UP’s economy contracted 22.5% in first quarter of 2020-21

Virendra Singh Rawat

Lucknow / Oct 30, 2020

Amid the global pandemic headwinds, the Gross State Domestic Product (GSDP) of Uttar Pradesh contracted sharply by 22.5% in the first quarter (Q1) of the current financial year 2020-21 compared to the corresponding period last year.

The state witnessed its sharpest ever quarterly contraction in its GSDP due to the strict lockdown imposed during the initial months (March onwards) of covid-19 lockdown to contain the spread of the disease. During this time, most industrial and commercial activities, barring those engaged in essential commodities viz. food, medical supplies etc, were closed down, which have reflected in the economy’s steep slide.

However, the 22.5% fall in the state’s Q1 GSDP ranks favourably to India’s performance during the corresponding quarter with the country’s GDP falling 23.9% in Apr-June 2020.

Since, UP is targetting to become a $trillion economy by 2024, the slide in the GSDP in the first quarter has made the state government to take corrective and proactive steps to boost the economic activities and generate fresh employment for the youth and the massive reverse migration of its workforce after lockdown.

According to the Economics & Statistics Division of the State Planning Institute, UP, which has released the GSDP figures (both at constant (2011-12) and current prices for 2020-21), the GSDP at constant prices in Q1 is estimated at more than Rs 1.99 trillion (1 trillion=1 lakh crore), thus showing a (negative) growth of -22.5% vis-à-vis corresponding quarter of 2019-20.

These estimates conform to the methodology prescribed by the Central Statistical Office (CSO) and reflect the provisional data of targets and achievements provided by the state government departments.

According to the Gross State Value Added (GSVA) at constant (2011-12) prices for Q1 (2020-21), the primary, secondary and tertiary sectors of UP’s economy showed a growth of -4.5%, -42.9% and -22.8% respectively pegged against the corresponding quarter of 2019-20.

Thus, the secondary sector, which covers economic activities pertaining to varying degrees of processing of raw materials (manufacturing, construction industries), showed the lowest growth pattern.

The primary sector comprises activities which entails harnessing of natural resources viz. agriculture, fishing, forestry, mining, deposits, while the tertiary sector mainly comprises tourism, transport, financial services, real estate, hospitality, warehousing, communication etc.

The GSDP at market (current) prices is estimated at more than Rs 3.23 trillion in Q1 of the current financial year 2020-21, while the GSVA at current prices is pegged at Rs 2.94 trillion.

Amid domestic inventory of 10 million tonnes, UP sugar mills start crushing operations

Virendra Singh Rawat

Lucknow / Oct 28, 2020

The sugarcane crushing operations in India’s top sugar producer Uttar Pradesh has begun even as the domestic sugar inventory was pegged at over 10.5 million tonnes (MT) at the beginning of the current season (Oct-Sep) 2020-21.

UP accounts for nearly 40 per cent of the country’s sugar output, and the Indian Sugar Mills Association (ISMA) has projected the state’s sugar production to exceed 12.45 MT in the current season, compared to 12.63 MT in 2019-20 season.

According to UP sugarcane and sugar commissioner Sanjay Bhoosreddy, two Western UP sugar mills, one each belonging to the cooperative and private sectors, had started crushing.

The crushing operations would gain momentum as the days advance and most of the state mills, numbering 119, will be functional in 2-3 weeks.

UP’s sugarcane economy is pegged at Rs 50,000 crore, comprising sugar, molasses, ethanol, power cogeneration etc.

Interestingly, UP private sector millers, numbering 94, collectively owe farmers’ outstanding of nearly Rs 7,000 crore for the previous 2019-20 season. Taking a tough stance, the Yogi Adityanath government has already issued recovery certificates against several private sector mills.

The RCs have been issued under Sections 17 (4) and 18 (3) of UP Sugarcane (Supply and Purchase Regulation) Act, 1953. The action was taken after these mills failed to settle their payment commitments despite repeated warnings. The RC empowers the administration to seize movable and immovable properties, including sugar stock, for auction to settle the liabilities.

Earlier, the second set of satellite images of cane acreage in India was procured in the first week of October 2020. Based on the analysis, the crop area was estimated at 5.27 million hectares (MH) in 2020-21 season, 9 per cent higher than 2019-20 cane area of 4.84 MH.

ISMA estimated the diversion of cane juice and B-molasses for ethanol will reduce sugar output by 2 MT in 2020-21 compared to 0.8 MT diverted in 2019-20. Therefore, after accounting for the reduction in production due to diversion, the domestic sugar in the current season 2020-21 is pegged at 31 MT. However, a better picture would emerge once ethanol tenders are floated by the oil marketing companies (OMC) and the mills bid for the supplies.

