Low industrial growth to goonda raj: Reality check deflates Yogi’s tall claims

The CM makes lofty claims about his government’s achievements in the last four years. The reality is different

Yogi Adityanath
Yogi talking about development for the first time, instead of harping on renovation of some temple or Hindu religious site, might appear as a welcome gesture. But upon closer examination, his claims turn out to be far from truth. 

On March 18, 2017, Yogi Adityanath was sworn in as the chief minister of Uttar Pradesh. On March 19, 2021, a bylined article in his name appeared in The Indian Express, in which he made unsubstantiated lofty claims about his government’s achievements in the last four years. As he enters his fifth, pre-election year, Adityanath also sets the tone for his return to power. Yogi talking about development for the first time, instead of harping on renovation of some temple or Hindu religious site, might appear as a welcome gesture. But upon closer examination, his claims turn out to be far from truth.

At the outset, Adityanath claims: “In the last four years, the State has made strides in meeting the aspirations of the people. UP has become the best business and investment destination in India and ranks second in terms of economy, playing the role of the growth engine for the country.” Let us do a reality check. UP ranks second indeed, but from the bottom. Among 33 major States and Union Territories of India, Uttar Pradesh ranks at 32nd place, the last but one position, just above Bihar, in terms of per capita NSDP. In four years of Adityanath’s rule, UP’s economy has been steadily declining and, according to the Statistical Appendix presented as part of the 2020–21 Economic Survey of the Union Government, even before the full impact of the pandemic struck, the growth rate of net state domestic product of UP (NSDP) had slipped by half to 7.5 per cent in 2019–20 from 14.8 per cent in 2018–19.

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Adityanath pats himself on the back. “It was not an easy task to rise to number two in the national ranking of ‘Ease of Doing Business’ within four years, but we did it.” Ironically, the day after Adityanath wrote this, the ease of doing business index among states for the latest year, 2021, was published by the World Bank and the Department of Industrial Policy and Promotion (DIPP). Andhra Pradesh stood first. The next four ranks were held by Telangana, Haryana, Jharkhand and Gujarat. UP did not figure in the top five, but ranked 12th among the states.

Adityanath can make tall claims, but let us look at how UP’s industrial scenario compares with that of other industrially developed states. In 2019–20, in terms of total industrial employment, UP with an employment figure of 10,70,841 ranked fourth in India after Tamil Nadu (25,23,483), Maharashtra (20,07,794), Gujarat (18,26,748). In 2019–20, in terms of total number of factories, UP with 15,830 factories ranked fourth after Tamil Nadu (37,787), Gujarat (26,586) and Maharashtra (26,393). In 2019–20, in terms of total industrial investment, Uttar Pradesh with 2,16,929 crore ranked fifth after Gujarat (8,63,140 crore), Maharashtra (5,37,251 crore), Tamil Nadu (4,04,481 crore), Karnataka (2,68,573 crore).

Adityanath claims that his government gave 40 lakh houses to the houseless, provided electricity connection to 1.38 crore households and work is underway to provide safe drinking water to every household under the Jal Jeevan Mission. But people got houses under the Pradhan Mantri Awas Yojana and the new electricity connections were provided under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana – ‘Saubhagya’ – a new scheme launched by the prime minister on September. 25, 2017, for which funds came from the Centre. Jal Jeevan Mission is also a central scheme. But Adityanath claims credit!

Every claim of Adityanath can be refuted point-by-point. Let us not waste time on nitpicking but turn the spotlight on real developmental challenges in UP. Why is the industrial scenario so bleak in UP? To cite an example, leaving aside J&K, UP has the maximum potential for the development of the tourist economy in the country. But Adityanath is only fond of changing the names of pilgrimage centres that denote their Islamic/Moghul legacy — like changing the name of Allahabad as Prayag Raj. But strangely enough, tourists cannot find a good hotel to stay in Prayag Raj or in many such towns of tourist attraction, except perhaps in Agra and Varanasi. The reason is simple. Gangsters—followers of local MLAs or MPs or notorious bahubalis or goons—occupy the rooms and eat in these hotels for days together but never pay. Even top police officials and civil administration officials convert these hotels to free guesthouses for their friends and families. Every industrialist and every trader here has to pay hafta to at least seven or eight rival gangs associated with four different parties and two-three layers of government officials. Despite all the claims of Adityanath about restoring the rule of law, rent-seeking is still rampant. If the rate of rent and extortion is more than the normal rate of profit, how can businesses survive?

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Such backwardness is starkly reflected in the low lending ratio by banks. In September 2020, UP had the highest number of bank branches in the country at 17,648. Together they collected 12.03 lakh crore worth of deposits from the public but their total lending worked out to a mere 4.82 lakh crore. The respective figures for Tamil Nadu were 9.54 lakh crore and 9.85 lakh crore. This shows that the capital generated in UP — including among the agricultural rich in the fertile Gangetic irrigated basin — is drained out of the state and is not fuelling growth of business activity in the state. The above-rent seeking climate is the main culprit.

The second major reason is drain of talents from the state. The paucity of talent is so acute that no major IT industry or other high-tech industries can come up here. Talent depletion has become a vicious cycle. Only those who can pay a minimum of 15–25 lakh bribe can hope to become a college teacher, be it a private one or a government college. With such “teachers”, one can well imagine the quality of education. Institutions offering quality professional education like Kanpur IIT or the BHU have become self-cocooned islands insular from the state. Unable to fit into the degenerate institutional milieu of the state, all talented people run out at the first opportunity and never dare to return to the uncivilised jungle raj, except for brief visits to spend a couple of weeks with their families and friends.

In UP, education is reduced to private “coaching centres”, numbering around 8,000, which fleece around 8,000–20,000 per subject per month from an estimated 50–60 lakh students. It is sad to see tens of thousands of young people claiming to prepare for IIT and IAS though none of them can speak a single sentence in English. But they are obsessed with “service” jobs and try to get one by hook or by crook. Adityanath claims that he started the Mukhyamantri Abhyudaya Yojana in February this year to give free coaching to students for competitive exams to discourage their going to coaching centres like Kota, Rajasthan. But he has started only 18 centres in divisional headquarters. Only when he offered to give a free electronic notebook to those joining the online coaching, about 10 lakh students registered. Despite costly private coaching, students don’t get IIT-JEE rank and end up in private engineering colleges collecting huge fees, only to end up as unemployable.

In his article, Adityanath claims that under the Mukhyamantri Yuva Swarozgar Yojana, his government is providing self-employment assistance up to 25 lakh to unemployed youth. In the UP budget for 2021–22, however, only a measly amount of 100 crore has been provided for this scheme. Even if this entire money is spent, only 400 youth would get this loan! But there are 35 lakh educated unemployed youth registered in employment exchanges in UP. The number would have been double if many had not migrated to other states, seeking jobs.

Adityanath has to overhaul the social economy of UP far more drastically to claim any success.

(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not reflect the views of The Federal.)

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