Uttar Pradesh’s Economic Transformation Under Yogi Adityanath: From BIMARU to India’s Second-Largest State Economy

In a dramatic economic turnaround over the last eight years, Uttar Pradesh has emerged as India’s second-largest state economy under the leadership of Chief Minister Yogi Adityanath. Taking charge in 2017, when the state’s economy stood at ₹12.88 lakh crore, the Yogi government has more than doubled it to ₹27.51 lakh crore without imposing any new taxes. The administration is now actively pursuing the goal of pushing the Gross State Domestic Product (GSDP) beyond ₹30.77 lakh crore in the ongoing financial year.

Chief Minister Yogi Adityanath has consistently highlighted the widespread corruption and systemic loot that plagued previous governments, where public funds were frequently siphoned off by a select few. In stark contrast, his administration has placed a strong emphasis on good governance, fiscal discipline, and transparent policymaking. These efforts have not only stabilised Uttar Pradesh’s financial condition but also paved the way for unprecedented economic growth.

Historically labelled as an underperforming state, Uttar Pradesh’s economic output between 1950 and 2017 remained stagnant at ₹12.75 lakh crore. The sharp growth seen under Yogi Adityanath’s tenure has redefined this trajectory. Today, Uttar Pradesh contributes 9.2 percent to the national GDP. In the financial year 2023–24, India’s overall GDP grew at a rate of 9.6 percent, while Uttar Pradesh exceeded expectations with an impressive 11.6 percent growth rate—demonstrating that the state has become a key driver of national economic expansion.

Before 2017, the state government struggled to pay employee salaries on time and faced chronic delays in infrastructure and welfare projects due to budgetary constraints. Today, Uttar Pradesh has not only emerged as a revenue-surplus state for five consecutive years but has also achieved this feat without burdening its citizens with additional taxes. This transformation has been made possible by improving tax compliance, plugging revenue leakages, and embracing large-scale digital reforms. These reforms have enhanced transparency in financial operations and led to more efficient revenue collection mechanisms. Notably, Uttar Pradesh has achieved this while still maintaining the lowest petrol and diesel prices in the country.

Embracing Prime Minister Narendra Modi’s “Digital India” vision, Chief Minister Yogi Adityanath placed digital governance at the heart of his administrative reforms. Uttar Pradesh has become a national leader in digital transformation. By December 2024, the state had already completed over one billion digital transactions in the 2024–25 financial year, with the Unified Payments Interface (UPI) accounting for the majority. The government’s efforts to improve internet connectivity in rural areas, promote digital literacy, and increase access to devices have been instrumental in this transformation. Simultaneously, the use of Direct Benefit Transfer (DBT) has eliminated intermediaries and significantly reduced corruption. Financial aid from 207 schemes across 11 departments, including 113 central government schemes, is now directly credited to beneficiaries’ bank accounts. In the current fiscal year alone, more than ₹1 lakh crore has been transferred to over 9 crore beneficiaries, saving the government nearly ₹10,000 crore.

The Reserve Bank of India (RBI), in its 2024–25 report on state budgets, praised Uttar Pradesh’s fiscal discipline. It noted that the state’s share of self-generated tax revenue had risen steadily to 11.6 percent over the last three years, making it the second-best performer among all Indian states. Furthermore, while the average own-tax-to-GDP ratio across states fluctuated between 6.5 to 7.2 percent, Uttar Pradesh consistently outperformed these benchmarks by recording 7.6, 9.8, and 10 percent in successive years. These figures reflect the government’s strong focus on tax mobilisation and fiscal prudence.

The first three years of Yogi Adityanath’s tenure were dedicated to rebuilding the state’s economic foundation and restoring law and order. The crackdown on organised crime and mafia elements, which previously deterred investors and stifled growth, has significantly improved the state’s investment climate. As a result, industries have flocked to Uttar Pradesh, drawn by its improved infrastructure, efficient governance, and stable law-and-order situation. The influx of investments has positioned Uttar Pradesh as a prime destination for industrial growth, contributing significantly to India’s economic rise.

Equally notable has been the rise of religious tourism as a new engine of economic activity in Uttar Pradesh. Once dismissed by critics, cities such as Ayodhya, Kashi (Varanasi), and Mathura have witnessed a massive surge in tourism, invigorating local economies. The successful hosting of mega-events like the Mahakumbh, combined with international recognition of the “UP Model” at the United Nations, underscores the scale and credibility of the state’s transformation.