Uttar Pradesh: A Rising Economic Powerhouse Poised for a USD 1 Trillion Economy Uttar Pradesh's Gross State Domestic Product (GSDP) has demonstrated impressive growth, increasing from INR 16.44 lakh crore in 2020-21 to over INR 25.47 lakh crore in 2023-24.
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Uttar Pradesh has emerged as a formidable economic powerhouse, playing a crucial role in driving India's economic growth. According to a press statement released by the industry body PHD Chamber of Commerce and Industry (PHDCCI), the state is on a strong trajectory to become a USD 1 trillion economy, buoyed by robust GDP growth, improvements in Ease of Doing Business (EoDB), and state-of-the-art infrastructure.
The recently released research report by PHDCCI, titled Uttar Pradesh – Marching Towards a USD 1 Trillion Economy, highlights the state's significant progress in economic and business development. Dr Ranjeet Mehta, Secretary General and CEO of PHDCCI, underscored this potential during a meeting with Shri Abhishek Prakash, IAS, CEO of Invest UP and Secretary, Department of Infrastructure and Industry. "The economic and business environment in Uttar Pradesh improves each day, supported by a diverse industrial base, rich cultural heritage, and a growing consumer market," Dr Mehta said.
Economic Growth and Sectoral Contributions
Uttar Pradesh's Gross State Domestic Product (GSDP) has demonstrated impressive growth, increasing from INR 16.44 lakh crore in 2020-21 to over INR 25.47 lakh crore in 2023-24. Between 2017-18 and 2019-20, the state's economy expanded at an average rate of 9.6%. Despite disruptions caused by the COVID-19 pandemic, the state recorded a robust average growth rate of 15.7% from 2021-22 to 2023-24.
The state's economic success is driven by three key sectors: services, agriculture, and industry. The services sector, which includes tourism, real estate, finance, and hospitality, contributes 46.5% to the GSDP. Agriculture, employing two-thirds of the state's workforce, accounts for 27% of the economy, while the industrial sector contributes 26.5%. Reforms in agriculture, such as improved irrigation and farmer training, have boosted productivity and income levels, further strengthening the sector.
Industrial and Infrastructure Development
Uttar Pradesh has established itself as a major manufacturing hub, excelling in sectors such as electronics, textiles, automobiles, food processing, and pharmaceuticals. The state's strategic location and significant investments in logistics infrastructure have enhanced its competitiveness, making it an attractive destination for both domestic and international investors.
To improve EoDB, the state has implemented regulatory reforms, including a single-window clearance system, and has streamlined processes for starting businesses. Additionally, Uttar Pradesh's commitment to digitalisation and infrastructure development has created a conducive environment for industries and MSMEs. Nearly 90 lakh MSMEs operate in the state, contributing significantly to employment generation and manufacturing output.
Foreign Investments and Export Potential
Uttar Pradesh has seen a surge in Foreign Direct Investment (FDI), with cumulative inflows of USD 1.68 billion between October 2019 and June 2024. The state ranks 10th in India for FDI, with key investments in IT, textiles, electric vehicles, and logistics. Exports, especially in handicrafts, form another crucial growth driver, connecting the state to global supply chains.
The Road Ahead
As Uttar Pradesh continues its journey towards a USD 1 trillion economy, sustained investments in infrastructure, technology, and skill development will be vital. Public-Private Partnerships (PPPs) and a focus on high-growth sectors like IT, energy, and tourism will further bolster the state's economic landscape. With these strategies, Uttar Pradesh is poised to play a pivotal role in India's vision of becoming a developed nation by 2047.
