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COMMENT: Politics out of the way, it is over to economics for UP

Gaurav Choudhury
Chillicious News

In 1992, fragile conditions had prompted Bill Clinton’s campaign strategist James Carville to coin the phrase “It’s the economy, stupid”. In the days to come, it turned into Clinton’s signature slogan in the run-up to the US presidential polls.

A quarter century later that may well be relevant for Uttar Pradesh today where the BJP is set for a landslide victory riding on the wave of support for Prime Minister Narendra Modi.

For the new state government and policy makers, the real challenge, indeed would be to match the vast majority of those who still earn their keep from the farms but whose restive young children aspire to earn money and social honour.

Let us examine a few facts.

Between 2005 and 2015 Uttar Pradesh’s “real” or “inflation-adjusted” state gross domestic product grew at an average of 6.5 percent compared to the national average of 7.75 percent.

As any economist would point out calculations of GDP are about levels of aggregate income and the growth rates are a derived characteristic. Also, GDP is a quantitative metric, and does not say much about quality and standards of living.

It would be worthwhile to see where the average person in Uttar Pradesh earns compared to his or her peers in other states and comparing per capita incomes can be a good starting point.

In 2015, Uttar Pradesh’s per capita in current prices stood at Rs 40,373 compared to the all-India average of Rs 78,000. Despite the scorching annual GDP growth rates over the last 10 years, the average income of a person in Uttar Pradesh is still less than half of the average Indian.

Uttar Pradesh also compares poorly against its other BIMARU peer group states. The per capita income of Rajasthan was Rs 72,156 (in 2014-15), while a person living in Madhya Pradesh earned an average income of Rs 59,770 in 2014-15 UP also lags Chhattisgarh (per capita income of Rs 64,442 ) and Jharkhand (per capita income of Rs 52,147). UP’s per capita income is actually less than a third of the so-called “industrialised” states such as Gujarat and Maharashtra.

The statistics are telling, given the dominant narrative about how development and an industrial hub like Noida where tens of glitzy corporate towers can give a misleading impression.

Let us now look at a few qualitative markers.

According to the latest released Socio-Economic Caste Census (SECC) data, as of 2011 as much as 30.49 percent of UP’s rural households are landless who keep their kitchen burning as manual casual labourers..

Only 2.1 percent of UP’s total 26 million households actually run non-agricultural enterprises. Members of only 3.08 percent households have a salaried private sector job, 4.01 percent have a government job and 1.52 percent have salaried public sector job. Clearly, India’s most populous state has a long way to catch up.

At about 502 KWh, the per capita power consumption in UP is among the lowest, given that the national average is 1010 KWh. The political discourse of Uttar Pradesh remains rooted in abstract slogans, when India is seeking to attain a higher state of economic equilibrium.

Millions of youth in UP are joining the workforce every year. Spinning new jobs, therefore, is critical for the state’s long-term prospects. It is only through the right programmes to impact skills and creating appropriate jobs that the UP will be able to stand shoulder-to-shoulder with other states.

Greater investment, speedier project implementation, removing bureaucratic apathy are necessary conditions. Focus on the right policy mix where small and medium companies will neatly dovetail into mega projects of large corporations will trigger a cycle of investment, jobs, skill enhancement and consumer spending. UP carries the risk of being left behind even as rest of India grows at a rapid pace, if the new government doesn’t press the accelerator immediately.