[UPPSC-UP Special Syllabus Decoded] Overview of Economy of UP: Main features of economy and State Budgets, Infrastructure and importance of Physical Resources

Overview of Economy of UP:

1. Main Features of Economy of Uttar Pradesh

Trend: Shift from “Agrarian Economy” to “Service-led Growth” and the “$1 Trillion Economy” roadmap.

A. Macroeconomic Indicators

• GSDP Rank: UP has emerged as the 3rd largest economy in India (after Maharashtra and Tamil Nadu), contributing ~9.2% to the National GDP.
• Growth Rate: The state recorded a GSDP growth rate of ~12-13% (Nominal) in recent years, outperforming the national average.
• Sectoral Composition: (a) Primary Sector: 22%( supports ~59% workforce); (b) Secondary Sector: 28% (Rising); (c) Tertiary Sector: 50% (Service-led growth).

B. Structural Features

• Agrarian Base: Largest producer of food grains, milk, sugarcane, and potato; “Granary of India.”
• MSME Powerhouse: Highest number of MSMEs (90 Lakh+), driven by the One District One Product (ODOP) scheme.
• Regional Disparity: Economic divide between Western UP (Industrialized) vs. Eastern UP & Bundelkhand (Backward).

Current Affairs Linkage :

• $1 Trillion Roadmap: The state government, with Deloitte as a consultant, has identified 8 Growth Drivers, focusing on Manufacturing, Tourism (Spiritual Economy), and Urbanization.
• NITI Aayog Report : UP moved out of the “Aspirant” category in several SDG goals, highlighting a reduction in multi-dimensional poverty by 3.43 Crore people (highest in India).

2. State Budget Analysis:

Trend: “Capital Expenditure (Capex)” push and “Fiscal Discipline.”

A. Key Budget Highlights

• Budget Size: The budget size crossed ₹8.08 Lakh Crore (Historic High), reflecting the state’s growing fiscal capacity.
• Fiscal Discipline:
  • Fiscal Deficit: Targeted at ~2.97% of GSDP, well within the 3.5% limit set by the FRBM Act.
  • Revenue Surplus: The state continues to present a revenue-surplus budget, indicating strong tax collection (SGST & Excise).
• Capital Expenditure: Approx 22% of the budget is dedicated to Capex (Infrastructure creation), a significant jump from previous years.

B. Sectoral Allocations

• Infrastructure: Massive allocation for Ganga Expressway and Link Expressways.
• Youth & Employment: Funds for Tablet/Smartphone distribution (Swami Vivekananda Yojana) and Apprenticeship promotion.
• Agriculture: Focus on farm ponds (Khet Talab) and solar pumps (PM-KUSUM) to reduce input costs.

3. Infrastructure Development

Trend: “Expressway Pradesh” and “Multi-Modal Connectivity.”

A. Transport Infrastructure

• Expressways: UP has the largest network (13 operational/under-construction).
  • Ganga Expressway (594 km): Connecting Meerut to Prayagraj (Operational Phase by Mahakumbh 2025).
  • Bundelkhand Expressway: Transforming the arid region into a defense logistics hub.
• Air Connectivity: Only state with 5 International Airports (Lucknow, Varanasi, Kushinagar, Ayodhya, and upcoming Jewar).
• Metro Rail: Operational in Lucknow, Kanpur, Noida, Agra; approved for Gorakhpur (Metro Lite).

B. Industrial Infrastructure

• Bundelkhand Industrial Development Authority (BIDA): New industrial city in Jhansi (similar to NOIDA) to anchor the Defense Corridor.
• Medical Device Park (Greater Noida) & Toy Park (Jewar): Specialized clusters to reduce imports.
• Logistics Hubs: Multi-Modal Logistics Parks (MMLP) at Dadri (Western DFC) and Varanasi (Inland Waterway).

Current Affairs Linkage :

• RRTS Expansion: The Delhi-Meerut RRTS corridor (Namo Bharat) fully operationalized in 2025, creating a high-speed economic corridor in Western UP.
• Jewar Airport: Trial flights conducted in late 2025; set to be Asia’s largest airport, positioning UP as a global logistics hub.

4. Importance of Physical Resources

Trend: “Mineral Monetization” and “Renewable Energy Potential.”

A. Mineral Resources (The Vindhyan Belt)

• Major Minerals: Limestone, Coal, Silica Sand
• Strategic Minerals: Discovery of Potash (Sonbhadra) and Gold traces (Hardi field) potentially reducing import dependence.

B. Water & Land Resources

• Water Wealth: The Doab region (Ganga-Yamuna) offers the most fertile alluvial soil for multi-cropping.
• River Interlinking: The Ken-Betwa Link Project (Foundation laid)

C. Renewable Energy Potential

• Solar Power:
  • Bundelkhand: High solar insolation suitable for Ultra-Mega Solar Parks (Jalaun/Chitrakoot).
  • Solar Cities: Ayodhya and Varanasi being developed as model solar cities.
• Bio-Energy: High sugarcane production enables UP to be the top Ethanol producer, fulfilling the 20% blending target.

Current Affairs Linkage :

• e-Auction of Mines: The UP government’s shift to transparent e-auctioning of sand and morrum mines in 2024-25 increased non-tax revenue by 25%.
• Green Hydrogen Policy 2024: Incentivizing the use of water resources in Sonbhadra for Green Hydrogen production.