Investing In Yogi

CHIEF MINISTER YOGI ADITYANATH MET SOME TOP 20 Indian industrialists just weeks before the three-day Uttar Pradesh Global Investors Summit (UPGIS) 2023, which was held from February 10 to 12. His mission was to reassure them that the state on his watch was no lon­ger the Wild West-like land of guns and violence it once was, and that the transformation was for real. He had inherited anarchy and a laggard state notorious for its dreaded nexus between politics and crime which fed on each other. He had to take tough measures to rapidly change the most populous state in the country to a turf tailormade for investment and industrialisation. It was no smooth sailing, but fruitful in the end. The time had come to reap the benefits of the tough grind. That was why the chief minister met these captains of industry one-on-one, and he wanted each one of them to make the most of the new opportunity. He also wanted to personally vouch for efficiency and the ease of doing business. Unsurprisingly, it didn’t take him too long to win them over and, as luck would have it, following the invigorating chat with the chief minister, these tycoons hastened to bring up new plans that were not earlier part of their pitch.

Kumar Mangalam Birla, chairman of the Aditya Birla Group, would later talk of a meta­morphosis in Uttar Pradesh (UP). Far from the one conjured up by Franz Kafka, this wasn’t dark but entirely welcoming. When he met Yogi Adityanath initially, his plans were not as big as the ones he would announce later. He wanted to get aggressive in food processing and expand other businesses there. That was all. It was Adityanath who asked him about his interest in solar power besides logistics and others. The stress on renewable energy, es­pecially solar power, was not a perfunctory one, the billionaire realised. The chief minister told Birla that he has plans to turn Ayodhya, where Lord Ram was born into the Ikshvaku dynasty founded by Ikshvaku who is believed to be the son of Lord Surya, into a predomi­nantly solar-powered city. He also reminded the corporate honcho that Ram was also called Suryavanshi. Just as there was symbolism, Adityanath wanted to project his programme as a metaphor for sustainable growth. Birla did not need much persuasion to agree to invest in the idea of a solar township in Ayodhya.

Similar was the experience of most top Indian businessmen who zealously bought into the idea of a ‘New UP’. They included the likes of Mukesh Ambani, Kumar Mangalam Birla, Ajay Piramal, Sanjiv Goenka, Sajjan Jindal, Jinal Mehta, Darshan Hiranandani, Sanjiv Bajaj, and others. All of them shared the view that UP isn’t the UP of the past and that it has been largely purged of corruption, especially in the top echelons of state power. President of the Confederation of Indian Industry (CII) and Bajaj Finserv Ltd Chairman Sanjiv Bajaj was also quoted in a report as saying that Adityanath’s vision was an ex­ample for sustainable and inclusive development. During his meetings, the chief minister had assured each one of them that they would have to deal with nobody else but the chief minister’s office (CMO) if any hurdle arose. In this year’s high-powered business summit, 19,058 MoUs worth ₹33.50 trillion were signed between the state government and investors. The actualisation rate had been pretty high in the last summit of 2018 that saw proposals worth ₹4.68 trillion, of which over 75 per cent came to fruition. The state government expects the rate of actualisation to be higher this time round.

Such attention to detail that Adityanath displays has cata­pulted him as a moderniser, a big departure from the way he was viewed earlier by some of his sceptics and political rivals. That he means business is a relief as well as an incentive for even smaller businessmen that Open spoke to. Government officials argue that such a change in mindset is an outcome of years of hard work and late nights, and that there was no magic wand. “Yogi is a no-nonsensical ruler and he wants to ensure huge growth that can generate money for an overall development of the state,” says a senior official who works closely with him. The most conspicu­ous change now is the cutting of the red tape, a bane of most of the developing world. Besides, among the top priorities of the chief minister is a crime-free state whose law-and-order record of the past was the biggest impediment to any development.

Those dashboards at the CMO reveal the dexterity at work. Each project, ongoing as well as new, has nodal officers in charge and therefore no businessman has to run from pillar-to-post to get clearances. To review the progress of MoUs signed between the government and business groups as well as each new project, there are weekly meetings. To top it all, to boost industry friendliness, the state government has put in place 25 sectoral policies to ease the launch of new projects. Ahead of this year’s global summit, the state organised ‘roadshows’ in 16 countries to engage with the busi­ness communities there. Adityanath said later that such events were extremely helpful in attracting investments.

