Looking at the past, it doesn’t seem probable but it is indeed an aspirational goal and would require a comprehensive action plan for all economic sectors

Uttar Pradesh has 16 percent of the population of India but contributes only 8 percent to its GDP. If UP was to be a country it would be the fifth largest country in the world. At the time of Independence, the per capita income of UP was the same as the national average but today it is less than 50 percent of the same at Rs 65,431 per annum. It is true that UP has become the third largest economy with the current GDP of around $220 billion (Rs 17 lakh crore) but in terms of per capita income it is second from the bottom.

Recently the UP Government has issued a tender for hiring a consultant to take the UP economy to $1 trillion by 2027. Looking at the past this does not seem very probable as it would involve the UP economy growing at a rate of more than 30 percent per annum. However, it is indeed an aspirational goal and would require a comprehensive action plan for all sectors of economy because what is required is not an incremental push but a quantum leap.

UP is primarily an agricultural economy with 25 percent of the GSDP coming from this sector which employees more than 65 percent of the population. This is one of the main reasons for the poverty in the State as large number of people are under employed or in a State of disguised unemployment and, hence, not contributing to the economic development of the state. UP has nine agro-climatic zones and each would require a separate strategy for deciding upon issues like cropping pattern and also on ways to improve the productivity to bring it above the national level.

There are huge regional imbalances with western UP being far ahead of eastern UP in terms of productivity and income of farmers. Similarly, Bundelkhand is a rain-fed area where most of the farmers only taking one crop in a year. However, the same Bundelkhand if provided with adequate drip and sprinkler irrigation facilities can become a hub for citrus fruits, vegetables, medicinal herbs. Moreover, the real problem is the fragmentation of holdings with average size of land holding being 0.80 hectare meaning that most of the farmers are small and marginal and this has a huge impact on their viability. They are often in urgent need of cash and dispose of the produce at low prices. Aggregation of farmers through farmer producer companies is the answer. Further, huge investment is required in development of cold chains and storages so that the farmers can store their produce and release them in the market at an appropriate time.

Animal husbandry is often a neglected sector but it has been my experience that this can significantly add to the income of the farmers. A mission should be launched to bring about a dairy revolution in the state with its entire complement of feed, fodder, medicines, artificial insemination, chilling plants and processing centers. Similarly, a neglected sector of UP is that of fisheries where the state has a potential of growing at more than 15 percent per annum and through this the farmers of UP can become agribusiness entrepreneurs.

MSME sector is next only to agriculture in terms of generating employment and this is a vital sector for the state of UP. A forward looking and dynamic MSME policy is required which provides credit, technology and market to the MSME sector. Often the governments focus only on bringing in new industry but the existing industries also need a supporting hand. A separate cell has to be created to cater to the problems of the micro sector which is more than 90 percent of the MSME. This sector is largely unorganized and needs an approach specifically suited to its needs. Noida is the industrial hub of UP but industries need to move to other regions of the state.

The textile and leather sector has a great potential for developing and also generating large scale employment. Noida can easily become a hub for the electronic industry. Lucknow, Prayagraj and several other tier II cities have great potential for development of the IT sector which will give a big push to the UP economy. Besides, the network of expressways the eastern freight corridor and Delhi Mumbai corridor can easily stimulate industrial development in large areas adjoining to them.

The game-changing sector is the agro-processing one. A very small percentage of agriculture produce is processed today. At every block level a center for the development of the food processing sector can easily be developed which will provide employment to rural youth near their homes and there would be little need for labor to migrate to other states. These centers can be developed as rural growth engines which will have a transformational impact on the economy.

The vital sectors for the development of UP are health and education. The Government will have to invest heavily in these sectors and also bring about improvement in the governance to make quality health care and education accessible to all. A special mission for improvement in the learning competencies at the primary education level has to be given the highest priority and the gross enrollment rate in higher education increased to 50 percent.

