For all its purported demographic dividend (UP has 16% of India's working youth, 20% of its child population), the youth of Uttar Pradesh is a languished lot - unemployed youth in the age group 15-35 number over 10 million (NSSO 66th round); this is in addition to the existing backlog of 32 lakh unemployed. Dismal farm economics and poor growth rate (3% - 4%, way below the state potential) has led to 49 lakh agriculture workers leaving agriculture between 2008 and 2013. For those leaving agriculture, there are few jobs - it is estimated that only 9.72% of agricultural workers are able to find decent, regular jobs. It's not that such youth are highly skilled - Uttar Pradesh has the highest primary school dropout (9 out of 100 students) amongst India's large states, while being served by few teachers (one per 39 students).
Even manufacturing, ideally the substitute for a declining agricultural base, has remained virtually stagnant, with a growth rate of 1.64%, and 86 lakh employed in 2012. Kanpur's famed leather industry is declining - from employing a million workers in the 1990s to around half that now; this is reflected by the closure of 176 of an estimated 400 leather tanning units in the last 10 years. Given this state, most tend to prefer applying for government jobs - advertisements for 368 vacancies for peons (with an average salary of Rs 20,000) in the UP Secretariat had 23 lakh applicants, including 24,969 PhDs and 1.5 lakh graduates.
Other jobs don't pay much either. Those seeking to be plumbers and blacksmiths have to make do with just Rs 385.71 and Rs 326 per day, much less than wages in other states (Ministry of Labour and Employment, 2016). It is no surprise that Uttar Pradesh leads on the number of poor in India, containing 73.79 million, 21% of India's total.
Despite the state's potential, investments in ancillary agricultural activities remain limited, with food processing, dairy and horticulture remaining far below the state's potential. Around 30.1% of the state's households have monthly earnings less than Rs 5,000 (Labour Bureau, 5th Annual Employment Survey).
As a consequence, serious crime has shot up in Uttar Pradesh in the last decade, rising from 75 incidents per million of population in 2005 to 140 per million in 2015 (CMIE, 2015). Disaggregating this data highlights that incidents of rape rose six-fold - from 7 per million in 2005 to 30 per million in 2015 (CMIE, 2015) while kidnapping has scaled up from 16 per million in 2005 to 56 per million in 2015. Meanwhile, the state's police force has been starved of investment - there are just 1.8 lakh police personnel available to cater to Uttar Pradesh's ~210 million people. The state has the highest number of women abductions in the country (~10,000 per year), while being second highest in terms of rape cases; there is ~1 rape every 17 minutes. And there remains significant political interference - there have been 8 DGPs between 2012 and 2015.
From a socio-environmental perspective, the state has had some signs of mixed progress. There are more women attending educational institutions, with 55.52% of all women in the 15-19 year age group attending, compared to just 28.35% in 2001. However, when considering health, this picture has gotten worse. While the population has risen by 25% in last 15 years, the number of primary healthcare centres (PHCs) have decreased by 8%. With 62% of pregnant women unable to access minimum ante-natal healthcare, UP registers India's second highest maternal mortality rate.
Meanwhile, about half of Uttar Pradesh's kids are not vaccinated, and a similar number (50.4%) register stunted growth (highest in India - national average at 38%) (Rural Health Statistics, 2015). About 43% of UP's children are underweight (UNDP, 2016) at a time when the NRHM Scam has been reported, leaving people with no health facilities in rural areas. Such shambolic infrastructure has mobilised people towards private healthcare, leading to higher costs: the average cost of treatment in UP is Rs ~660/person, double the national average of Rs ~312/person (Ministry of Statistics, 2016).
Even on an environmental front, Uttar Pradesh has failed to cater to its social obligations. According to official data, 23 habitations in Uttar Pradesh, with 42,231 citizens, are affected by iron-based poisoning of water, while a further 92 habitations, with 53,075 citizens, are affected by increased salinity in their potable water (Lok Sabha Unstarred Question No. 860).
