Popular BJP leaders with future prime ministerial ambitions have learnt a trick or two from Narendra Modi’s playbook. Uttar Pradesh chief minister Adityanath has learned very fast how to couch the developmental agenda in hyperbole disconnected from reality. After his election, Modi gave a roadmap for the doubling of India’s GDP to $5 trillion by 2022 which, of course, was never to happen. It’s to give gullible voters something to chew on in a fantasy world.
Adityanath has surpassed the prime minister, announcing that UP’s GDP will grow to $1 trillion in five years. It is currently roughly $250 billion, so the promise is to quadruple it in five years. You don’t need to be an economist to know that even very high nominal GDP growth of 15% annually would only result in a doubling of dollar GDP in five years, provided the rupee does not weaken. The UP chief minister’s promise is divorced from reality.
State opposition leader Akhilesh Yadav asked a simple question: how is the $1 trillion GDP target reflected in Adityanath’s present budget? UP’s budget only increased from Rs 6.15 lakh crore in 2022-23 to Rs 6.90 lakh crore in 2023-24, or about 12%. Factoring in inflation, it’s only 6%. This is hardly the kind of public expenditure growth needed to quadruple GDP by 2027-28, especially when the Modi government acknowledges that private investment growth is still weak.
While presenting the budget, Adityanath said it marked the entry of the state’s economy into “Amrit Kaal”. The UP government has projected nominal GDP growth of 19%, while the Union budget projects 10.5% for India in 2023-24.
How will UP, with all its problems, grow at nearly double the national GDP growth rate? In 2019-20, UP’s per capita income was merely Rs 41,023, half of the national average of Rs 86,659. Its GDP growth was barely 2% in 2017-2021, according to estimates provided by the reputed economist Santosh Mehrotra.
UP’s labour force participation ratio is about 33%, way below the national average of 48%. For women, it’s even lower, probably a single digit. Can a state produce an economic miracle with such figures? Even if one grants CM Adityanath his economic fantasy (real GDP growth of 14% and inflation of 5%) for the next five years, the state would still be nowhere near its $1 trillion GDP target.
So where is the $1 trillion GDP number coming from ?
Adityanath has also claimed ― after his much-publicised global business summit in Lucknow recently ― that about 18,000 MoUs have been signed to bring in Rs 33 lakh crore of new investments. This is also borrowed from Modi’s Gujarat “global summits”, in which a large number of investment MoUs were signed, but only a fraction fructified.
One doesn’t know how much Adityanath will deliver on the hyperbole. What one does know is that he is clearly following in Modi’s footsteps to get where he’s reached.