Gujarat Model: A role-model or a disaster?

 

Ever since Narendra Modi became Gujarat’s chief minister in 2001, Gujarat model is touted as the role model of development for the entire country because of its gleaming roads, good power supply, multiplexes, air-conditioned malls and off course, a relatively high Gross State Domestic Product (GSDP) and eventually a higher per capita income makes it for the policymakers to tout a vibrant Gujarat model that must become the national model of growth and development.

While it is true that this large state, located on the western coast of India, having the longest coastline of 1,600 km in the country is one of the high growth states in the country with its average annual GSDP growth rate of Gujarat from 2004-05 to 2015-16 was 12.02 per cent that has achieved the distinction of being one of the most industrially developed states and contributes about a quarter to India’s goods exports, it is not the achievement of the BJP Government under the leadership of Modi as its chief minister from 2011 to 2014, but a legacy of previous regimes that just got furthered during his regime as the following table clearly shows it that  mentions the GSGP growth rates only for the years when in clocked more than ten per cent:

State Domestic Product (SDP) in Gujarat: 1969-to to 2010-11
Year Rs. in Crore Annual Rate of Growth
1969-70 997 10.04
1970-71 1150 15.35
1973-74 2202 22.33
1975-76 2439 28.50
1981-82 8205 25.32
1983-84 11280 30.06
1986-87 14022 15.86
1988-89 19496 40.18
1990-91 241.20 12.86
1992-93 35018 34.33
1993-94 39190 11.91
1995-96 72182 13.45
1996-97 86414 19.33
1998-99 105443 13.42
2003-04 149598 14.77
2005-06 173654 13.44
2007-08 213092 12.49
2007-08 281273 11.00
2009-10 330671 10.10
2010-11 365295 10.47
Source: Socio-Economic Review, 2011-12, Budget Publication No. 34, p: 33.

Even a cursory glance at the table will make anyone see and realize that Gujarat has always been a high growth state, hitting as high as 40.18 per cent mark in 1988-89!

In fact, during it registered much higher growth rate during the Congress chief ministers as it was:

1981-85 Madhavsinh Solanki 16.29
1985-90 Madhavsinh Solanki, Amarsinh Choudhary 13.63
1990-94 Chimanbhai Patel/Chhabil Das Mehta 16.73

And, just!

2001-04 Narendra Modi 10.30
2005-11 Narendra Modi 09.35
Note: The growth rate of 2001-09 is at 1999-2000 prices and the growth rate of 2005-11 at 2004-05 prices.

Note: It is very important to measure the GSDP as it means the monetary value of goods and services produced during the financial year of the state.

Also, much against the national scenario, secondary and tertiary sectors—industry and services—forms the much thicker share of the state GDP. While in 1960-61, agriculture contributed to 42 %, industry 26 and services 32 per cent, in 2008-09, while agriculture shrank to 17.10 per cent, industry jumped to 41.05 per cent, followed by services at 41.19, putting nearly 77.60 lakh persons who are directly related to agriculture, constituting 41.47 per cent of total work force of the state, at a highly precarious condition.

Today. there is a wide-spread rural distress in Gujarat as a NSSO survey carried out between January 2013 and December 2013, it found that the average monthly net receipt from cultivation per agricultural household was Rs 2,933, which was less than the national average, Rs 3,081. Ranking No 12 in a list of 21 major Indian states, this is less than 11 other states remarkably below that registered by the farmers of Punjab (Rs 10,862), which is thrice that of Gujarat, followed by Haryana (Rs 7,867), Karnataka (Rs 4,930), and Telangana (Rs 4,227). Even households in poorer states registered a higher net income from cultivation than Gujarat – Rs 4,211 in Assam, Rs 4,016 in Madhya Pradesh, Rs 3,347 in Chhattisgarh, and Rs 3,138 in Rajasthan. the average monthly income of a farmer in Gujarat is Rs 7,926. According to the central government’s Agriculture Statistics-2016, this is 40% of the monthly earning of a Punjab farmer (Rs 18,049) or 54% of a Haryana agriculturist.