The starkest display of change from the old, lazy and arbi­trary ways of governance is most visible at the 5 Kalidas Marg residence of the chief minister. There are no battalions of lay­abouts smoking beedis outside. Nor are there traffic chaos and congestion outside with drivers of fellow politicians haggling over parking. Hangers-on and typical sly sidekicks no longer dart in and out. The antediluvian stereotype of the corridors of power in Lucknow is a thing of the past. If you get an interview slot, chances are yours is most likely the only car heading towards the chief minister’s home. The clutter has been defenestrated, much to the delight of those who valued their time. A realistic business­man cannot be faulted for sensing a feeling of ‘to get rich is glori­ous’ around there. Adityanath emphasises sustainability and welfare too, but then somebody needs to help generate money to fund such schemes. He is not ready to wait. He is a man in a hurry, as he was from the moment he took over as chief minister in 2017. From being a typically squalid road in a north Indian provincial outpost, Kalidas Marg has now acquired a Delhi-like cosmopolitan halo. And Yogi has turned out to be a leader who has disappointed all those who have had the disadvantage of underrating him as a hard-nosed ruler.

Contrast this scene with 1 Aney Marg in Patna, the official residence of the chief minister of Bihar where, according to people close to the matter, Nitish Kumar spends his time mostly with his select team of loyalists who chat idly, sipping excessively sweetened tea and tucking into snacks, most often puffed rice. Former close associates of Kumar often recall that there is noth­ing called dynamics in the corridors of power in the neighbour­ing state which, once upon a time, was part of the BIMARU cat­egory of underperformers. Bihar is still stuck there, having made only relative and incremental changes in governance from the Lalu Prasad era. Businessmen who had to flee when Prasad took the reins decades ago are still not keen on returning because rent-seeking reportedly is the name of the business there.

YOGI ADITYANATH STARTED with the disadvantage of being stereotyped as another UP chief minister surrounded by people with clannish interests, reflective of the Samajwadi Party (SP) and Bahujan Samaj Party (BSP) dispensations of the past. Their successive tenures saw the feudal elites of yore being replaced by the new privileged lot. The government was run by people who ensured that their kith and kin, party workers and criminal associates walked away with impunity. A few com­mentators had described the state under the yoke of various community interests as marked by lawless law.

Anyone who has watched the UP of the past cannot be fault­ed for wondering at the confidence that businesses of all hues, from billionaire-run ones to traditional SMEs, bankers, and aspiring entrepreneurs now have in the ‘New UP’. For them, everything looks surreal.

The real story lies in the numbers and also in the speed with which cities in UP are connected within and to metros outside.

According to statistics, over the last five years, UP has seen a marked rise in infrastructure development and connectivity net­work, alongside investments in these sectors. Working at an un­precedented pace compared with earlier years, UP, home to one of the largest National Highway networks in the country, now has 13 new expressways of which six are fully completed (1,225 km) and the remaining seven in various stages of development. Anyone who drives through the state is amazed by how much time they can save to travel from one city to another, be it from Delhi to Agra or Agra to Lucknow or Lucknow to Allahabad.

Investing heavily in infrastructure is also being done in an innovative fashion. Close to 1,100 km of the country’s first inland waterway—connecting Prayagraj to Haldia port—is already op­erational in the state, as per latest data. According to official docu­ments, a multi-modal terminal in Varanasi and various floating terminals are operational along the NW-1 (National Waterway 1) at Ghazipur, Rajghat, and Ramnagar (in Varanasi) and Praya­graj terminals. “Also, India’s first ‘freight village’, spread over 100 acres is coming up at Varanasi. Connecting the exporting hubs of Eastern Uttar Pradesh to the ports of east India, the village will serve as a trans-shipment hub for inbound and outbound cargo,” government reports reveal.

UP will soon be the first state in India to have five international airports. The existing ones include those in Lucknow, Varanasi and Kushinagar. New such airports are coming up in Jewar and Ayodhya. “Seven airports have been made operational under Regional Con­nectivity Scheme (RCS) for domestic con­nectivity, and another eight airports are in the pipeline,” say reports.

An official who has worked with mul­tiple chief ministers avers that infrastruc­ture development, besides the creation of a conducive environment for investors, has never been this diligent and fast in the past. “In addition to hosting the larg­est railway network (more than 16,000 km) in the country, the state is home to a considerable portion of Western Dedi­cated Freight Corridor (WDFC) and East­ern Dedicated Freight Corridor (EDFC),” according to an official document. UP is also doing phenomenally well on the logistics front.