Meanwhile, the opening balance of sugar as on October 1, 2020 at 10.64 MT is 5.5 MT higher than the domestic requirement for the initial months of the season till the new sugar stock is not fully available in the market. ISMA underlined that India needed to “continue” to export about 6 MT of surplus sugar during 2020-21.

Covid impact: UP to introduce digital learning in madarsas

Virendra Singh Rawat

Lucknow / Oct 25, 2020

With online education and digital classes becoming the new normal post covid-19, the Uttar Pradesh government is planning to introduce online/digital learning in the state’s madarsas as well.

Madarsas are minority educational institutions, primarily offering study in Islamic theology and religious law. Currently, there are about 19,000 recognised and 560 aided madarsas functional in UP.

The state minorities department is in the process of developing a specialised mobile app to cater to both the Islamic theology and the National Council of Educational Research and Training (NCERT) syllabuses followed in the state madarsas.

The app will be developed by UP Development Systems Corporation Limited (UPDESCO), which is a state government agency under the department of IT and electronics.

UP minorities, waqf and haj minister Nand Gopal Nandi has already mandated the minorities welfare department and UPDESCO to initiate the process of conceptualising and developing the mobile app, so that the madarsa students could also receive education through the online/digital mode like their counterparts in other academic systems.

Meanwhile, the proposed mobile app, which will provide a gateway to the NCERT books, will largely benefit the unaided madarsas, while the students will not have to scurry for their study material in physical forms.

Last year, the aided madarsas in UP were provided free NCERT books, while the non-aided madarsas could not avail of the benefit. The mobile app will provide a link to the madarsa portal while also linking all the madarsas operating in UP for greater traction and benefit of the students and teachers.

Earlier, UP chief minister Yogi Adityanath had issued directives for improving the quality of education in madarsas and introducing curriculum based on the NCERT pattern.

In fact, he had even instructed for raising the qualification/eligibility criteria for the madarsa teachers and making the recruitment process transparent. He also stressed on an efficient distribution of scholarships to minority students, so that more pupils could be covered under the scheme.

UP to incur Rs 9,255 crore on land acquisition for Ganga Expressway

Virendra Singh Rawat

Lucknow / Oct 22, 2020

Uttar Pradesh government will acquire 7,800 hectares of land costing Rs 9,255 crore for its flagship 600 km Ganga Expressway project.

Besides, the state is mulling to tap foreign investment/funding for the mega infra project, which is estimated to cost more than Rs 36,000 crore.

Earlier, the government had allocated Rs 1,855 crore in the Budget for the project, besides Rs 2,900 crore will be raised from the Housing and Urban Development Corporation Limited (HUDCO) to fund land acquisition of the proposed project.

In recent months, the Yogi Adityanath government had tapped the public sector banks to raise funds for the different expressway projects viz. Ganga Expressway, Purvanchal Expressway, Bundelkhand Expressway and Gorakhpur Link Expressway.

The land for Ganga Expressway will be acquired by UP Expressway Industrial Development Authority (UPEIDA) across 529 villages spanning 12 districts viz. Meerut, Amroha, Bulandshahar, Badaun, Shahjahanpur, Farrukhabad, Hardoi, Kannauj, Unnao, Rae Bareli, Pratagarh and Prayagraj (Allahabad) districts.

According to UP industrial development minister Satish Mahana, the expressway will also provide emergency landing facility for Indian Air Force (IAF) aircraft near Shahjahanpur district.

According to UPEIDA CEO and UP additional chief secretary Awanish Kumar Awasthi, some proposals related to the mega project are yet to be cleared by the cabinet. However, the agency had already prepared the draft documents to invite proposals (expression of interest) for investment or for raising more financial resources.

The agency was working out the modalities to get foreign investors/funding agencies on board for Ganga Expressway, which is projected to be the world’s longest access controlled expressway when completed.

Last month, the UPEIDA Board had decided to tap loans from the Reserve Bank of India (RBI) licensed private banking entities as well to expand the financing pool for the project.

Yogi government keeping satellite vigil on stubble burning

Virendra Singh Rawat

Lucknow / Oct 20, 2020

Even as the Supreme Court has adopted a tough stance on stubble burning in the Northern states, the Yogi Adityanath government is keeping satellite vigil on the practice.

According to UP agriculture minister Surya Pratap Shahi, the state agriculture department was keeping an eye on stubble burning in the agricultural fields through advanced satellite imagery.

The details of such field are fed in the system for taking action on the basis of stubble burning captured in the satellite images. He advised farmers to desist from the unlawful act to avoid penal action.

