The Covid-19 pandemic put the brakes on India’s dream of becoming a $5 trillion economy by 2024–25. It now aspires to achieve it by 2026–27. But, there is one state that has taken it upon itself to become a $1 trillion economy by 2027.
 
Yogi Adityanath-led Uttar Pradesh recently signed a memorandum of understanding (MoU) with Deloitte India, appointing it as a consultant for spearheading the state towards its mission. “Now is the time of Uttar Pradesh, and taking full advantage of its potential, the state will become the most important base for multi-dimensional development of the country,” the chief minister said after signing the MoU.

Deloitte India now has the task of formulating an action plan for the future after conducting thorough studies across sectors. Its plan will be reviewed by two committees, one headed by the state’s chief secretary and the other by a group of ministers.

A string of promises was made before and after the chief minister and his party returned to power in the state for the second time with a thumping majority in 2022. While Uttar Pradesh has made progress on the historically infamous law and order situation, it is still among the three most poor states in the country with a per capita income that is not even half of the country’s average.

Uttar Pradesh’s road to $1 trillion will also chart Chief Minister Adityanath’s political trajectory in the next few years by becoming a blueprint of how the chief minister, often seen as a controversial figure, effectively turns around one of the BIMARU states’ fortunes. A legacy built on development could catapult Adityanath into a national role for his party.

The Number Game 

Ahead of the assembly election, the Uttar Pradesh government had said that the state had become India’s second largest economy. It had to later revise its claim after the Reserve Bank of India (RBI) data showed otherwise. 

According to the RBI and the National Statistical Office, Uttar Pradesh is presently the third largest economy after Maharashtra and Tamil Nadu. For 2019–20, the state’s gross state domestic product (GSDP) at current prices stood at Rs 16.87 lakh crore against Tamil Nadu’s Rs 17.97 lakh crore and leader Maharashtra’s Rs 28.18 lakh crore. Uttar Pradesh’s own revised estimate for 2019–20 had pegged the start’s GSDP at Rs 16.89 lakh crore. 

In 2016–17, the state’s GSDP was at Rs 12.89 lakh crore, which went up to Rs 14.16 lakh crore in the next financial year.

For 2020–2021, its GSDP was initially estimated to be Rs 17.91 lakh crore, which was later revised to Rs 19.40 lakh crore. The state government’s Directorate of Economic and Statistics pegged the GSDP for 2021–2022 at about Rs 19.10 lakh crore in its advance estimates. For 2022–23, its nominal GSDP is estimated to touch Rs 20.48 lakh crore. To achieve the 2027 target, the state will have to get to a GSDP of around Rs 80 lakh crore, the rupee equivalent of $1 trillion as per the current exchange rate, in the next five years. This is a giant leap of about 400% from the advanced estimates of 2022–23. This, in turn, means that the state will have to grow at an annualised rate of 31%, which is a significant jump from the current growth rate of about 19%.

While experts do not rule it out, it will be a significant challenge even for the most formidable of policymakers to surmount. For example, as per the Niti Aayog’s multidimensional poverty index (MPI) baseline report based on the National Family Health Survey–4 (2015-16), Uttar Pradesh is among the three most poor states of India. With 37.79% of its population being multidimensionally poor, Uttar Pradesh is just behind Jharkhand (42.16%) and Bihar (51.91%).   

Incentivising Economic Sectors

Uttar Pradesh’s ambitious target of becoming a $1 trillion economy hinges primarily on the success of the Centre’s production-linked incentives scheme. Noida is being projected as the venue of choice for developing an electronics industry. Samsung recently opened its largest manufacturing unit in Noida. The state government announced last year that it would develop an electronics park for the electronic devices and accessories industry along the Yamuna Expressway near Noida. To challenge China’s dominance in the toy market, Noida is setting up a toy manufacturing hub. The state government is also trying to revive Kanpur’s pull as a major industrial belt, as it has always had a thriving leather industry. The chief minister wants to develop a major leather hub in Kanpur spread across 235 acres.