The Federation of Indian Micro, Small and Medium Enterprises further said that the state-public sector undertakings (PSUs) do not source products from UP's MSME sector and prefer sourcing them from other states.

"Chief minister of Uttar Pradesh could not find time even once during her five-year long tenure to meet representatives of the three MSMEs in the state that provide direct employment to more than six million people," its president V.K. Agarwal said. "The state PSUs take pride in closing their doors to state industries and prefer sourcing goods and services from across the UP borders."

The president continued that in comparison, states such as Rajasthan, Tamil Nadu, Gujarat have erected barriers to protect and promote their own manufacturing base.

Agarwal said that if the situation does not improve, many MSMEs are planning to move out as their businesses are becoming unviable in the state.

"Industries that could afford it have already moved out of UP and many are likely to follow suit as they are increasingly becoming unviable in many sectors due to such utter negligence and complete indifference towards the needs of industry," Agarwal said.

"We keep comparing ourselves to China but that country has become a manufacturing powerhouse only because of the importance that their government accords to the small and medium sector," Agarwal said.

Agarwal added that MSME sector has the potential to provide jobs to millions of young people who will be added to the workforce.

"The Planning Commission finds manufacturing to be the fountain-head of new jobs in the coming decades. If this is to happen, FISME feels the next government in Uttar Pradesh has to actively engage with manufacturing MSMEs on an ongoing basis."