[UPPSC-UP Special Syllabus Decoded] Investment in U P: Issues and Impact

Investment in Uttar Pradesh: Issues and Impact 

1. The Investment Landscape of UP ($1 Trillion Goal)

Trend: Shift from “MoU Signing” to “Ground Breaking Ceremonies (GBC)” and “Sector-Specific Policies.”

A. Investment Ecosystem

• Global Investors Summit (GIS) 2023: A watershed moment securing ₹33.50 Lakh Crore in investment proposals.
• Ground Breaking Ceremonies (GBC): Transitioning intent into reality.
  • GBC 4.0 (Feb 2024): Prime Minister launched 14,000+ projects worth ₹10 Lakh Crore.
  • GBC 5.0 (Planned Nov 2025): Targeting renewable energy and data center projects.
• Top Sectors: Renewable Energy, Electronics Manufacturing, Housing, and Hospitality.

B. New Policy Framework

• UP FDI Policy 2024:
  • Unique Feature: Offers “Front-End Land Subsidy” (up to 80%) for Fortune 500 companies investing >₹100 Crore.
  • Objective: Attracting global giants (e.g., Samsung, Microsoft).
• UP Semiconductor Policy 2024-Discussed later

2. Issues and Challenges in Investment

Trend: Critical analysis of “Regional Disparity” and “Land Acquisition.”

A. Regional Imbalance

• The Divide: Nearly 45-50% of total investments are concentrated in Western UP (Noida, Greater Noida, Yamuna Expressway) due to NCR proximity.
• Bundelkhand & Purvanchal: Despite the Defense Corridor, these regions struggle to attract high-tech service industries due to the “Human Capital Gap.”

B. Structural Bottlenecks

• Land Acquisition: High land cost in industrial clusters and litigation delays.
  • Solution: Land Pooling policies in New Noida and BIDA (Jhansi).
• Logistics Cost: As a landlocked state, freight costs are higher compared to coastal states (Gujarat/Maharashtra).
  • Mitigation: Eastern Dedicated Freight Corridor (EDFC) and Multi-Modal Terminal (Varanasi).

3. Impact of Investment

Trend: “Employment Elasticity” and “Socio-Economic Transformation.”

A. Economic Impact

• GSDP Surge: Consistent 12-14% nominal growth, positioning UP as the 2nd/3rd largest economy in India.
• Infrastructure Boom: Investments have funded the “Expressway Network” (13 Expressways) and 5 International Airports.
• MSME Integration: Large industries (Anchor Units) creating supply chain opportunities for local MSMEs (e.g., Tata Advanced Systems in Lucknow supporting small vendors).

B. Social & Employment Impact

• Job Creation: GBC 4.0 alone is projected to create 34 Lakh jobs.
• Skill Shift: Demand for new-age skills (Drone pilots, AI technicians) driving the upgrade of ITIs under Tata Technologies partnership.
• Reverse Migration: Industrial units in Gorakhpur and Azamgarh (e.g., PepsiCo plant) reducing reliance on migration to Mumbai/Delhi.

4. Current Affairs Linkages

A. Major Projects Grounded

• Semiconductors: Hiranandani Group (Tarq Semiconductors) filed an application to set up a unit in YEIDA (Jewar) under the new policy.
• Data Centers: Sify Technologies launched its AI-Hub Data Center in Lucknow , expanding the IT map beyond Noida.
• Defense: Adani Defence & Aerospace inaugurated South Asia’s largest ammunition complex in Kanpur (Feb 2024).

B. Global Capability Centers (GCC)

• UP GCC Policy 2024: Approved to attract MNCs to set up R&D hubs.
• Impact: Approvals granted to 15+ GCCs in Noida and Lucknow in 2025, shifting the focus from “Back Office” to “Innovation Hub.”