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Freebies are not good economics but they often happen to be good politics as they become important reasons for a political party to get elected

Just last month the elections to the State assemblies of Uttar Pradesh, Uttrakhand, Punjab, Goa and Manipur were held. In the build up to the elections all political parties promised a lot of monetary benefits to the electorate which could be called doles or freebies. A PIL has been moved before the Supreme Court to direct the political parties to restrict the promise of freebies in order to have money available for developmental schemes. The Supreme Court has admitted the petition and also commented that political parties should indicate how they will arrange the funds to fulfill the promises made by them in their manifestos.

Last week the Prime Minister held a meeting with Secretaries of various departments of Government of India in which amongst the feedback given by officers there was a consensus that promise of freebies should be avoided otherwise they put unnecessary strain on the public finances and can lead to unsustainable deficits. It is true that prudent public finance management needs to ascertain the resources and allocate them to items of expenditure that would lead to a faster rate of growth for the economy. Expenditure on physical infrastructure like roads, energy or irrigation leads to creation of an environment that is conducive for private investment to flow into the manufacturing and services sector contributing to higher momentum of growth. It has also become increasingly clear that development of human capital is essential to bring about all round development of the economy and accordingly the tax payer’s money is best spent on social sectors like education and health. Various committees have been set up from time to time by Government of India and State Governments to evaluate the public expenditure and to indicate the road map for future expenditure targeting.

Freebies are not good economics but they often happen to be good politics as they become important reasons for a political party to get elected. Ultimately, politics is all about gaining political power and for that one has to win elections. There is no denying that in the long run good economics would be good politics as it would lead to greater employment and development. However, elections are very often fought on immediate issues and, therefore, the freebie culture has caught on. Political parties which do not have a chance of winning the elections promise the moon but the voter is aware that these are empty pronouncements and is not lured by them. It becomes a different matter when political parties who are serious contenders to form Government promise freebies because they will have to honor them on coming to power which could have a negative impact on the state finances.

It is advisable that any political party promising freebies in their manifesto must indicate from where they will get the resources to implement the promises if elected to power. The voter must be alert to ask these questions and be aware of the financial impact on promises being made. In reality this is generally not true and freebies do help parties in getting votes and the voter does not go into the financials aspects. This is the prime reason why the political parties race against each other to promise freebies. It is also true that a freebie which has been given by one government is likely to continue as no other government will be able to face the reaction if they propose to discontinue them. For example, many states promise free power to farmers. This leads to excess extraction of ground water and also continuation of traditional cropping patterns. However, this kind of free power is difficult for any new Government to remove as it would lead to their becoming unpopular.

At the same time, I feel a distinction must be made between a freebie and a genuine welfare measure. In India we have a welfare economy because growth has to be inclusive to take care of the vast majority of people who are still poor and are not able to get the basic minimum amenities of a decent livelihood. In the recent elections to the UP assembly a major factor of victory of the ruling party was the vote they got from the “beneficiary class”. These were voters who had benefited from schemes like Pradhan Mantri Awas Yojana (housing for all) and the distribution of free ration to those who had been pushed into poverty due to impact of the COVID pandemic. These schemes would come under the category of welfare measures which a government must take to address the problem of the poor and the under privileged.

Then, again, many political parties promise loan waivers and win elections on this basis. This is, in my opinion, a regressive measure. It leads to lack of financial discipline, impacts future loaning by banks and creates a big burden on the State. Most States which have promised and implemented loan waiver have had to reduce the expenditure on essential, physical and social infrastructure in order to manage the deficit in the budget. The long run impact of this on economic development is adverse. Once again it can be argued by its proponents that this is a welfare measure to alleviate distress of the farmers.