UP did not achieve its current status in ease of doing business suddenly. As mentioned earlier, it had to implement 500 reforms spread across more than 25 departments in multiple areas, such as labour regu­lations, inspection regulations, land allotment, property registra­tion, environmental clearances, paying taxes, etc, according to official documents. It also slashed more than 3,500 compliances, repealed more than 900 rules and orders, and decriminalised 569 compliances under the ‘Minimising Regulatory Compliance Burden’ initiative of the Government of India. In an interview to Open, Adityanath has talked about other initiatives, too, especial­ly a new online system called ‘Nivesh Sarathi’ for “signing MoUs and monitoring their implementation, as well as an online Incentive Manage­ment System” (see interview).

Many of the great leaps UP has made have been in the shadow of the Covid-19 pandemic. Open had earlier written about how the chief minister managed the health crisis and migrant inflows (‘What Yogi Did Right’, July 19, 2021). After all, a robust UP economy makes a huge difference to the whole of India. It is a sizeable market and contributes about 8 per cent to the national GDP— and the state hopes to see the figure rise. UP comprises several million-plus ur­ban centres and seven of its cities have more than one million people. A Delhi-based government official tells Open: “Uttar Pradesh transforming itself to a centre that attracts huge investment is extremely cheerful news for the whole of the country. While they are making Herculean efforts to hard-sell their traditional products, several goods and services from elsewhere in the country will also find a huge market in that state.” UP has set a target of contributing $1 trillion by 2027 to the national GDP which is expected to touch $5 trillion by then.

The chief minister, for his part, takes tremendous pride in breakthroughs he has made in skilling people to enhance the demographic advantage of the state that elects 80 MPs to Lok Sabha and 31 to Rajya Sabha. The officials are also thrilled to talk about ‘Nivesh Mitra’, the single window portal that provides 353 services of 29 departments to industries. It is integrated with the National Single Window Portal.

According to an official document, “The government has also focused on creating a land bank for industries across the state while earmarking areas for sector-specific industries. This includes the Defence Industrial Corridor on 5,000 hectares of land; Integrated Manufacturing Clusters at Agra (1060 acres) and Prayagraj (1139 acres); Medical Device Park over 350 acres at GB Nagar; Integrated Township (IIT GNL) at Greater Noida; Toy Park (52 acres), Apparel Park (118 acres), Handicraft Park (40 acres), Logistics Hub (Tappal- Bajna); Film City; Mega Leather Park Unnao the country’s 1st leather park, spread over 42 acres of land; Mega Food Park at Bareilly (246 acres); Agro Park at Varanasi (259 acres); Trans-Ganga City Unnao (1149 acres); Flatted factories at Lucknow, Kanpur, Agra, Ghaziabad, Gorakhpur and Aligarh and so on.”

NOTABLY, THE STATE government is building so-called Inte­grated Manufacturing Clusters along several expressways. More expressways are coming up connecting Lucknow to Kanpur; Meerut to Prayagraj (Ganga Expressway); Varanasi to Kolkata via Ranchi; Go­rakhpur to Siliguri, and so on. The state has ambitious plans in other sectors, such as cement manufacturing, defence, freight transport, etc. The focus of the new investment, Adityanath has maintained, will be majorly on the following sectors: manufacturing, energy and renewable energy, sport, food processing, dairy, e-vehicles, textiles, tourism, electronics manufacturing, industrial parks, and hospitality.

As regards tourism, UP has a clear edge over other states because of its history and heritage. It is home to two places considered the birthplace of Ram (Ayodhya) and Krishna (Mathura). It is also the land of key venues from the Indian epics, some of which are pilgrim­age centres and then there are holy rivers, ancient cities that beckon people from far and wide. It also houses 24 crore citizens. A Delhi-based tourism ministry official says that the tourism potential of the state is so enormous that there is much to be still tapped—from the Taj Mahal to centres of interest to religions other than Hinduism as well. “That backward areas of Purvanchal and Bundelkhand are being developed is a sign that UP will continue to be an attraction for all kinds of people, including tourists and high-profile inves­tors,” he adds.

Again, among the ambitious projects to showcase UP for the world is the ODOP (One District One Product) scheme in which the state is pulling out all the stops to brand district-specific, traditional products for global consumption.

As the chief minister triumphantly forges ahead with his endeav­ours to refurbish his state and turn it into an economic powerhouse, the feather on his cap is his resolve to root out organised crime. More business groups, including the RP-Sanjiv Goenka Group, which owns Open, have agreed to invest in the state. The RP-Sanjiv Goenka Group will spend ₹10,000 crore to set up businesses in the state, including in renewables, power distribution, retail, and sport.

To give Yogi Adityanath his due, his all-out bid to overhaul the image of UP has paid off. As a businessman quizzed by Open says, “From an image deficit, there is now an image surplus.”

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developmentGDP growthinvestmentUP Chief ministerurban infrastructureYogi Adityanath