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Is Uttar Pradesh a rising star? Understand Economic History of UP

Is Uttar Pradesh a rising star? Understand Economic History of UP


  • GS 2 || Economy || Industries || History

An overview

  • The economy of Uttar Pradesh is the third largest of all the states of India.
  • According to a report published by the Ministry of Statistics and Programme Implementation, the Government of India the nominal GDP of the state for the year 2020-21 is ₹ 19.48 lakh crore (US$270 billion).
  • Fifth-largest state in India
    • It is the fifth-largest state in India. It accounts for 6.88 percent of the total area of the country. The population of the state was about 200 million as per the census of 2011, which accounted for 16.49 percent of the total population of India.
  • Uttarakhand was also a part of Uttar Pradesh till November 2000. The state is divided into 4 divisions, namely. Western (30 districts), Eastern (28 districts), Central (10 districts), and Bumdelkhand (7 districts).
  • An estimated 35% of the State population is living below the poverty line.

Performing better

  • Uttar Pradesh emerged on the top among all states in smart cities list 2021, followed by Madhya Pradesh and Tamil Nadu.
  • Amid the pandemic-driven economic slowdown, UP stood out in the crowd by becoming the second-largest state in the country locking Rs 19.48 lakh crore of Gross State Domestic Product (GSDP). It surpassed states such as Gujarat, Karnataka, and Tamil Nadu.
  • Uttar Pradesh is a favored tourist destination in India with Taj Mahal, one of the eight Wonders of the World, located in Agra. In 2019, domestic tourist arrivals in the state reached 535.8 million. Foreign tourist arrivals crossed over 4.74 million.
  • As of February 2021, Uttar Pradesh had an installed power generation capacity of 27,309.40 MW—6,242.00 MW (state utilities), 13,411.49 MW (private utilities) and 7,655.71 MW (central utilities).  The energy requirement in the state was 107,109 million units (MU) between 2019-20.


  • Agriculturally dominant
    • The economy of Uttar Pradesh entirely depends on agriculture.
    • Several important steps like an extension of irrigation facilities, arrangement for the timely supply of fertilizers, pesticides, and high yielding seeds promoting high yielding varieties of use of seeds, and continuous consultancy services of expect on agricultural matters have been taken.
    • The economy of Uttar Pradesh, with a geographical area of 24.093 million hectares, is agriculture dominated with about approximately 80% of the total geographical area as agricultural land.
    • The agriculture sector contributes about 40% of the State’s GDP and 75% of employment.
  • Irrigated land
    • About 70% of agriculture is dependent on irrigation. The net and gross sown area in the State is 16.68 and 25.52 million hectares respectively.
    • The net and gross irrigated areas from all sources are 13.12 and 18.94 million hectares respectively with about 11.7 million of crops land currently irrigated by surface water systems at an average cropping intensity of about 100%.
    • Principal crops-Rice, wheat, sugarcane.
    • Other- Maize, millet, and pulses, such as beans, peas, oilseeds, potatoes, lentils
  • UP is the largest producer of food grains and vegetables in India.
  • Uttar Pradesh is the largest producer of food grains in India and accounted for about 17.83% share in the country’s total food grain output in 2016-17.
  • Foodgrain production in the state stood at 49,903.1 thousand tonnes in 2016-17 and 51,252.7 thousand tonnes in 2017-18. Major food grains produced in the state include rice, wheat, maize, millet (bajra), gram, pea, and lentils.
  • Pulses production in the state stood at 2,208.0 thousand tonnes in 2017-18. The state remains the largest producer of vegetables in India and produced 1,002.64 thousand MT of vegetables in 2018-19


  • The state has diversified and naturally developed industrial activities.
  • 12th Five Year Plan envisages industrial growth rate of 11.2% p.a. and an estimated investment of lINR 3.17.754 Crores in the manufacturing sector.

Sedate Industrial Growth-Industrial growth is among the lowest five states in U.P. A lot of units of traditional industries have also shut down in past years.

  • Stands on 20 positions amongst 21 states on State Investment potential scale.
  • Shortage of electricity and vocationally trained people are the main reasons.
  • Key Industries
    • Information technology, agro-processing, tourism, mineral-based industries, textiles, handloom and handicrafts, food processing and sports goods,vegetable and animal oils and fats, dairy products, grain mill products, animal feed, carpets, and rugs.
    • 1,43,617 Industrial units (MSME and Heavy units) were already set up during the 12h FiveYearPlan(July 2015)with a total investment of INR21.956 Cr.
  • UP has about 25 lakh Handicraft Artisans in different crafts

Famous for

  • Uttar Pradesh has several locally specialized business clusters such as sports items in Meerut, brassware in Moradabad, perfumes in Kannuaj, leather in Kanpur, shoes in Agra, embroidered sarees in Varanasi, carpet in Bhadohi, chikan work in Lucknow, etc.
  • Uttar Pradesh is also amongst the top manufacturing destinations in India contributing more than 8% of national manufacturing output.

Heavy Industries and Minerals

  • There is a huge quantity of mineral resources are found in the Vindhya mountain range of Uttar Pradesh.
  • Mineral Production
    • Limestone, Dolomite, Glass-sand, Marble, Bauxite, Non-plastic Fireclay, Uranium, Barytes&Andalusite, Sand-stone, Pebbles, Reh, Salt punter, Maurang sand, Diaspore, Sulphur, Magnesite, Pyrophyllite, Silica sand are all minerals found in Uttar Pradesh.
    • Copper, lead, iron ore, and placer gold were mined on a small scale in the Himalayas, Bundelkhand, and South-Eastern districts in the early days.
  • Furthermore, Vindhyan Sand Stone for construction and Mill Stone were mined in the districts of Agra, Allahabad, and Mirzapur.
  • Before 1900, copper ores were mined on a small scale in erstwhile Garhwal; however, the development of modern technology, as well as the decline in prices, led to the decline of small-scale mining.
  • Mining activity declined further between 1920 and 1930 for a variety of reasons.