I recall that for the best part of my career we used to talk about plan and non-plan expenditure. Every Government focused on increasing the plan expenditure which led to creation of new assets and tried to keep to non-plan expenditure as low as possible. Whenever, there was an economy drive the immediate step taken was to slash the non-plan budget by a certain percentage. This led to a situation where maintenance of assets suffered hugely and the education and police departments bore the brunt as the maximum expenditure in their budget was on salaries which was essential and could in no way be labelled as a drag on the economy. Fortunately, this distinction is no longer there. Money is the same whether plan or non-plan. Too much emphasis on subsides and freebies does distort the financial position of the State. The criticality of financial prudence can only be over looked if one is prepared to face a financial crisis like the Sri Lankan economy is facing today. However, every welfare measure in favor of the poor and underprivileged should not be construed as a freebie as prime objective of the State is to look after the welfare of its citizens. There is a thin line between two but still one can distinguish between a genuinely inclusive policy and an unnecessary and unwarranted freebie. The latter should be avoided but the former is essential for a welfare State.

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The Government’s performance depends upon proper communication of its policies and schemes but little or no effort is made in this direction

I was the chief guest in a seminar of the medium and small industries sector (MSME) at Lucknow recently and surprised to find that the biggest problem appeared to be a huge communication gap between the government and the entrepreneurs. Most MSME members are not aware of the government schemes available for them and are unable to take advantage of them. That is why the objectives of the schemes are not fully realised.

MSME is a key sector. Nearly 60 million MSME units in the country employ about 110 million people and contribute 30 percent of GDP and 48 percent of exports. At the seminar,I found that most industrialists spoke about the problem of getting credit for the sector, marketingtheir products, and technological innovation. Later, when the various schemes were outlined and explained to them, they were surprised to find that they could run their industry much better by using the incentives offered by the government.

It was then decided that awareness meetings need to be held in various industrial areas, districts and academic institutions and that the government should take the initiative so that intended beneficiaries are sensitized properly. Strangely though, the entire performance of the government depends upon proper communication of its policies and schemesbut little or no effort is made in this direction. It is true for other sectors as well — agriculture, environment, health, and education. There is thus a need for a communication strategy at the level of the Union and State Governments.

I was closely associated during my tenure as an IAS officer with the information department of UP. The department issued advertisements to the mediato highlight government’s achievements. The vital schemes are mentioned but details are not given. Merely issuing an advertisement does not make people aware of the benefits of the schemes. During my tenure as District Magistrate, we had an information officer whose job wasto make people aware of the government schemes and projects. He was expected to use local folk artists and theatre to popularized government schemes and make them reach the citizens in a simple and entertaining manner. This used to be quite effective but over time these innovative tools of communication are not being resorted to.

The quickest way to reach the millions is through the use of social media. Increasingly the government and its officers are using Twitter, Facebook, Youtube and Whatsapp messaging to communicate their ideas and schemes. Normally large budgets are allotted to the information department but somehow it is spent on expensive advertisements. We need to evaluate whether this budget is being utilized effectively and are the people being made aware of government schemes and policies.

One-way communication does not always give the right results. For communication to be effective, there is need for feedback. Fortunately, technology has made this a simple matter. I recall as Chief Secretary, I wanted to know whether the beneficiaries of various schemes are genuine and have got the desired benefit. In the past, the only way of knowing was to physically verify things. Technology now makes it possible to do 100 percent verification and in no time.We set up a call center to contact the listed beneficiaries on their cell phones to find out whether they had received assistance under various government schemes. We also gave them details of schemes over the phone and took their feedback and suggestions. This worked really well and I would like to use this template for future use of technology-based communication.

In rural areas radio is an excellent mode of communication. Television also plays a useful role. However, there is no substitute for old-fashioned face-to-face interaction. I remember as a District officer I use to visit villages and hold meetings explaining to the villagers about government schemes and how they could avail the benefits. The audience was given time to clear their doubts and put forward their grievances. Over the years paper work increased so much that that touring in the interior areas has become rare.

The government needs a professional approach for dissemination of information and communication with the citizens. Apart from print media, television, field visits and use of folk art, the strategy is to go digital.Social media has tremendous reach and therefore becomes an important medium. Technology can make information accessible to all. If the Government genuinely wants to get full benefit of the budget being spent on the development schemes it would be well advised to make communication strategy and consequent action plan one of its top priorities.

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