The daily income of a farmer in Gujarat works out at Rs 264 per day, which is Rs 77 less than the national daily wage of an unskilled farm labourer (Rs 341 per day). The daily wage of a farm labourer in Gujarat is Rs 178 per day. Little wonder, Pattidars who were middle-level farmers once and then moved to small-scale enterprises are rebelling against the state policy and Pattidar Movement, led by a young Hardik Patel is demanding reservations in government jobs.

But, thanks to the ill-conceived Goods and Service Tax (GST) and its faulty implementation, even the small and medium scale industries, especially the textile and diamond cutting industries of Surat have registered a negative growth and many workers have lost their jobs. However, it is not a recent phenomenon, but continues since Modi days in Gujarat as unemployment rate in Gujarat in 2009-10 was 9.9% while the national figure was 9.3% and 5.8% for Tamil Nadu, 5.9 for Maharashtra and 8.6 for Haryana.

This is not surprising as there are 13 major industry groups that together account for around 82.05 per cent of total factories, 95.85 per cent of total fixed capital investment, 90.09 per cent of the value of output and 93.21 per cent of value addition in Gujarat’s industrial economy. Gujarat was always in terms of industrial investment as it ranked first in terms of issuing direct industrial license and financial investments have always boomed in Gujarat. Two years ago, a share broking firm in Rajkot, Marwadi Shares, was adding about 1,000 new customers every month. That is now up to 6,000 new customers a month. But, as far as jobs creation are concerned, it always was a job-less growth as it ranked seventh in employment generation; Tamil Nadu ranks seventh in investment in IEMs (Industrial Entrepreneur Memorandum) but ranks first in its share of creating employment from this investment. During 2006-10, Gujarat signed MoU worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expected to create about 8.63 lakh and 13.09 lakh jobs.

Gujarat is a leader in industrial sectors such as chemicals, petrochemicals, dairy, drugs and pharmaceuticals, cement and ceramics, gems and jewellery, textiles and engineering. The industrial sector comprises over 800 large industries and more than 453,339 micro, small and medium industries. As of December 2015, Gujarat ranked second in the production of crude oil (onshore) in India. It accounts for around 72 per cent of the world’s share of processed diamonds and more than 80 per cent of diamonds processed in India.

Industry and services got a major boost under the stewardship of Modi who promoted Special Economic Zones at a frantic pace, giving them major tax concessions, soft loans and immediate environmental clearance. Little wonder, the state ranks first in terms of total area covered under SEZs in India. It is also a leading SEZ state with the highest geographical area of 29,423.9 hectares under SEZ development. Gujarat, traditionally has been a high growth state, especially after the liberalisation began in 1991 and the growth rate remained the highest during those years. During this time, Chimanbhai Patel was the Chief Minister of the state who carried out the policies of his predecessor, Madhavsinh Solanki, during whose rule in 1981-85, growth rate was on par.  Hence, the claim that that Gujarat developed only during the regime of Narendra Modi is completely hollow and far from reality as the state experienced the highest annual economic growth rate of 19.5 per cent, even earlier as during the six-year period of 1988-94. Since then this much of high rate is never attained. And, the highest rate of growth during the Modi era was only 14.77 per cent in 2003-04.

 

 

Hence, it can be concluded that with or without Modi, Gujarat has always experienced an impressive growth rate and was almost never under the clutches of Hindu Growth Rate of as Prof. Rajkrishna had christened, and historically speaking, the growth rate of Gujarat has always been higher than the national average annual growth rate. So, it cannot be considered as an achievement of Narendra Modi’s regime as touted by the propaganda machine of Modi. The higher rate of growth in Gujarat today is nothing to boost about.

Now, let’s look at the second parameter to evaluating growth at traditional and conventional manner—per capita income. Doubtlessly, as a result of this development, the per capita income of Gujarat has remained higher than the national average. Here too, it is nolonger a dream state as in terms of per capita income at current prices, Andhra Pradesh crossed Rs 1 lakh mark for the first time during 2015-16, is preceded by Karnataka (Rs 1.45 lakh), Telangana (Rs 1.43 lakh) and Punjab (1.26 lakh). Even in the year 2011, in terms of per capita income, Gujarat ranked sixth among major states with at Rs 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471), Punjab (Rs 77,473), Tamil Nadu (Rs 72,993) and Uttarakhand (Rs 68,292). Even in the year 2010, Gujarat ranked 10th in terms of per-capita income in the country. It means the people of Gujarat earn much less than those of Maharashtra, Haryana and Punjab.
Also, the per capita debt is on rise. The per capita debt in 2006-07 was Rs 13,371, which in 2009-10 went up to Rs 16,328.

