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| Table of Content |
| Public Finance and Fiscal Policy of Uttar Pradesh Tax Reforms in Uttar Pradesh Economic Reforms in Uttar Pradesh One District One Product (ODOP) Policy |
Public Finance, Economic Reforms & ODOP Policy:
Trend: Analytical questions on “Fiscal Health,” “Capital Expenditure (Capex) Push,” and “Deficit Management.”
A. Public Finance Framework
- Budget 2025-26 Snapshot:
- Budget Size: A historic ₹8.08 Lakh Crore, reflecting an expansionary fiscal stance to fuel the $1 Trillion economy goal.
- Expenditure Composition: A strategic shift with ~22% allocated to Capital Expenditure (Capex) for asset creation (Expressways, Metro, Power plants) versus Revenue Expenditure (Salaries/Pensions).
- Revenue Surplus: UP continues to be a Revenue Surplus state (projected at 2.6% of GSDP for 2025-26), indicating that the state earns more than it spends on day-to-day operations.
B. Fiscal Policy & Discipline
- Fiscal Deficit: Targeted at 2.97% of GSDP (approx. ₹91,400 Crore), strictly adhering to the FRBM Act limit of 3.5% set by the 16th Finance Commission.
- Debt Management:
- Debt-to-GSDP Ratio: Managed at ~30%, which is sustainable compared to debt-stressed states.
- Green Bonds: UP’s initiative to raise capital via Municipal Bonds (e.g., Ghaziabad/Lucknow Municipal Corporation) for sustainable infrastructure.
Current Affairs Linkage :
- NITI Aayog Fiscal Health Index: UP was categorized as a “Front Runner” in fiscal management in 2025 due to its consistent revenue surplus and aggressive capex deployment.
- 16th Finance Commission: In its 2025 memorandum, UP demanded a revision in the “Tax Devolution Formula,” arguing that its Population (19.98% of India) and Fiscal Discipline should be rewarded with a higher share than the current 17.9%.
Trend: Focus on “GST Efficiency,” “Tax Base Widening,” and “Technology in Taxation.”
A. Goods and Services Tax (GST) Administration
- Collection Trends: UP consistently ranks as the second-highest GST collector among states (non-coastal), recording an 11-12% YoY growth in collections (July 2025 data).
- Technological Interventions:
- AI & Big Data: Use of “Project Bow-Web” (or similar state analytic tools) to detect tax evasion by matching E-Way Bills with FASTag data.
- Registration Drives: Special campaigns to register MSMEs and traders to widen the tax net.
B. State Excise & Non-Tax Revenue
- Excise Policy 2025-26:
- Reforms: Introduction of Track & Trace systems using QR codes on liquor bottles to prevent leakage.
- Revenue: State Excise remains the second-largest own-tax revenue source.
- Mining Reforms: Shift to E-Auction for sand/morrum mining leases has curbed the “Mining Mafia” and boosted non-tax revenue by 25% in 2024-25.
Trend: Shift from “Red Tape” to “Red Carpet” via “Policy-Driven Governance.”
A. Ease of Doing Business (EoDB)
- Nivesh Mitra 2.0: Integration of 45+ departments for single-window clearances; reduced average clearance time from weeks to days.
- Investment Policies :
- FDI Policy 2025: A pioneering policy offering “Front-End Land Subsidy” (up to 80%) and capital interest subvention for Fortune 500 companies.
- Semiconductor Policy 2024: Incentivizing high-tech manufacturing with a 50% capital subsidy top-up (State + Center).
B. Financial Inclusion & Banking Reforms
- BC Sakhi Yojana:
- Reform: Deployment of 58,000+ women as Banking Correspondent Sakhis in Gram Panchayats, effectively digitizing the rural cash economy.
- Family ID (One Family One Identity):
- Concept: A unique 12-digit ID for every family to map benefits.
- Impact: In 2025, this database enabled the auto-identification of 1.5 Lakh new pensioners who were previously excluded due to lack of documentation.
Trend: Evolution from “Promotion” to “ODOP 2.0 (Exports & Unity Malls).”
A. Core Framework
- Objective: To preserve indigenous crafts and boost district-level GDP by identifying one unique product per district (e.g., Kala Namak Rice from Siddharthnagar, Ittra from Kannauj).
- Support System:
- Common Facility Centers (CFCs): Providing modern machinery for artisans (e.g., automated pottery wheels in Khurja).
- Marketing: Tie-ups with Amazon/Flipkart and on-boarding on GeM (Government e-Marketplace).
B. ODOP 2.0 (2024-25 Initiatives)
- One District One Cuisine (ODOC):
- Launch: In late 2025, the policy expanded to include culinary heritage (e.g., Mathura Peda, Agra Petha) to promote “Gastronomy Tourism.”
- Unity Malls (Ekta Malls):
- Locations: Construction sanctioned in Agra, Lucknow, and Varanasi.
- Concept: Grand malls dedicated to selling ODOP products from UP and other states (under the “Make in India” umbrella) to tourists.
- Export Surge: ODOP products now constitute over 50% of UP’s total merchandise exports, with items like Moradabad Brass and Bhadohi Carpets reaching new markets in Latin America.
Current Affairs Linkage :
- G20 & Global Branding: The strategic use of ODOP items (e.g., Banaras Pink Meenakari) as gifts for foreign delegates during G20 and subsequent diplomatic visits has created a massive global recall value.
- ODOP Marts: In 2025, the UP government mandated the opening of “ODOP Marts” at all Railway Stations (under One Station One Product scheme) and Bus Terminals to boost local sales.
