Uttar Pradesh needs growth push to become $1 trillion economy: Finance Commission

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Published: October 23, 2019 1:44:58 AM

The state has an SDG Index value of 42, lower than the national average value of 57, and it ranks 29th among the states.

The state has an SDG Index value of 42, lower than the national average value of 57, and it ranks 29th among the states.

Uttar Pradesh must grow to its full capacity to become a $1-trillion economy and help India achieve a GDP size of $5 trillion, 15th Finance Commission chairman NK Singh said on Tuesday after meeting chief minister Yogi Adityanath.

“For development of UP, a new growth rate is needed. If UP continues to move at this (current) rate, it will not be able to become a $1-trillion economy,” Singh told reporters in Lucknow, while urging the state to also do more in health and education sectors. On the possibility of a package for the state from the finance commission, Singh said, “The team of the finance commission has toured 27 states, and there is not a single state which has not demanded a special package. What parameters will be used, how much weightage will be given and under which formula funds be divided between the Centre and states, are some of the challenges for the commission. So you have to wait for commission’s report.”

The state government has demanded a state-specific grant of Rs 1,02,138 crore. The biggest chunk of the pie, Rs 30,000 crore, has been sought for the power sector while Rs 10,000 crore demand is for drinking water for Bundelkhand and Vindhyanchal region. The state has sought Rs 3,000 crore for rural sanitation, Rs 3,900 crore for promotion of tourism and Rs 10,400 crore for construction of roads and bridges.

Singh, along with other members of the commission, was on a four-day visit to the state during which he met elected representatives of panchayat bodies, urban local bodies, trade and industry bodies and political parties.

While appreciating that the state had shown significant improvement in the Sustainable Development Goals, he said UP’s poverty had declined from 40.9 % in 2004-05 to 29.4% in 2011-12 and the GDP growth of Uttar Pradesh was higher than the national average.
“The GDP rate of the state achieved in last two years is higher than the national average. The state has done its financial operations in the right manner,” he said.

However, the commission raised concerns about state PSUs suffering increasing losses. “Of the 107 PSUs, accounts of 100 PSUs are in arrears. The losses of the working PSUs and corporations have increased from Rs 62,901 crore in 2012-13 to Rs 125,325 crore in 2017-18,” said a statement.

Despite significant investment made by the state government in power sector PSUs, their losses increased from Rs 11,829 crore in 2012-13 to Rs 18,415 crore in 2017-18, it said.
“In the implementation of UDAY scheme in discoms, the state has achieved 100% progress in feeder metering and rural feeder audit. However, the state’s performance is not satisfactory and is way below the targets for parameters like smart metering, AT&C losses and electricity to unconnected household. According to the input received from ministry of power, UP’s AT&C losses in 2018-19 are 24.64 as against the target of 19.36,” the note pointed out.

The commission also found the state slipping in the context of UN’s Sustainable Development Goals. The state has an SDG Index value of 42, lower than the national average value of 57, and it ranks 29th among the states.
“Though UP has shown significant improvement in the key outcomes of health and education, it still lags behind as compared to all India average and the state needs to make efforts to overcome this gap,” the commission said.

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