“The apex court and the National Green Tribunal (NGT) have already declared the burning of stubble as a crime. It also adversely impacts the physical, chemical and organic composition of the soil, while killing beneficial living organisms in the earth,” Shahi lamented.

He suggested farmers to deploy waste management techniques, including decomposer, to preserve the soil’s organic health.

Last year, between October 1 and December 10, 2019, more than 5,510 incidents of stubble burning were reported in UP, while the government took action against 218 individuals, apart from 526 government officials and employees. More than 1,867 police cases were filed and 126 accused persons arrested. The government also slapped fines totalling over Rs 2.37 crore on the accused during this period.

Recently, the SC had constituted a panel to monitor stubble burning in UP, Punjab and Haryana following an alarming rise in the air pollution level in the Delhi-National Capital Region (NCR). The one-man committee helmed by former SC judge M B Lokur will be assisted by the chief secretaries of the respective states.

Sahara India claims to have repaid Rs 3,226 crore to depositors

Virendra Singh Rawat

Lucknow / October 13, 2020

Lucknow-based business conglomerate Sahara India has claimed to have repaid more than Rs 3,226 crore to over a million depositors/investors in the last 75 days.

Out of this amount, 2.18 per cent payments were made against requests from the delayed-payments complainants, according to a company press communiqué here.

The delayed-payment complainants are 0.07 per cent of total investors, Sahara India said claiming to have 80 million investors across India.

Besides, Sahara claimed over the last 10 years, it had made maturity payment totalling more than Rs 1.40 trillion to over 57.67 million investors. “Out of this, only around 40 per cent cases are of reinvestment, the rest have been paid in cash,” the statement read. 

Meanwhile, the Group also admitted to delay in payments, attributing it primarily to the “embargo imposed for last 8 years by the Hon’ble Supreme Court. If any money is generated through selling or mortgaging assets of the group (including Co-operatives) or from joint ventures, the same has to be deposited in the Sahara-SEBI account, as per the directives of Hon’ble Supreme Court.”

It claimed the company had to date deposited Rs 22,000 crore, including interest, in the Sahara-SEBI account, whereas, despite giving four rounds of advertisements in 154 newspapers by SEBI in last 8 years across the country, SEBI has repaid only Rs 106.10 crore to the esteemed investors.

“In its last advertisement that was published a year ago, SEBI made it clear that it would not entertain any further claim thereafter. It means that for SEBI there is no claimant left. The only reason that SEBI didn’t receive any further claim was that Sahara Group had already repaid to its esteemed investors. As per the directives of the Hon’ble Supreme Court, this amount of Rs 22,000 crore will eventually come back to Sahara after due verification.”

Meanwhile, Sahara alleged some media reports “are creating the impression that Sahara is in Chit Fund business, which is completely wrong and misleading information. Sahara was never in Chit Fund business, neither in the past nor is in present. Sahara has always worked under the regulatory legal framework.”

Sahara India claimed to possess assets of market value totalling Rs 2.59 trillion and a ‘family’ of 1.4 million workers with more than 5,000 establishments.

UP revenue collection surges 10% in Sep 2020

Virendra Singh Rawat

Lucknow / Oct 7, 2020

Signalling the revival of economic and commercial activities, Uttar Pradesh witnessed over 10 per cent growth in its tax and non-tax revenues in September 2020 vis-à-vis the corresponding month last fiscal year (2019-20).

Compared to the revenue kitty of about Rs 8,444 crore in September 2019, the realisation in September 2020 stood at over Rs 9,334 crore – Rs 890 crore higher month-on-month, according to UP finance minister Suresh Khanna.

The state revenue collection had majorly dipped during the first quarter (Apr-June) of the current financial year 2020-21 following lockdown.

However, the green shoots of revival in the state tax and non-tax revenues had started to appear from July onwards with the gradual kick-starting of economy under successive lockdown periods.

The July 2020 revenue kitty of Rs 10,675 crore was nearly 97 per cent of the July 2019 collection, which the revenue was about Rs 10,926 crore. In August, the state posted 6.74 per cent growth in revenues compared to the corresponding month last year. Compared to a kitty of Rs 8,942 crore in August 2019, the collection in August 2020 stood at about Rs 9,545 crore, which was almost Rs 600 crore higher.

However, the state government is still facing a shortfall of more than Rs 12,700 crore in total revenue collection during the first six months (Apr-Sep) of the current financial year 2020-21 compared to last year, with the mop in Apr-Sep 2019-20 and Apr-Sep 2020-21 matching up to Rs 58,603 crore and Rs 45,890 crore respectively.