For India’s Good, Uttar Pradesh WILL Catch Up With Tamil Nadu

Is it fair to juxtapose two states with disparate beginnings and then censure one for its pace of progress? 

In his thinkpiece titled, ‘Has Uttar Pradesh’s Economy Surpassed Tamil Nadu?’, published in Frontline on 7 February 2024, Palanivel Thiaga Rajan (PTR), Tamil Nadu’s Minister for Information Technology and Digital Services, presents the states as competitors, without acknowledging that Tamil Nadu enjoyed a head start from the outset. 

The unfair comparison has to be countered.

1. Comparison of the Key Indices of Uttar Pradesh and Tamil Nadu

A. Growth Rates Within HDI

For instance, in the fiscal year 2004-05, while 22.5 per cent of the total population of Tamil Nadu was below the poverty line, the corresponding figure for Uttar Pradesh stood at 32.8 per cent.

Not only did Uttar Pradesh exhibit a higher percentage of the population below the poverty line than Tamil Nadu, but in absolute terms, the total population of Uttar Pradesh also exceeded that of Tamil Nadu by over 60 per cent.

Thus, the population below the poverty line in Uttar Pradesh surpasses Tamil Nadu by a substantial margin, not by a mere ‘10 per cent’, as one might think in the first instance. 

While Tamil Nadu has indeed experienced a noteworthy 50 per cent reduction in the proportion of multidimensional poverty between 2015-16 and 2022, it is crucial to evaluate the recent performances of both states in absolute terms. 

PTR rightly highlights that Uttar Pradesh's Gross State Domestic Product (GSDP) has not yet reached the level of Tamil Nadu's; however, one must not overlook the significant transformative impact that state’s development initiatives may have in the coming years.

Under the leadership of Yogi Adityanath, the Uttar Pradesh government facilitated the escape of 3.38 crore individuals from poverty between 2015-16 and 2021-22, a figure much larger than that of Tamil Nadu.

Prima facie, this accomplishment not only underscores the earnest efforts of Uttar Pradesh but also indicates an increase in tax revenue, reflecting a positive trajectory in the state's economic landscape.

B. Economic Growth Trends 

Between 2010-11 and 2021, foreign direct investment (FDI) into Uttar Pradesh surged by 131.18 per cent. This is not to discredit Tamil Nadu's commendable performance, as its FDI inflow in equity soared by 169 per cent. Rather, it illustrates Uttar Pradesh's trajectory of catching up with Tamil Nadu, a comparison that might have seemed outlandish even a decade ago.

In 2016, Tamil Nadu was amongst the top five states with 49 registered startups, while Uttar Pradesh was nowhere close to it with only 27 registered start-ups. However, the tables have completely turned since Yogi Adityanath assumed power in Lucknow.

UP today ranks fourth when it comes to registered startups and has already crossed Tamil Nadu’s number with a significant margin The impact of the same can be seen in the employment the start-up ecosystem generates in the two states with 67,694 direct jobs being created in UP between 2019-23, 69 per cent more than Tamil Nadu. These are publicly available facts that PTR ignores in his article.

To revisit our stance, we believe that it was never a competition amongst states to begin with but a marathon effort by all states resulting in a win  for India. In fact, Tamil Nadu and Uttar Pradesh have been leading India’s electronic export journey and have been consistently among the top three exporter states for years. 

2. How A Good Decade Can Make All The Difference 

The economic transformation of Indian states in merely a decade is not unheard of, with Chhattisgarh being the biggest example of such turnarounds. At the time of its formation in 2000, Chhattisgarh accounted for just 1.4 per cent of India’s total output and lagged most states on several development indicators.

However, under 15 years of the Raman Singh-led BJP regime, the state’s economy grew steadily. Between 2000-01 and 2014-15 (using data from the 2004-05 series), the Chhattisgarh economy grew at a compound annual growth rate (CAGR) of nearly 8 per cent. 

A similar economic transformation is already underway in Uttar Pradesh. 

Uttar Pradesh has experienced a significant Foreign Direct Investment (FDI) surge in recent years. Data from the DPIIT and RBI indicate a fourfold increase in FDI between 2019 and June 2023 compared to the period from 2000 to 2017. 

In just five years, FDI has soared from Rs 3,000 crore to approximately Rs 11,000 crore. Hence, if it took only five years for UP to surpass 22 other states, then it will definitely take less than 60 odd years to become one of the most industrialised and developed states. PTR’s 64-year wager is up for anyone’s contention.

Even on the social front, in Uttar Pradesh, the Infant Mortality Rate (IMR) has decreased from 61.0 in 2010 to 38.0 in 2020, showcasing how right intentions yield substantial rewards. Such transformation is remarkable when one reflects on the handicapped start that UP had had. Even after a decade post independence, when Tamil Nadu had a literacy rate of over 30 per cent, UP was below 25 per cent.

It is through mutual learning and drawing inspiration from each other that Indian states can collectively lead India towards a brighter future. The crucial 25-year period between now and 2047 calls for sharing best practices and working together to achieve developmental goals, and not for getting into a squabble over ‘who-did-it-better’.

3. The GSDP Question

With the stable government in Uttar Pradesh, post COVID-19, the economy has grown more than that of Tamil Nadu.

Since 2016, the GSDP has increased at an average of 10.13  per cent yearly for Tamil Nadu - while Uttar Pradesh has kept pace with an average of 10.49 per cent. CM Yogi Adityanath has laid a strong foundation of infrastructure development, pro-poor welfare policies, and focus on manufacturing and all-round development of institutions. This is sure to herald a period of monumental growth for Uttar Pradesh in the coming decades.

4. Cooperation, Not Competition 

We see merit in PTR’s proposition that there should be a population factor while assessing the progress of the state. As per the budget estimates of 2022-23, Tamil Nadu has the highest outstanding debt in the country, closely followed by Uttar Pradesh. But let’s compare the Per Capita Debt of both Tamil Nadu and Uttar Pradesh. 

In fact, the declining state of Tamil Nadu’s finances makes every citizen in Tamil Nadu shoulder more debt than ever before.   

The pervasive corruption within the state of Tamil Nadu, acknowledged in audio tapes said to be of PTR himself, is bound to derail the state’s chartered growth patterns. Despite having a head start, Tamil Nadu’s trajectory is marred by a series of setbacks, largely attributed to the flawed policies and reckless freebies and protests of the “Dravidian Model.” 

If one were to, then, presume that Tamil Nadu is on the path of economic decline and UP on a steep incline, would it really take 64 years for the states to level with each other? As keen observers of the Indian political landscape at this juncture, we would advise against placing such unwise bets. Our money is on the steady and sure rise of a unified economic powerhouse, that is India.

(Kritica Bisht, from Lucknow, and Gopinath Vijayaraj, from Chennai, are public policy researchers.)