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U’khand’s Socio-Economic Development Challenges

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By Anil Raturi

In the year 2000, when the State of Uttarakhand was created, some experts had expressed their doubts about its economic viability.

Their view was that the State had a very limited resource potential. According to them, the future prospects of Chhattisgarh and Jharkhand (the other two states created during the same period) were far brighter as they were potentially endowed with better resources.

Since then, Uttarakhand has come a long way.

In the last two decades, its GSDP has increased 18 fold! (From

Rs 15,285 crores in 2001 to Rs 2,65,488 crores in 2021-22 [PE]). The per capita income too has increased 13 times! (From Rs15,285 in 2001 to Rs 2,05,840 in 2021-02) and the Poverty Ratio has significantly declined from 32.7% in 2000-01 to 9.2% in 2020-21. Today, the per capita income of Uttarakhand is not only better than the National Average, is also better than that of Chhattisgarh, Jharkhand and UP (of which it was formerly a part). A remarkable feature of this period has been the establishment of an industrial belt in the plains of the State under the aegis of the State Industrial Development Corporation, SIDCUL.

In the backdrop of such dire predictions imagined at the time of the State’s inception, its achievements today are indeed praiseworthy!

In its first decade, the State’s economy grew at a promising rate.

However, in the second decade, for various reasons, the growth rate witnessed a decline (CAGR 2000-2010 was14.90% but from 2011-2021 it was 4.53%, even if the initial base was small the drop in the second decade is still significant). The Kedarnath natural calamity in 2013 and the onset of the Pandemic in 2020 also impacted the economy adversely. Unfortunately during this period, the State has also manifested some regional imbalances in its Socio-Economic Development.

Most of the growth has taken place in the plains. Consequently, lesser employment opportunities are available in the hill areas. This has exacerbated the trend of outward migration of people from the hills. The State “Palayan Ayog” data indicates that, in the last few years, about 1,18,981 people have migrated out of the mountains. Even in the plains there are indications of uneven development. Socio-Economic indicators for the rural areas of Haridwar and Udham Singh Nagar districts exhibit a comparative lag vis-a-vis the State average. The Niti Ayog has included these two districts in the National list of “Aspirational Districts”.

Some challenges need prompt policy interventions in order to set the Economy back on the right track.

First, the declining growth rate needs to be addressed. As a strategy, a more aggressive approach in the Agriculture sector could be useful, because for various reasons it has underperformed and its growth rate has been dwindling. The immense horticulture potential of the hills too remains untapped. Farming of appropriate cash crops in the hills with suitable support from the government can go a long way in providing income to farmers in this sector. This will reduce the outward migration as more people will be gainfully employed in the mountains. It will also provide the much needed fillip to the Economic Growth.

Secondly, the issue of unemployment should be addressed urgently. About sixty percent of the State’s population is between the age of 15-59 years. Of this, about 2,06,783 people are employed in the Government or its ancillaries. About 98,703 people are employed in the Private Organised Sector. More than 29 lakh people are working in the Unorganised Sector and 8,39,697 people are registered in the Employment Exchanges. From the figures it is obvious that it is not possible for the Government to provide employment to all the job seekers. Therefore, encouraging self employment through creation of suitable opportunities, skill development, easy financial loaning by Banks is the only path available.

The State has an immense potential for tourism. In order to multiply the gains from this sector, there is a need to target “high end” tourism over and above the traditional pilgrimage based tourism. To achieve this, the airports at Pantnagar, Pithoragarh, Gauchar and Chiniyalisaun should be quickly developed. Reliable and efficient fixed wing commercial air connectivity can transform the tourism sector and provide employment to a large number of people. Government initiatives like “Veer Chandra Singh Garhwali” and “Deendayal Upadhyay” schemes for establishing Guest Houses, Homestays and buying taxis should be encouraged to create both self employment and growth.

Thirdly, the State needs to augment its own Revenue. Its gains from Hydro-power, Forests, Aromatic plants and Mining are sub- par. For instance, in the last two decades only about 340 MW could be added to the installed capacity. Due to this and the transmission cum distribution losses it has not been possible for the State to meet its own electricity demand, compelling it to buy it from outside at exorbitant prices. These sectors were supposed to be Uttarakhand’s strength. Therefore, a serious effort is urgently required to materialise the potential gains from them.

Lastly, the State should continue to ensure that its development path is environmentally sustainable. It is commendable that in 2020 the Niti Ayog declared it 4th amongst the Indian States for its performance in Sustainable Development Goals (SDG).

About 70 percent of the State’s land falls under the Reserve Forests which tends to constrain its development potential. The sources of the great Ganga and Yamuna rivers are also in the Uttarakhand Himalayas. The huge population of the North Indian plains is dependent on these rivers. Therefore, it is necessary that the catchment of these rivers in Uttarakhand should be protected from environmental and ecological degradation.

It would be fair to compensate the State for this annually by way of a Green Bonus. The Government of India and the States through which these rivers flow should contribute to this fund so that Uttarakhand can offset its potential losses as a result of the environmental protection work that it performs.

(Anil Raturi is a retired IPS Officer and served as DGP, Uttarakhand).