Even if we talk about the amount of per capita deposit and per capita credit, another conventional parameter of evaluating growth, Gujarat is nowhere vibrant as for Gujarat they were Rs 37,174 and Rs 24,268; while for Tamil Nadu, Rs 42,580 and Rs 47,964; Karnataka Rs 49,598 and Rs 38,154; and Maharashtra Rs 1,10,183 and Rs 89,575. Even Kerala did better than Gujarat with Rs 43,890 and Rs 27,912 in the year 2011.
hard statistical facts, therefore, laugh at the claim of vibrant Gujarat and scoff at the so-called Gujarat Model as if we talk about the rate of economic growth, during 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 8.68%, but so other major states like Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu Uttar Pradesh and tiny after Uttarakhand that hit 11.81% mark. So, were other smaller states like Sikkim and Arunachal Pradesh have registered growth of 11.01% and 8.96%, respectively!
What about industrial growth rate? Well, during 2001-04, it was 3.95%, and during 2005-09, it was 12.65%. But, it certainly wasn’t a Modi Miracle as during these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%, meaning hitherto industrially backward states surpassing Gujarat during his rule!

Everyone in this regime talks about foreign direct investment as a proof of economic growth, but here too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs 3.61 lakh crore and Rs 2.99 lakh crore more than Gujarat without much fanfare and Modi’s much-hyped industrial summits.
Another parameter of measuring economic wonder is credit-deposit ratio and here too, Gujarat is not a leading state. In fact, it is far behind other major states. In 2010, Gujarat’s share in total deposits of the scheduled commercial banks was 4.70%, as against 5.42%, 6.20%, 6.34% and 26.60% for Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, respectively. The share of Gujarat in total credit disbursed by these commercial banks was 4.22%; while the same for Maharashtra, Karnataka and Tami Nadu was 29.75%, 6.71% and 9.61% respectively.
Human development is real development: No longer, economic growth rate, per-capita income, FDI etc. are considered as sufficient conditions for measuring growth as only ignoramus and ultra-conventional would take it as a milestone of growth as it must be inclusive and humane. So, internationally accepted parameters of measuring growth have human development yardsticks like rate of reducing poverty, access to schools & hospitals, life expectancy, infant and mother mortality rates, gender ratio, literacy and mean-years of schooling. Here, Gujarat cuts a sorry figure and falters at all parameters as the following table clearly shows, indicating Gujarat’s position in India in the year 2001 and 2011:

 

Parameter 2001 2011
Gender Ratio 18th 21st
Literacy 10th 11th
Life Expectancy 10th (2000-04) 10th (2010-14)
Infant mortality 10th 10th

 

In these parameters like in terms of people below the official poverty line; that’s in fact is the survival line, Gujarat, with 31.8% people below the ‘poverty line’ lagged behind Kerala, Punjab, Himachal Pradesh and Haryana, where poverty levels were 19.7%, 20.9%, 22.9% and 24.1%, respectively.
On three other important social indicators, viz life expectancy at birth (LEB), mean years of schooling (MYS) and school life expectancy (SLE), the picture in even murkier as Gujarat is far behind some other states. In Gujarat, the LEB during 2002-06 was 64.1 years and it ranked ninth among major Indian states. In the areas of MYS and SLE, during 2004-05, it ranked seventh and ninth, respectively. Kerala ranked first in all three indicators. Even Maharashtra, Himachal Pradesh, Punjab, Haryana, Tamil Nadu and Karnataka performed much better than Gujarat.

Gujarat remains a state where inequality with respect to income, education and health is widespread, in fact much higher than some of the major states. Shockingly, in terms of hunger — as revealed by the ‘State Hunger Index 2008’ — Gujarat ranked 13th among 17 big states and worse than Orissa.

Another shocking feature is the state having a high percentage of women suffering from anaemia that has risen from 46.3% in 1999 to 55.5% in 2004, that is even higher among children that rose from 74.5% to 80.1%. And, not to speak about the conditions of Dalits, Adivasis and Muslims that have worsened during the last decade.

