The Uttar Pradesh Government, led by Chief Minister Yogi Adityanath, aims to transform the state into a $1 trillion economy by 2027, a fourfold increase from the current level.
The focus of the study is on breaking down these economic goals to the district level, with a particular emphasis on Meerut, one of the top industrialized districts in the state. The study explores investment opportunities, ground-level policies, institutional roles, and growth factors in the context of Uttar Pradesh, with a focus on Meerut.
Six parameters are examined to assess the feasibility of achieving the economic goals, including GSDP, workforce, institutional credit, capital expenditure, policy dynamics, and administrative effectiveness.
Uttar Pradesh, India's third-largest state economy, is striving to reach a one trillion-dollar GDP by 2027, with an estimated nominal GDP of Rs. 21.74 trillion in 2022-23. Agriculture plays a vital role, producing food grains like wheat, rice, and sugarcane. The state has seen rapid industrialization but faces challenges in reducing poverty rates. Infrastructure development is underway, including metro systems, road networks, and expressways. Employment trends indicate an increase in labor force participation but also higher unemployment rates. While Uttar Pradesh is committed to achieving Sustainable Development Goals, its overall performance is below par.
The economy of Meerut has grown at a rate of 9.4% in the last 9 years (2012-21). The current status of agriculture in Meerut reveals a unique situation within the state of Uttar Pradesh. While Uttar Pradesh is predominantly agrarian, with agriculture and allied activities accounting for nearly 26% of its GDP {higher than the national average), Meerut stands as an exception with a lower share of 19% in the sector.
The contribution of different segments of GDP of Meerut in 2020-21 is as follows: Agriculture & allied products 19%, Industry 36.6% and Services 44.4% with compound annual growth in last five years rate of 6.2, 7.4 and 11.7% respectively. Clearly, the contribution of Agriculture is shrinking and that of industry and services growing.
The report identifies a number of strengths and weaknesses of the economy of Meerut. For strengths, it is well-connected location, with easy access to Delhi and other major cities, abundant natural resources, including fertile land and water, A skilled workforce, A vibrant entrepreneurial culture, A strong focus on education and research.
Weaknesses: Poor infrastructure, particularly in terms of roads, sanitation, and water supply, High levels of pollution, Inefficient public administration, Lack of investment in the manufacturing sector.
The GSDP of Meerut need to reach US$ 30 billion by 2026-27, in line with the State perspective of a trillion-dollar GSDP. At a normal base line growth scenario of 13 per cent, the GSDP reaches barley US$ 20 billion. The required rate of growth for Meerut to reach US$ 30 billion is in excess of 30 per cent, assuming a moderately depreciating rupee.
The proposed interventions in the study based on secondary research and detailed consultations with stakeholders aim to boost the estimated GDP growth by specific percentages.
Firstly, an increase of 2.7% in GDP is expected through the ICOR intervention, contingent on the realization of committed investments of Rs. 10,000 crores for districts, with an emphasis on the role of political leadership and district administration.
Secondly, a 1% increase in GDP is projected through improvements in labor participation and institutional investment, driven by greater involvement of women, improved law and order, and skills training.
The third intervention, labor relocation, anticipates a 2% GDP increase through the migration of the workforce from agriculture to industry and services sectors, coupled with skills training.
Lastly, a 1% increase in GDP is envisioned through institutional improvement, focusing on enhancing the ease of doing business, reducing delays, minimizing multiple visits, and streamlining interactions with state and central agencies. These interventions hold potential for significant economic growth, provided that their respective caveats and conditions are effectively addressed and implemented.
