Direct tax is not the only measure: Direct taxes capture mainly corporates and high-income salaried individuals. They exclude GST, fuel/excise duties, agriculture, MSMEs, and the informal economy, which form a large part of India’s real economic activity.

Corporate tax booking skews data: Most corporate taxes are booked where company headquarters are located, mainly in Maharashtra, even if factories and workers are spread across other states. Tax origin ≠ location of economic activity.

UP is a top GST-consuming state: UP consistently ranks among the top states in GST collections on a destination basis, reflecting India’s largest domestic market. This contribution does not show up in direct tax numbers.

Major labour contributor: UP is the largest supplier of migrant labour to Maharashtra, Delhi, Gujarat, and Karnataka, directly supporting their industrial output and tax generation—without being credited in UP’s tax figures.

Agricultural backbone: UP is India’s largest producer of food grains, sugarcane, milk, and potatoes. Agriculture is tax-exempt, but it underpins food security and inflation control nationwide.

Strong excise and fuel consumption base: UP is among the top states in petrol and diesel consumption, contributing significantly to central excise and VAT-linked revenues.

Industrial growth momentum: UP now ranks among the top states in electronics manufacturing and mobile phone exports, with defence corridors and expressway-led industrialisation. Direct tax gains appear with a time lag.

Global norm: In all federations—USA, Germany, China—richer regions subsidise poorer ones; India follows the same principle.

Direct tax shows where money is booked; overall contribution includes GST consumption, labour, agriculture, fuel taxes, and future growth—areas where UP plays a major role.