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Political instability hurting UP's economy: WB

Once one of the most promising states of India, Uttar Pradesh has now lost the economic momentum due to political instability and the resultant ineffectiveness of the public sector while the number of its poor is much higher than the national ratio, the latest World Bank report has said.

"Economic growth in UP faltered in the 1990s and the state has fallen behind India's better performing states," the report 'Poverty in India: The Challenge of Uttar Pradesh', released on Thursday, said.

At the heart of the state's loss of economic momentum is the loss of effectiveness of the public sector, which has led to an investment climate not supportive of private investment and growth and poor performance in the delivery of social and infrastructural services essential for growth and poverty reduction, the report said.

"UP's continuing political instability dating back to mid 1980 has contributed to the growing politicisation and undermined the effectiveness of the administration," it said, adding thus eroding the stability of tenure and undercutting managerial authority.

The report further said, administrative fragmentation has led to a proliferation of senior positions and undermined coordination and accountability in administration as well as policy making.

A related expansion in the size of the civil service, combined with weak revenue generation placed a squeeze on the capital budget as well as spending on operations and maintenance and poor expenditure management practices have undermined the efficacy of public spending for combating poverty in the state, it said.

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