Pvt trillions drop in ocean poor, jobless drain up

Investment is pouring in the largest state of Uttar Pradesh. The figures are mind boggling. In run up to the Global Investors Summit, begins on Feb 10, the state claims receiving Rs 1.68 lakh crore through Nivesh Sarathi portal.
This is in addition to Rs 1.88 lakh supposed to have poured in between 2018 and 2021. MoUs worth Rs Rs 1.25 lakh crore more are reported to have been signed by the Yogi Adityanath government bid to mop up Rs 10 lakh crore. Yes, Yogi is helping Prime Minister Narendra Modi in building up a $5 trillion economy by making UP itself a $ 1 trillion one. It will create 5.5 lakh jobs, UP claims.
But kharif losses and high poverty cause drain on state finances. The Yogi government is on a spree to show case its efforts. The political show Bharat Jodo Yatra of Congress leader Rahul Gandhi has been harping that jobs are fewer and the country must have more avenues for youth’s progress.
Most top industries have reportedly made a beeline but no detail of investment is available from the Adani group. The group after rally in its shares for two days has again been losing at the bourse. Last year, Adani pledged over Rs 700 billion. Not known if it is done. The mega shows have a pattern in UP since mid 1990s. Lots are promised. Even at the summit inauguration, Reliance chairman Mukesh Ambani promise Rs 75000 crore as part of his ongoing investments in the state. So did Kumar Mangalam Birla, who said the Birla Group had invested Rs 40,000 crore in the state and may put in Rs 25,000 crore more. Actual figures may vary.
In 2022-23, UP claims to have emerged as the third largest state with nominal GDP of Rs 20.48 lakh crore. How much is the actual money pouring in remains unclear. In 1990s, as chief minister then Mulayam Singh Yadav announced figures of Rs 54000 to Rs 57000 crore a number of times being invested through the MoUs. The real figures were always far less.
On the job scenario, UP has been lagging. Unemployment moved up from 2.1percent in July 2017 to 21.5 percent in April 2020, at the peak of covid19 pandemonium, according to a survey conducted by the Centre for Monitoring Indian Economy (CMIE). Now it has come down to 4.33 percent after fluctuating during January- December 2022. The figures show a gradual rise despite state government steps. It has come out with a new MSME policy after a large number suffered heavily since 2019.
Small businesses have been hit disproportionately hard by the continuing power crisis, with several having to shut operations during outages, causing production losses, and others with power backup forced to bear increased costs during the second half of April, when cuts were more frequent and prolonged, say industry executives.“Power outages lead to loss of production opportunities and the usage of power backups nearly doubles the cost of power,” says Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small and Medium Enterprises (FISME). He says the cost of power soars to Rs12–13 per unit in case of power backups from the Rs 8 per unit generally charged by distribution companies is one of the highest. The GST also hit them.
The high fuel and power rates have adverse impact on the sustenance of the smaller units. As cost of production rises, they have to work on thin margins. It also affects employment potential as there is cut on manpower. Job creation might remain a problem.
For this purpose the state is trying to boost the real estate sector. Chief Minister Yogi Ayadityanth says that to promote the real estate sector, it has charted out plans to buy 43000 acres of land for Rs 7.3 trillion – robbing Peter to pay Paul. It deprives farmers of land and create new job seekers. The state is planning to build about 6.4 million new housing units. The state government, however, claims that 4.5 lakh jobs have been provided to youth in the last five years in the government sector, and many more in the private sector. It refutes the CMIE figures.
In UP, the number of unemployed persons – those without jobs but willing to work – has risen from about 40 lakh in January-April 2017 to nearly 56 lakh in May-August 2021, as per CMIE. There is also pressure on the rural and agriculture sector as the post-covid19 situation has hit them hard. Kharif production has also suffered. The government is keen on bridging the gap and is showcasing projects like rapid rail and metro though in most UP cities metro is running at loss with poor ridership. Now a section in the government admits that instead of high-investment metro they could have gone for trams.
The Jewar international airport project being built by the Tatas is yet another blockbuster. The massive takeover of land all over the state for toll roads, metro, airports is expected to yield political dividends in run up to the 2024 elections. Infra is draining state’s finances
The state has acute poverty. Its 37.79 percent of the population is extremely poor. Another 44.47 percent is malnourished. It is the highest in the country after Bihar and Jharkhand.
This is being reflected in growing demand of the people for MNREGA jobs. Due to lack of recovery in other states, they could not migrate. In many districts like Jhansi, Lalitpur in the arid Banda region, the demand has quadrupled and more are flocking with job. The district officials say that till a few months back there were about 8000 job seekers and now it has swelled to around 31000. It is as per the countrywide trend of rise by 20.9 percent. The demand has increased with the fall in farm and construction sector demand. This indicates a difficult economic scenario.
Despite private sector investment promises it may not be easy for the most populous state to maintain its finances. The state has public debt of 32.5 percent. With not much state enterprises left, depending on the private sector is its compulsion. Its police force lags in investigations due to lack of funds. Private investments may look good but can hardly support the functioning of the state.