Uttar Pradesh, the largest state by population in India has been part of the unenviable group of BIMARU (sick) states of India for a long time. Infamous for the lack of infrastructure that kept industries away from the state for decades, there is a new pitch by the incumbent government that seeks to change the image of the north-Indian state that was once famous for dacoits and crime. In an interview with Outlook Business, Mayur Maheshwari, the CEO of Uttar Pradesh State Industrial Development Authority (UPSIDA) makes a strong pitch for development and suggests that Uttar Pradesh is set to become the first choice of investors in the coming years.
States from the South and West have traditionally bagged investments, both foreign and domestic. But Northern states are now aggressively competing against each other for attracting investments. Can Uttar Pradesh emerge as the winner?
Taking a cue from cooperative federalism, which is aligned with the vision of our Chief Minister, Shri Yogi Adityanath to make Uttar Pradesh a major contributor to the Centre's goal of a $5-trillion economy, we have now moved to a stage where our state happens to be the leader in providing investment opportunity to companies by providing them a robust ecosystem of expressways, airways, and best-in-class facilities for connectivity.
We are providing several incentives, including fast-track clearances, plug-and-play infrastructure, and also last-mile facilitation.
The result is visible as UP has managed to get more than Rs 12,000 crores worth of investments in the last two years. Also, a total of around $2 billion has been invested in 42 districts of the state and it is not located in just one corner of the state.
For example, mega investments have come up in areas like Bundelkhand and Purvanchal. It has stopped migration and brought value to the local people there and UP has therefore definitely taken a lead in all these aspects.
Before 2017, if you look at the data, UP was considered a BIMARU state. But it has its inherent advantages, like size and demography. What do you think has been the biggest turning point for the state?
The biggest turning point has been the change in the mindset of the government. Once an investor comes to us now, we think that it is our job to provide what they want. The government’s role has moved from a regulatory mindset to a facilitator’s mindset. For example, PepsiCo’s investment in Mathura, Kosi Kalan was put in motion very fast. Similarly, Varun Beverages is coming up with factories in Chitrakoot and we gave them land in 10 days. This is how you give a red carpet welcome to the investors, backed by our Chief Minister's vision of making UP the number one state in the country. He has already given us a target of a trillion-dollar ($1 trillion) economy. So we are all geared up and moving in that direction. The second thing is the use of technology. Earlier what used to happen is that all departments used to work in silos. But now things are happening in parallel so that sequential clearances and sequential land allotments move simultaneously. These are major changes that an investor looks for before taking a decision of putting money.
So transparency, ease of doing business and upgradation of infrastructure. Are these the key elements to meeting the target of a $1 trillion economy?
If you provide adequate, appropriate, and investor-friendly infrastructure, the industries will come. UP’s success is a reflection of the improvements that were made in the infrastructure, be it in terms of providing common facilities making available land at affordable prices or providing them electricity at reasonable rates.
Investment Summits are happening all across the country. States are competing against each other. You have plans for international investor summits. What gives you the confidence to move towards an international summit?
The factors of production are already taken care of–land, labor, capital, and technology. The second part is of the human interface, where we handhold an investor. We have investments coming from 12 countries, and also from other states. We have signed around 780 MoUs with each of these investors, and we have nominated a nodal officer for each one of them. We hold frequent interactions and one-to-one discussions with them. I also have a CEO connect program. I frequently do this with the investors- small, big and medium.
You drew the blueprint and the roadmap to the $1 trillion economy mark. Could you run us through it a little bit?
In the roadmap to the trillion-dollar economy mark, we have identified sectors and we have more than twenty sector-specific policies which are catering to all types of investments that could be coming in.
Which are the top five priority sectors?
We don’t have top-five sector. Rather, we have focused sectors like IT, textiles, healthcare, food & beverages, along with agri-infrastructure. We have also tried to rope in the farmers into the value chain of the industrial ecosystem. We have also involved agritech start-ups. All of them have a superset of the technology bandwidth. Either through drones or through tie-ups with IITs or through tie-ups with various other institutions. We are just pulling them in a type of umbrella where all of them can be together with us on this journey.
I come to the question of land acquisition. It has remained one of the biggest problems in multiple other states and seen governments fall. How is it so successful in UP?
The major objective of any exercise is to take stakeholders along. All landowners have been very important stakeholders in our journey. Whatever we do, we do by building the process. We take the consent of the farmers before acquiring their lands and provide proper remunerative prices to them as per the law. Moreover, each one of them knows that if this land is used for industrial development, jobs will come in. After all these things are provided, the commitment and the credibility of the government is also very important factor.
My next question is about cluster manufacturing. You know, that's a model that China has perfected. However, when adopted this through the SEZ policy, it has not worked. UP so far has been successful. Why do you think development of industrial units based on the concept of cluster manufacturing will succeed in UP?
The fundamental reason for success is the bottom-up approach. And what we provide is infrastructure, ecosystem, and the forward and backward linkages.
From micro to macro we work on how the clusters should work in terms of their technology, and linkages. We also provide them access to the international markets and ensure that they get raw material at the most reasonable prices. So that is how it worked well for us. In UP, we have one district one product scheme.
A large number of industries in Uttar Pradesh which include leather, etc are very polluting. What is your approach to sustainability?
Our state works on ‘the polluter pays’ principle. In terms of providing common facilities, our objective is that what you discharge is what you should protect or recycle. Industries are required to treat whatever effluence they discharge at the source itself. For monitoring this, the state government has a pollution control board. The UP Jal Nigam and other departments are helping to provide CETPs or common effluent treatment plants and zero liquid discharge facilities. We have discharge from each industry on a regular basis. We also provide the right technology and the know-how to cut pollution.
