Bimaru, a booming state: UP will now have a problem

Uttar PradeshOnce considered a bimaru (sick) state with low industrialization, the state is on its way to becoming a booming state. As it strives to become an electronics hub, the state will now get a Semiconductor plant Also. The joint venture between Taiwan Foxconn and IT services major HCL has been allotted around thirty acres of land, near the upcoming Jewar airport in Noida, Uttar Pradesh, to set up a semiconductor outsourced assembly and testing (OSAT) unit, ET reported based on information from sources.

Uttar Pradesh has received proposals for projects totalling around Rs 40,038 crore under its new policy to incentivise semiconductor manufacturing and attract global investments to the state, the government said in a statement in July. Among several proposals, it has so far considered the Hiranandani Group’s Tarq Semiconductor plant.

In fact, Uttar Pradesh has emerged as the only state in northern India to actively compete for high-tech industrial projects, which have traditionally been the mainstay of southern Indian states. Uttar Pradesh has followed in the footsteps of Karnataka, Tamil Nadu and Gujarat in having a dedicated semiconductor policy.

Uttar Pradesh’s ambitious industrialisation project

Foxconn-HCL chip plant It is one of several recent investment proposals. In June, a Japanese conglomerate of 463 companies expressed interest in developing a next-generation industrial park in the state. Marubeni Corporation, the Tokyo-based company, has been in the industrial park business in Asia since the 1980s and has a presence in 65 countries. It has developed industrial parks in Dalian (China), Cavite (Philippines) and Lat Krabang (Thailand). Uttar Pradesh is developing 30 industrial corridors at 30 locations in 29 districts.Indian Oil and Natural Gas Corporation (ONGC) is considering setting up a multi-billion-dollar petrochemical and refinery project in the state, ET reported recently. The 9 million tonne-a-year project could cost over $8.3 billion. Escorts Kubota is eyeing land in UP for a Rs 4,500 crore manufacturing plant after shifting from Rajastha.

In another recent development, Noida International Airport Ltd (NIAL) is planning to set up a maintenance, repair and overhaul (MRO) facility adjacent to the upcoming Noida International Airport at Jewar. The land acquisition process is currently underway. NIAL officials said that they are in talks with some of the world’s leading aircraft manufacturers to collaborate on this initiative.

These are some of the recent big projects being undertaken in Uttar Pradesh. Though the state’s industrial sector is still in its infancy, it has established itself as a major electronics hub. Chief Minister Yogi Adityanath recently said that the state’s efforts to develop the electronics industry are yielding results. He said that Uttar Pradesh’s mobile phone manufacturing units are now producing over 55 per cent of mobile phones and over 50 per cent of mobile components, which are manufactured in India. The state is also emerging as a data hub.

The state government, which has showcased industrialisation as one of its key achievements in the last seven years, organised the Groundbreaking Ceremony (GBC) in February to ensure that projects worth Rs 10.15 lakh crore could be launched before the model code of conduct was laid down for the Lok Sabha elections. The GBC is just the tip of the iceberg as far as the pending investment proposals with the government in the form of MoUs worth Rs 38.5 lakh crore that it received during the Global Investors Summit (GIS) 2023 are concerned. Recent investments in the state include Samsung’s mobile phone manufacturing unit in Noida, which is the world’s largest, a data centre being set up by the Hiranandani Group, a bottling plant in Sandila by the state government, and a new mobile phone manufacturing unit in the state. Varun Drinksa manufacturing plant with an investment of Rs 1,100 crore by AB Mauri Group, a grinding plant by ACC Ltd for Rs 600 crore and an investment of Rs 1,000 crore Berger PaintingsAdani Group’s ammunition manufacturing complex in Kanpur, an automobile plant started by Ashok Leylanda factory of robotics company Adverb Technology in Noida, a Unilever Hindustan plant and one JK cement in Hamirpur, a Coca-Cola bottling plant in Amethi and a PepsiCo potato chips factory in Mathura.

The Government has signed more than 150 Defense manufacturing Deals worth Rs 25,000 crore (approximately $3 billion). The defence projects are strategically located within the Uttar Pradesh Defence Industrial Corridor (UPDIC), which spans six nodes in Lucknow, Kanpur, Jhansi, Aligarh, Chitrakoot and Agra districts. The Adani Group commissioned its ammunition manufacturing plant in February, with an investment of Rs 1,500 crore.

Nearly half of the total Rs 4.28 lakh crore worth of investments pledged at the first Investors Summit held by the Yogi government in 2018 have been translated into investment proposals in the last five years, generating 3.24 lakh jobs, the government said.

Uttar Pradesh has jumped from 11th to second place in ease of doing business and is now second only to Maharashtra in starting new businesses, according to a latest report. Driven by one district and one product, its exports have increased by more than 100% in the last seven years.

Uttar Pradesh’s economic target is $1 trillion

Uttar Pradesh’s gross state domestic product (GDP) rose to Rs 25.48 lakh crore in 2023-24, up from Rs 22.58 lakh crore in 2022-23. The government has set an ambitious target of becoming a trillion-dollar economy by 2027-28. The state needs an overall investment of $1.3-1.5 trillion (Rs 105-120 lakh crore). In this regard, public investment is expected to be between Rs 12-16 lakh crore, while private investment could range between Rs 93-108 lakh crore, according to an official estimate.

The government is adopting the public-private partnership (PPP) model in various sectors to achieve the objective. Sector-wise, PPP projects worth about Rs 2 trillion have been completed, are underway or are about to commence.

In July, the government approved a bill called Uttar Pradesh Nodal Investment Region for Manufacturing Area (Construction) (NIRMAN)-2024 to create Special Investment Regions (SIRs). At least four such SIRs will be created, which will be in the four geographical areas of the state.

Uttar Pradesh has traditionally had a low level of human development, something that is now changing. A report by Niti Aayog says that 3.43 million people have escaped poverty in the state in the last five years alone. It notes that from 37.68% in 2015-16, the number of multidimensionally poor in Uttar Pradesh has come down to 22.95% in 2019-21. In 2022-23, this figure has come down to 17.40%. Another big change that has facilitated investment in the state is the control of organised crime.