UP Assembly polls 2022: Why state’s ‘jobless growth’ decade will be a headache for new government

The results of elections in five Indian states will be declared March 10, 2022. But the one to watch out for will be Uttar Pradesh (UP), home to more than 200 million people. The state has seemingly registered growth in the past decade. But a closer look at official figures shows that the growth is ‘jobless’, something the new government must look into when it is formed.

The Gross State Domestic Product (GSDP) of Uttar Pradesh has doubled in 10 years. At constant prices (2011-12), it increased to Rs 1,092,623 crore in 2020-21, from Rs 724,050 crore in 2011-12, a 50 per cent rise. These figures are according to Reserve Bank of India estimates released November 2021.

But there is nothing to cheer about. Why? During the same period, the GSDP of 15 states increased by 52 to 118 per cent. Hence, on the basis of GSDP growth rate in a decade (2011-2021), UP ranks at 16th position.

In fact, the GSDP growth rate of Uttar Pradesh had slipped to its lowest in 2019-20. The GSDP growth shrank to 3.81 per cent in 2019-20, from 6.26 per cent in 2018-19. This is the lowest since 2012-13.

Between 2019-20 and 2020-21, the GSDP growth contracted to -6.36 per cent. 

Source: RBI 

UP’s overall rank according to state GSDP had been third for six financial years, from 2011-12 to 2016-17. It slipped to fourth spot from 2017-18 onwards. In 2020-21, the state placed third after Tamil Nadu and Karnataka.

Maharashtra has continued to rank first in the country in this regard since 2004-05.

 Source: RBI 

Trends over the decade indicate that the pace of economic growth is slow and is not sufficient if the state wants to achieve the goal of becoming a trillion-dollar economy.

The contribution of the manufacturing sector important for over all economic growth, decreased by over 10 per cent between 2013-14 and 2014-15 and between 2016-17 and 2017-18.

The sector’s contribution to the GSDP shrunk by 4.2 per cent between 2017-18 and 2020-21, according to the Handbook of Statistics on Indian States published by the RBI in November 2021.

Thus, while the pandemic can be considered a factor for the poor economic growth in 2020-21, the growth in the state was not as required, even before the pandemic (2019-20). 

Poor growth also had an impact on the rural and the urban unemployment rate. According to the RBI, unemployment rate in rural and urban Uttar Pradesh increased by 4.2 percentage points and 6.5 percentage points between 2011-12 and 2018-19.

If urban unemployment rate in Indian states / Union territories is considered, the state ranks at the eleventh position in 2018-19, according to RBI data.

RBI estimates on unemployment rate have been derived from the National Sample Survey Organisation Employment & Unemployment Survey Reports, NITI Aayog and Periodic Labour Force Survey (PLFS), NSO.

Thus, UP has registered a decade of jobless growth. Given that UP constitutes 16.96 per cent of India’s population, its growth is significant for the overall growth of the country and even the world.

The party that wins power must reinvent the growth roadmap and work strategically towards it.

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