Increasing Non-Farm Employment in Uttar Pradesh, India

Uttar Pradesh has a huge upside potential for economic growth if its people are engaged more productively. This study cursorily reviews the prospects of employment creation and argues that UP should focus on the secondary and tertiary sectors for generating self-employment opportunities. In this regard, growth diagnostics framework, developed at Harvard University, is used to analyse the possible constraints that may be impeding the entrepreneurship in the state. Based on secondary data analysis and wider consultation with many stakeholders, study provides observational conclusion that ‘access to finance’ can be a major constraint in growth of enterprises. This constraint is channelled through high-risk perception and aversion for microentrepreneurs from supply side of finance. Additionally, other constraints such as coordination, infrastructure, lower desire for entrepreneurship among youth are also weakly identified. The study concludes with offering focused recommendations to deal with the identified obstacles in a systemic way, hitting their root causes