Coming To The Party: How Pace Of Infra-Building In Uttar Pradesh Can Impact The Entire Region

First, the natural gas pipeline was extended to eastern Uttar Pradesh, Bihar and West Bengal. Next, the closed naphtha-based fertiliser unit at Gorakhpur, in northeastern UP, was replaced by a gas-based facility. The long-forgotten Saryu Nahar canal irrigation project was implemented in four years. It will irrigate over 14 lakh hectares of land in nine districts centring Gorakhpur.

The state capital, Lucknow, was already connected to Delhi, in the northwest, by Noida-Agra and Agra-Lucknow expressways. The Yogi Adityanath government extended it by 340 km to Ghazipur, on the Bihar border, in south-eastern UP. An under-construction link expressway will soon connect Gorakhpur to this spine.

Little doubt that the development of eastern UP is finally getting due policy attention. But that’s only a part of a game-changing initiative to address the core issues behind the economic backwardness of India’s agrarian hinterlands, arguably home to the largest number of poor. By giving it a quick shape, UP is creating a perfect example for Bihar to join the party.

UP at the forefront

The most visible part of this multi-disciplinary initiative is the rapid infrastructure creation in UP. The primary aim is to reduce logistics costs and ensure better market access potential to industrial and agricultural production zones. The mid and long-term goal is to take the manufacturing map deeper into the hinterlands.

Before 1991 India’s industrial growth was dominated by the whims and fancies of the central government without much regard to competitiveness. The rules of the game changed with liberalisation.

While inefficient freight logistics in the country kept import-export dependent manufacturing glued to coastal states; lack of airport, decent roads, reliable power infrastructure, quality healthcare and inadequate urban infrastructure prevented the growth of the service sector in the hinterlands.

Uttar Pradesh is thrice the size of Tamil Nadu in terms of population and twice in area. But until recently, both the states had a similar number of airports. Tamil Nadu had four international airports against two in UP. The mining and metals zone in Bundelkhand (UP) had feeble rail connections, bad roads and no air connectivity. Law and order were pitiable.

The Yogi-Modi ‘double engine ki sarkar’ is filling up the infrastructure gap. Kushinagar, an important Buddhist site in the east, just got an international airport, taking the state total to three. Two more international airports are coming up. This includes Jewar in Noida, in western UP.

Reconfiguring industrial landscape

UP’s development had been restricted to the West, roughly between Delhi and Lucknow in pre-liberalisation days. The industry map didn’t change much post-liberalisation.

Lack of intent; political instability till 2007 for one-and-a-half decades after liberalisation and; inordinate delay in implementation of central government-sponsored key logistics projects like Dedicated (rail) Freight Corridor (DFC) – all contributed to this eventuality.

If the expressway building is a yardstick of development, the Mayawati government (2007-12) connected Noida with Agra (165 km) in western UP. Akhilesh Yadav (2012-17) extended the expressway by another 300 km to Lucknow.

Over the last five years, Chief Minister Yogi Adityanath extended the expressway network by nearly 640 km to the east (Purvanchal) and the south (Bundelkhand). The East-West connectivity will get a further boost with the proposed 594 km Ganga expressway.

End-to-end expressway connectivity, the creation of new airports and the extension of the natural gas grid increased the market potential of UP. Completion of the DFC and Varanasi-Kolkata inland-water way (Ganga Jalmarg) will further improve the attractiveness of the state as an investment destination. Both the projects are now progressing at a fast pace.

The Eastern and Western DFCs together will offer quick connectivity to ports on the West coast and Kolkata in the East. Port-connectivity will further improve if the centre goes ahead with the proposed North-South DFC.

But connectivity alone will not solve all of UP’s woes. The traditional trading and MSME manufacturing hubs, like Kanpur, are witnessing declining fortunes. The state is trying to inject fresh blood into the industrial landscape by attracting new age investments.

Leaving aside big-ticket investments like Samsung, Adityanath is aiming to build Noida as the biggest logistics hub in the north and Varanasi as the multi-modal logistics and trading hub. The Defence corridor is another important initiative that is riding on the infrastructure building rush.

The centre is targeting phase-wise offset of imports and escalation of domestic manufacturing from $11 billion to $25 billion, including $5 billion export content, in 2025. If UP can attract even a fraction of the new capacities, that will be a new beginning for western and southern UP.

The most crucial task is letting the development flow to the agrarian east. Improved irrigation and the fertiliser plant are early steps to improve income potential in the east. Attracting industries that are looking forward to tapping the wider market in the hinterlands may be the next logical step.

New opportunity for Bihar

With over 30 crore people living in UP and Bihar together and another two crores in landlocked Nepal, the region has a market size equivalent to the USA. Easy connectivity in Bihar is a prerequisite to optimising this potential.

Bihar is expressing intentions to tap the emerging opportunity. So far, they only had a few units (coal-based power plant, refinery, rail facility) created out of state largesse without much competitive advantage. Availability of gas opened new horizons.

Similar to Gorakhpur, a new gas-based fertiliser plant (replacing a closed naphtha-based facility) is coming up at Barauni, roughly 120 km from the state capital Patna. To make a new beginning, Bihar now needs better transport logistics.

Delhi is establishing a 17 km link between Purvanchal Expressway and Patna-Buxar national highway (NH). It will reduce the travel time between Patna and Delhi from nearly a day to barely 12 odd hours. Patna is only 140 km from the UP border.

The story didn’t end there. The union government has approved the construction of the first expressway (Amas-Darbhanga) in Bihar, connecting the Vaishali-Rajgir-Bodhgaya Buddhist tourism circuit.

Now Bihar is asking for a North-South expressway connecting Patna with the largest India-Nepal border gate at Raxaul. The wider plan is to extend the expressway up to the West Bengal border in the East. The proposal is pending approval.

Meanwhile, the centre evinced interest to connect Gorakhpur with Siliguri in the northern part of West Bengal via northern Bihar. The majority of the proposed expressway will pass through the poorly connected north Bihar districts bordering Nepal.

Building quality connectivity is not easy. Even if the centre agrees to foot the bill, projects are taken up only after the state arranges a minimum of 85 per cent of the required land. The energy level of Bihar will, therefore, define the pace of future development.

Act East

There is little doubt that the pace of development in the UP and focus of the centre on infra building has laid the foundations for growth in the land-locked region sharing long international borders. The impacts may be felt on India’s trade with eastern neighbours.

Currently, Bihar, West Bengal and Eastern UP have little contribution in India’s $17-18 billion bilateral trade with Nepal, Bhutan and Bangladesh. An efficient East can help create a wider value chain and give India a competitive edge, over China, in the neighbourhood.

With China connecting Nepal by rail and building up pressure on all fronts, it is time India adds on its competitive edge.