UP economy grew at less than 5 % in Yogi Raj, says a state govt report
This finding does not augur well for the state government as Chief Minister Yogi Adityanath has set an ambitious target of making Uttar Pradesh 1 Trillion dollar economy in the next five years
The recent report on the state of Uttar Pradesh economy released by the State Planning Institute (Economic and Statistics Division) does not paint a rosy picture of the state’s economy as it claims that the state’s economy has grown at less than 5 per cent of Gross State Domestic Product (GSDP) in last four and half years of Yogi Raj.
This finding does not augur well for the state government as Chief Minister Yogi Adityanath has set the ambitious target to take Uttar Pradesh to 1 Trillion dollar economy in the next five years.
At present, the nominal GDP of the state for the year 2020-21 is ₹ 17.05 lakh crore (US$240 billion).
There is no denying the fact that the COVID-19 pandemic has impacted Uttar Pradesh’s economy as the state’s Gross State Domestic Product (GSDP) has shrunk by 5.9 per cent in 2020-2021 but the worrying sign is that the state’s economy grew at less than 5 per cent in last four and half years' tenure of Yogi Government.
The revised data released for 2018-19 (revised provisional) 2019-20 (revised quick) and 2020-21 (revised advance) also indicate that the state’s economy grew at a lesser rate than expected.
The revised estimates of UP’s income that the State Planning Institute (Economics and Statistics Division) released last week show a systemic decline in the health of the state economy. The GSDP growth in 2017-18 was 4.9 per cent. In the fiscal 2018-19 and 2019-20, it remained at about 4.3 per cent only. As per these estimates, the rate of growth of the economy was less than 5 per cent during 2017-20 and (- 5.9 per cent) in the COVID-19 year 2020-21.
The advance estimates for 2020-21 (released in March 2021) had shown a contraction of about 6.4 per cent in the GSDP. The UP government can take solace in the fact that the Indian economy too contracted by 7.3 per cent in the fiscal year 2020-21, as per the GDP statistics released by the National Statistical Office (NSO) of the Central government on May 31, 2021.
These figures are a clear signal that the Uttar Pradesh government will have to mobilise additional resources to push the economy ahead. “If the Government wants to achieve the $1 Trillion mark the economy has to grow at the annual rate of 45 %, which is improbable,” Rajesh Shukla, an economist said.
The worrisome fact is that sectors like manufacturing registered negative rates of growth over the last four years. Its share in GSDP is also declining and is less than 15 per cent. For a state which is yearning for industrialisation, this is not a good sign.
On the contrary, the performance of the agriculture sector has been quite good. Even during the pandemic fiscal of 2020-21the agriculture sector has shown a positive growth of 2.7 per cent. Services or the tertiary sector has done well except in 2020-21 wherein it contracted by 7.9 per cent.
The data shows that UP’s GSDP (at current prices) is estimated to have reached ₹15,82,682 crore in 2018-19, ₹17,25,860 crore in 2019-20, and ₹17,39,114 crore in 2020-21. The state government had recently claimed that the GSDP has increased from ₹17,91,263 crore to ₹19,40,527 crore (revised estimates) on March 31, 2021.
The above facts should be a sobering reminder to the state government that a lot needs to be done to put Uttar Pradesh on the fast trajectory of growth. If it really wants to become a one trillion dollar economy, the state has to come up with a clear roadmap. The poor GSDP does not enthuse confidence that the state will be able to achieve the target within the stipulated timeline. It would be better that the state government goes back to the drawing board and revises its strategy.