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Chapter V - Strategy for Development- Going Beyond the Basics

1. While the most recent data in respect of Meerut is hardly available, other than for the GDP numbers, an assessment has been made of future growth based on assumptions relating to the sources of growth in an economy. Quantity and quality of inputs and factor productivity are the sources of growth. A Study by Reserve Bank of India has revealed that oif the overall inflation adjusted growth of 6.1 percent during 1981-2017, labour and capital inputs had contributed to 4.7 per cent growth (3.4 per cent by capital), another 0.46 per cent was contributed by capital and labour quality and only 0.96 per cent came from total factor productivity.

2. But growth in itself a dynamic concept and there are leakages and slacks which, if covered properly, an accelerated growth could be achieved. There has been both direct and disguised unemployment. Labour Force participation is low and has so far been sticky. However, a reasonable part of this low participation of labour force as job seekers may have to do with poor quality jobs, these being less remunerative compared to the transaction costs involved in relocating, social structure or lack of proper facilities of child care and other amenities for female labour force. There is considerable scope for new capital being injected and the Investment Summit of Uttar Pradesh is indicative of investor interests. There is possibility of relocating already employed persons occupationally through proper skilling. The data of Uttar Pradesh as in Chapter II clearly indicate that value added per person engaged in different sectors vary considerably. While a person engaged in agriculture gets about 50 per cent of the average of all sectors, it is goes up to 23 times in professional services. Even in construction and communications which are low skills, the value added per person engaged is more than 10 times the value added in agriculture. While the quality of labour could be improved through skills, quality or productivity of capital could also be improved through better technology. There could be institutional settings which could reduce transaction cost of business and industry, through Single Window, Ease of Doing Business, appropriate factoring services, inter firm learning and others.

3. Our assessment indicates that it is possible to raise labour force participation by 5-10 percentage points. In 2021-22, labour force participation rate across the States had varied from 27 per cent for Bihar (LFPR of Uttar Pradesh was 36 per cent) to 58 per cent for Sikkim and Himachal Pradesh. The female participation in labour force in Uttar Pradesh at 18.7 per cent was just about a third of Himachal Pradesh. Even among the educated persons, the LFPR for Diploma holders, graduates and above in Uttar Pradesh was around 60 per cent compared to 84 per cent in Himachal Pradesh. The Investment Summit of Uttar Pradesh and the discussions and presentation made in Meerut indicate additional investment commitment of Rs. 26,554 crores over next five years {Table 25). In addition, there has been a proposal for logistic park and additional infrastructure on Delhi-Mumbai Industrial Corridor in Meerut. Besides, the Government of Uttar Pradesh has unveiled an infrastructure development package and additional capital expenditure in Uttar Pradesh. Assuming that Meerut will get a proportionate share, an additional public investment of Rs. 10,000 crores could flow to Meerut in next five years.

Table 25 : Investment Intentions Indicated (Rs Crore)