Yogi Adityanath Okays Special Investment Regions — Uttar Pradesh Needs Them To Become $1 Trillion Economy

To keep his promise of making Uttar Pradesh (UP) a $1 trillion economy by 2027, Chief Minister Yogi Adityanath greenlit 11 decisions in a cabinet meeting held on 2 July.

Perhaps the most important decision was to create special investment regions. If they accomplish it, UP would become the fourth state to have these regions after Gujarat, Karnataka, and Rajasthan.

States That've Done It

Gujarat passed the Special Investment Region Act in 2009. Today, Dholera has become the largest such region there, attracting foreign investments. Even India's first semiconductor fabrication facility (fab) is being built there with an investment of Rs 91,000 crore.

Rajasthan followed suit in December 2016. As a result, it attracted second-highest corporate investment in the financial year (FY) 2022 after Gujarat. The Jodhpur-Pali-Marwar Industrial Area has been declared a special investment region.

Karnataka is the most recent state to pass legislation for the creation of special investment regions. Since it only came to pass in 2022, results are yet to be seen. It doesn't help that the Congress government, which came to power in 2023, is focused on funding freebies.

The Need For Special Investment Regions

Notably, besides UP, Gujarat and Karnataka are also aspiring to become $1 trillion economies. Therefore, having special investment regions appears to be one of the main pathways for attracting large investments.

These regions offer large, developed land banks to investors. While UP has not declared the number and size of such regions yet, it is expected that four such regions will be developed.

They will cover over 10,000 acres of land, as per officials quoted by The Indian Express. The legal backing for the initiative will be provided by passing the NIRMAN (Nodal Investment Region for Manufacturing) Act.

According to Anil Sagar, Principal Secretary of the Infrastructure and Industrial Development Department, special investment regions in UP will be known as NIRMAN and will work under a decentralised model.

This means their master plans could be prepared and changed locally. The issuance of no-objection certificates and licences could also be done locally to enhance the ease of doing business.

The cabinet approval was necessary for UP because the state currently has 190 acres of maximum land at a site on average. Around 25 per cent of industrial areas have less than 50 acres of land.

The non-availability of large land parcels has been one of the factors hindering UP from getting large investments like the Apple plant in Tamil Nadu or the Mercedes plant in Maharashtra.

While most of the big plants in UP, like those of PepsiCo and Samsung, are spread over an area of around 30 acres, larger manufacturing facilities need land on hundreds of acres.

"About 2 lakh acre of land would be required to take our economy to the $1 trillion target and it would be possible through big investment regions," said Principal Secretary Sagar.

UP's Agriculture Focus

Apart from attracting investments, Adityanath is focusing on the agriculture sector, as its contribution to UP's gross state domestic product is more than one-fourth. 

The aim is to double the agriculture growth rate to 20 per cent. To make this happen, an agriculture technology (agritech) policy has been approved to foster the digitisation of farming through various platforms.

These platforms will share real-time data about weather and conduct digital crop surveys, helping reduce farming costs and enhance productivity.

Agriculture Minister Surya Pratap Shahi said new technologies like artificial intelligence (AI), blockchain, and data science will be used to aid digital farming.

Under this policy, Rs 21 crore has been allocated for five years. Farmers will now be digitally registered. Agritech startups will also be promoted.

Livestock also forms an important part of UP's economy. To ensure their well-being, Fodder Policy 2024-29 has been approved as a shortage of green and dry fodder was reported.