSDP of UP as a result of the pandemic.
The analysis of growth rates at the sectoral level provides revealing insights into the economic performance of the UP economy. We confine our analysis to the period 2017-20 to eliminate the distortion caused by the pandemic. Agriculture, including forestry and fishing, shows a satisfactory growth rate of 3.05 per cent per annum during 2017-20. The livestock sector, however, shows a decline over the previous period.
Despite all the hype about investment in the manufacturing sector and ease of doing business, there has been a negative growth of 3.34 per cent in this sector during the present regime. Construction has done somewhat better growing at 5.35 per cent. The tertiary sector has been the mainstay of the state economy showing a growth rate of 7.83 per cent per annum during 2017-20. Within the tertiary sector, transport and communication and financial services show a sharp downward trend.
The state government is more proactive than in the past in trying to attract more investment in the state. The rank of Uttar Pradesh in “ease of doing business” has jumped to second among the states. Hopefully, these measures are likely to have an impact only in the long run. Meanwhile, economic growth in UP remains sluggish as the official data shows.
DESPITE ALL THE HYPE ABOUT INVESTMENT IN THE MANUFACTURING SECTOR AND EASE OF DOING BUSINESS, THERE HAS BEEN A NEGATIVE GROWTH OF 3.34% IN THIS SECTOR DURING THE PRESENT REGIME