Changing this will require a bottom-up approach. To mitigate the agrarian crisis, the state government should bolster financing for marginal agriculture, while simplifying benefit provision (PD Jeromi, 2006), which shall provide increased transparency on property rights, while utilising satellite imagery and drones for documenting crop damage and disbursing appropriate compensation. It is important to make mechanisation work for smaller farmers as well, particularly through the Custom Hiring Centre route.
For supporting job growth, reinvigorating SMEs is key. Financing remains troublesome. While the Credit Guarantee Fund was meant to facilitate credit flow without collateral, banks continue to insist on collateral for loans below Rs 1 crore. We will need an encouraging incentive-based policy framework that creates supporting infrastructure and prunes regulation, along with providing financing mechanisms and incentives. Within new upcoming industrial corridors, MSMEs should be allocated at least 33% of all land available at discounted rate slabs, helping them start business ventures at affordable rates. Flatted Factory Complexes and dormitories might be set up, around large cities for MSEs on PPP mode. Uttar Pradesh's current procurement policy is neutral, typically mandating ~20% of all annual Ministry/Department/PSU procurements from SMEs. This needs to be more pronounced. The public procurement policy could be utilised to enlarge markets for MSMEs, with incentives for vendor development to provide support for technology absorption. Development-focused banking has a limited appeal, with banks still averse to giving out loans to SMEs. The state can help bridge the gap on financing in such cases.
Spending on education and skill-building needs to increase significantly. Funding for greater provision of school buildings and digital education and a Vocational Education Broadband Network should be provided. A Smarter Schools National Partnership, focused on improving teacher quality and learning outcomes, along with Trade Training Centres and Teach For India in secondary schools, would improve skillsets from a young age. Tuition loan schemes need to be vastly expanded to enable financially challenged students attend best-in-class universities.
It is important to consider basic income as well - a pilot project targeting 6,000 individuals in Madhya Pradesh presents intriguing results. Most villagers used the money on household improvements (latrines, walls, roofs) while taking precautions against malaria - 24.3% of the households changed their main source of energy for cooking or lighting; 16% of households made changes to their toilet. There was a seeming shift towards markets, instead of ration shops, given better financial liquidity, leading to improved nutrition (20% increase in z-scores), particularly amongst SC and ST households, and better school attendance and performance (Guy Standing, 2014). Financial inclusion was rapid - within four months of the pilot, 95.6% of the individuals had bank accounts. Within a year, 73% of the households reported a reduction in their debt. There was no evidence of any increase in spending on alcohol. A regular unconditional basic income, scaled up through pilots, and rolled out slowly and carefully, seems ideal for Uttar Pradesh - it can help institute rational responses to illness or hunger, enabling households to fund their health expenses instead of encountering a vicious cycle of debt. It can help reduce child labour, while facilitating an increase in school spending.
Battling decades of underinvestment in healthcare will require considering bigger steps at the state level. Healthcare insurance coverage is abysmal in Uttar Pradesh, with just around 25% of the population covered. To achieve universal access, a coverage ratio of around 75% needs to be targeted, with the remainder offered access through government payments. Access with low, out-of-pocket spending can be achieved through an expansion of healthcare insurance, with the government playing a payor or guarantor role instead of providing services.
Kanpur, of all of UP's cities, reflects this dismal picture. At independence, Kanpur was one of India's leading cities, with its first electric tram installed in 1907, and India's first textile company, Elgin Mills, opened up there in 1862. Post-independence, textiles went into a steep decline, discouraged by large-scale nationalisation and commodity price changes. Its population has declined by 9% in the past decade, affected by a consolidation in the leather industry.
Reviving this great state requires rebuilding its roots - investing in primary education and healthcare, establishing a rule of law, and invigorating its great brands - its once-famed universities, its agriculture processing sector and textiles industry. With careful diligence and a conscious choice, UP's voters can change their socioeconomic condition, ushering in a new era of propriety.
(Feroze Varun Gandhi is a member of the BJP and a two-time member of parliament.)
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