New Delhi,(Asian independent) Uttar Pradesh appears headed for a tipping point, scripting a success story as it recognizes and reaps the opportunities sweeping New India, working on key enablers to attain a sizable economic order, a report by the Economic Department of State Bank of India has said.
The completion of Ram Mandir in Ayodhya and multiple initiatives taken by the UP government to promote tourism could result in an additional tax revenue of up to Rs 25,000 crore per annum due to spurt in tourists in FY25.
With the Indian economy scaling to $5 trillion by FY28 as it defies gravity to clock growth rate in excess of 7 per cent despite exogenous headwinds, many of Indian states could gather significant scale. UP is estimated to have the second most weightage in Indian GDP by FY28 and its GDP could overtake Norway, the Scandinavian country with second position in Human Development Index (HDI).
The state has taken visible strides on the export front, clocking CAGR of 7.1 per cent in growth between FY2013-23 (against national average of 4.1 per cent), doubling its export kitty with a 5 per cent cumulative share nationally even as it becomes the sixth state in rankings.
Uttar Pradesh has also been fuelling the wealth creation through capital markets, adding maximum number of new investors during activity filled FY20-24 as its share vaults in excess of 10 per cent as per bourses/depositories data. Incidentally, the state’s share in AUM of MF has also increased at a higher rate than all India in the last five years.
Based on the CBDT data, UP has been instrumental in increasing the tax base with the highest number of taxpayers, a trend reversal from other states, the report said.
With holiest places/shrines of worship dotting the vast landscape, UP has seen domestic tourism increasing at a breath neck pace. Estimates by the state government put the number of tourists visiting the state at around 32 crore in 2022 (around 2.21 crore footfall in Ayodhya alone) with their expenditure exceeding Rs 2 lakh crore. Additionally, spending by foreign tourists (the state ranked 5th in number of foreign tourists visiting India) was around Rs 10,500 crore, the state seems poised to reap the benefits from the tourism boom.
Given the completion of Ram Mandir in Ayodhya this year and a melange of initiatives taken by the UP government to promote tourism, we believe that the total expenditure by tourists (domestic + foreign) in UP may cross Rs 4 lakh crore mark by end of this year helping the state government earn an additional tax revenue of Rs 20,000-25,000 crore due to huge spurt in number of tourists during FY25.
Pre-Pandemic (2019), India’s share in international tourism receipts was a meagre 2.06 per cent with a distant ranking of 14th. Even in the Asia-Pacific region, it commanded just 7 per cent share with a 6th rank, the report said.