To bestow Ease of Doing Business at ground the study posits to prioritize self-employed household enterprises by implementing the following measures: Regularizing and allowing work from home and residential areas with suitable caveats decided by an expert committee; Not charging commercial House Tax and commercial-level tariffs for electricity and water from people working from home, develop a policy for Street Vendors and allocate spaces for them.
o Based on consultations and analyzing the data of Udyog Bandhu- a government led grievance redressal mechanism, MDA and Municipal Corporations share a high share of grievances, allowed by Fire department followed by cost of litigation due to delay in justice.
o Municipal Corporation must act to address waterlogging and clogged drainage systems in urban and industrial areas to prevent diseases, traffic congestion, property damage, and economic disruptions which unnecessarily drags growth of District's economy.
o Meerut city has grown largely unplanned. The cost of seeking approvals or regularization being prohibitive, most old and new construction are irregular. Meerut Development Authority (MDA) has to evolve a transparent mechanism for pending cases for approvals and focus on facilitating employment rather than revenue generation. To address these issues, a committee comprising experts should be established, empowered with flexible rules to prioritize and resolve unauthorized constructions. The Master plan needs to be made dynamic to accommodate emerging needs allowing flexibility for industries to expand without fresh approvals and the associated pains. It also needs to proactive in dovetailing district projects with national projects to keep the district ahead in the game.
o The Industrial Infrastructure of the District urgently needs overhaul and a better system of management and up keep. The industry associations could be vested with responsibility for maintenance drawing from the best practices in other states such as Gujarat.
o Education: Consultations brought to fore an urgent need to align schools and colleges with the National Education Policy (NEP) 2020, emphasizing technical and life skills. A need for establishing a resource center to handhold schools for implementing NEP in secondary education is repeatedly emphasized. To successfully implement NEP, a District Vocation Fair could be organized by District administration through DIC inviting all school/ college students to visit annually.
o District Industry Center (DIC): A need for reimaging and revitalizing the DICs. A government backed agency is needed with private sector zeal to attract, aid, and sustain investment. Successful models such as 'District Invest Promotion Agency' (DIPA) from Odisha could be considered leveraging institutional mechanism of Udyog Bandhu.
o Law and Order: The study notes the direct correlation of Focus extent of women's participation in the labour force and GDP growth. Female participation is among the lowest in India. The participation rests on quality of law and order and better facilities to attract female labour force.
o Justice delivery: The study proposes to ensure speedier justice by increasing number of Courts' working days, enhancing court infrastructure, enabling digital functioning, and increasing the number of judges.
o Fire Department: The study suggests to balance pragmatism and safety in enforcing new Fire Licensing Policies for older industries like approving low-height constructions, narrower aisles, and common water tanks for smaller industries in clusters. Reintroduction of utility certificates for fire equipment is also propose
Agriculture: Despite this lower share, agriculture in Meerut supports 32% of its population engaged as cultivators or agricultural laborers. Crops dominate the agriculture sector in District, contributing to 61% of the total value added, followed by the livestock sector at 30%. The area under food crops, including sugarcane, represents over 85% of the gross sown area, with most of it being irrigated through tube wells.
Sharp depleting water levels- by an average of 91cm annually and flow of chemical residue of fertilizers galvanized Government for encouraging diversification of agriculture and adoption of natural farming. The response has been only lukewarm. The shift, however, requires awareness creation, capacity building, handholding and help in market linkages for natural farm products to reduce perceived risk of farmers.The agriculture university ought to start a slew of short and medium term result oriented courses Agro-ecology. Government must provide support for marketing linkages through institutions like NABARD on natural farming.
Industry: The study identifies more than 14 major industrial agglomerations or clusters in the district namely Sports Goods, Scissors Textile Weaving, Brass Band, Leather, Textiles, Handicrafts, Electronic Switchgear, Publishing & Printing, Gems & Jewellery, Food Processing, Power Loom, Auto Parts and Khadi and Textile Weavers. The district also houses six major Services agglomerations namely Construction Advisers & Contractors, Doctors & Health Clinics, Education, Professionals (CAs, Lawyers etc.), Tourist Aggregators and Street Hawkers/Eating Joints.
Almost all of the segments are well organized and have their representative associations. They also have a fair understanding of their potential growth trajectory. But their access to regulatory and promotional agencies is weak. They lack the heft to reach out to administration and relevant government officials to resolve their issues. A mechanism is also needed to handhold them access various schemes and programmes of the state and the central government. A Sui Generis DIPA model could be tasked to deliver on the objectives.
