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.