In conclusion, we can safely say that with respect to Human Development Index (HDI), Gujarat’s story is devastating that stood at 11th position among Indian states, scoring 0.616, just slightly above the National average at 0616.

Here is the tiny Himalayan state of Himachal where election just took place and has been ridiculed by Modi-Shah duo as it was under the Congress rule for the last five years, shows a real contrast Between 1993-94 and 2011, Himachal Pradesh has clocked an HDI of 0.670, next only to Kerala.

It had a four-fold reduction in the rural poor – poverty levels that dropped from 36.8 per cent to 8.5 per cent during this period. The decline has been sure and steady since then and it has the lowest share of individuals with no education. In 2011, less than one-third of its rural population had no education, against two-fifths or half in the case of its neighbouring states. It also had the highest proportion of residents with post-secondary education across northern states.

Himachal also excels in health outcomes as well, ranking third after Kerala and Tamil Nadu in reducing infant mortality, child mortality and under-five mortality and second after Kerala in post-neonatal mortality.

Then, Himachal Pradesh has the highest rural female work participation rates among states (63 per cent), leaving the second ranking state Tamil Nadu with 43 per cent far behind. It stands second in urban female work participation rates (28 per cent) along with Tamil Nadu, putting Kerala at 29 per cent, just slightly above.

The state also has become a model of inclusive growth as it has a much higher level of – land distribution among castes that is more equal than in other states, so is the case of employment distribution, meaning there are very few Dalit and Adivasi landless farmers and jobless persons in these groups.

Even the national campaign of Swachha Bharat (Clean India) performed with excellent result in this Congress governed state as in 2005-06, only 40 per cent of rural households had access to toilet facilities; today Himachal Pradesh is close to becoming an open defecation free state.

This happened because a political consensus not only about the goals to be achieved but also in empowering the community existed in Himachal that sadly, may become a thing of past, as the acrimonious election campaign, just concluded, indicated.

Thus, Gujarat’s growth story as claimed by Modi is more a myth than reality. That only enriches mega-industrialists and super-rich like Ambanis (both brothers) and Adani as Reliance Petroleum of Elder operates the oil refinery at Jamnagar which is the world’s largest grass roots refinery. The company has also planned another SEZ (special economic zone), in Jamnagar. And, the Adani Group’s experienced a meteoric rise during the chief ministership of Narendra Modi in Gujarat. It has just started a big, gleaming Adani Port in Mundra. Apart from picking up over 7,000 hectares at rock bottom rates (some for as low as Re 1 per square metre), it is destroying thousands of hectares of rich mangrove forest.

It is time for the people of Gujarat of introspection and putting right efforts in the direction of making Gujarat a truly ‘vibrant state.’

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About rirakesh

I feel a bit disturbed by the prevailing condition in our society, so I write: poems, articles & stories.
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2 Responses to Gujarat Model: A role-model or a disaster?

  1. Mahesh Patil says:

    That was a well researched article, unfortunately given the present circumstances, it is like shouting into the wind. All to no purpose. The danger posed by the extremist Hindu elements could lead on to a holocaust the kind of which the world has not seen. We are facing greater threat from within, our home grown extremists of all religious kinds are doing the work of our external enemies and that too far more viciously. However, the threat is not being realized at the grass roots since it is fanned in the self glorifying language of Hinduism, Patriotism and (laughably) Progress! Truly the last resort of scoundrels!

    • rirakesh says:

      Dear Mahesh,
      Thanks for the review. As a researcher and writer, all that I can do is to write the facts and tell people what reality and if the self-centered and disillusioned people can’t see the writing on the wall, it is not our fault. That was has happened in Gujarat where rural-urban & secular-communal divide is almost complete in Gujarat & it proves that only pathetic, abusing & howling campaign works tp attract urban self-centred middle class who just care about dhandho & profit that only RSS/BJP can assure for them!
      Also, this power-hungry RSS/BJP regime is determined to destroy plural, composite and all-accepting culture of India, called Ganga-Yamuna Tehzib, but I guess, nothing can be done to prevent us, except we guys writing and telling those who are highly prejudiced!

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