Geologists have been scouring the ground for both industrial and metallic mineral deposits that could be developed in light of current technology and economics.

IT and Service Industry

  • UP is a fastly emerging IT hub.
    • The state is a leading electronic hardware exporter in the country and has also emerged as a key hub for the IT/ ITeS and service sector including software, captive business process outsourcing (BPO), and R&D services.
  • The tertiary sector has been driven by trade, hotels, real estate, finance, insurance, transport, communications, and other services.
  • Software, captive business process outsourcing (BPO), electronics, semiconductor industry.
  • 6th largest software exporter at INR 13,352 crores with a 4.88 % share of Indian exports.


  • Software, electronics, computer hardware, chemicals, stone products, brass work, betel leaves, potato-based products, hand printing, leather items, cotton yarn, sarees, silk dress material, black pottery, handicraft items, art products, jewelry.


  • Because Uttar Pradesh is home to one of the world’s most beautiful wonders, the Taj Mahal, it attracts a large number of tourists each year.
  • On average, 2 million domestic and foreign tourists visit Uttar Pradesh each year.
  • The government of Uttar Pradesh has devised a new tourism policy to attract investments worth Rs5000 crore.

Socio-Economic Issues in the state

  • Despite being the hub in the IT sector and performing better in various spheres there still are various issues that need to be addressed.
  • There has been a view that over this millennium, the U.P. has witnessed some form of progress and lessening of inequality. But in the UN Human Development Index Report for 2017 (published in 2018), U.P. and Bihar scored the worst among all the States of India.
  • Evolution of communalism
    • The clichés about U.P. are true: Lawlessness, dacoity, communalism, caste killings, gender-based brutality, feudal-agrarian exploitation, unemployment, and underemployment.
  • Migration
    • A good part of its poor leads a sub-human life as migrant labour in urban India and outside. Onslaughts against its workers from nativist Maharashtrians, the exploitation of its laborers in West Asia; their illiteracy, and poverty are everyday realities.
  • Unemployment
    • High Levels of Unemployment Unemployment in U.P.: 58 per thousand VS Unemployment in India: 37 per thousand Unemployment in Youth (18 to 29 Age group): 148 per 1000 People.
    • Reasons- Low skill levels Low educational attainment Lack of jobs.
  • Unelectrified Rural households
    • 51.8% This condition prevails in the U.P. despite having the third-largest installed coal capacity in India. Factors: Corruption Red Tape within distribution companies
  • Crimes- Crime data Each citizen in U.P. grows up in an environment that legitimizes criminality.
    • The “Crime in India Report” for the year 2017 was released by the National Crime Records Bureau last year. U.P. topped the list with 10% of India’s total crime and three lakh registered First Information Reports (FIRs).
    • Crime against SCs has increased by over 7% and crimes against STs have increased by 26% in the year 2019 compared to 2018. Uttar Pradesh recorded the highest number of crimes against SCs in 2019, followed by Rajasthan and Bihar.
  • Infant Mortality Rate (2015-16)- 64 per thousand live births
    • U.P.’s infant mortality rate is very high in comparison to the Infant mortality rate in India, which stood at 41 per thousand live birth in 2015-16.
    • Reasons for such a high mortality Rate
    • Unavailability of specialist doctors.
    • Lack of Adequate nursing staff
    • The lowest health workers share in India (19.9%).
  • Lack of Quality Education and Unfulfilled Educational Goals
    • poor learning outcomes, low enrolment in secondary classes, high absenteeism
    • Young children are not able to read or write. Many cannot recognize letters & digits.
    • Despite high enrolment in primary classes, the state of education is not enviable in the state.
    • Uttar Pradesh has one of the lowest literacy rates among Indian states. With just a 67.68% literacy rate, Uttar Pradesh is ranked 29th in India according to the 2011 census
  • Internal Issues
  • One of the strongest arguments for the breaking up of the U.P. is its internal neglect. Over the last 30 years or more, Purvanchal (east U.P.), Bundelkhand, Awadh (central U.P.), and Paschim Pradesh (west U.P.), have been fighting for resources and separation from U.P.’s power centers. These areas struggle even for water. Uttarakhand split from U.P. and there is no doubt that it has progressed since.


  • The size of any state is always seen as a strength. Its size gives the country international heft, provides it economies of scale, allows it to earn taxes from its richer regions and spend them on the poorer ones.
  • The Human Capital of UP need to be given the right direction and use for the states overall development
  • Human capital is connected with human assets
    • education
    • health
    • skill/on-the-job training
    • migration
    • information/digital literacy
  • To engineer inclusive and sustainable growth for India, social infrastructure like education, health, and social protection is being given utmost priority by the Government.
  • The Government has been enhancing the expenditure on human capital along with adopting measures to improve the efficiency of expenditure by a convergence of schemes.
  • Bridging the gender gaps in education, skill development, employment, earnings, and reducing social inequalities prevalent in the society have been the underlying goals of the development strategy to enhance human capabilities.
  • In the 2021s, for the sake of U.P.’s citizens and Indian democracy, it is imperative to begin democratically discussing the division of U.P. to save it from any futher internal rift.

Mains model question

  • What do you understand by human capital? Explain how human capital formation contributes to economic growth and development.