Figuring out Gujarat

– By Bhalchandra Mungekar

The Gujarat model of development is not what its champions say it is

Having realised that the people of India have not exonerated him for the post-Godhra killings of Muslims in 2002 on his watch, Gujarat Chief Minister Narendra Modi systematically tried to build up his image as a “man of development”(vikas purush). The Sangh Parivar called it the “Gujarat model of development” and started propagating it. But what is surprising is that a large section of the population, including his critics, have also started believing in it. This euphoria emboldened Modi to start saying that Gujarat cannot be compared with any other state but itself. Even after his anointment in Goa, he said Gujarat can be compared only with China. Modi’s claim is too tall and not supported by evidence. For, all official information shows it is systematically created hype, rather than reality.

During 2005-09, Gujarat’s income annually increased by 12.65 per cent and it ranked third after Orissa and Chhattisgarh, whose incomes increased by 17.53 and 13.30 per cent respectively. Again, at 2004-05 prices, with per capita income of Rs 51,708, Gujarat was third in 2010-11, after Maharashtra and Haryana. During 2005-06 and 2011-12, Gujarat’s agriculture grew by 6.47 per cent compared to Bihar’s growth rate of 15.17 per cent while its industrial income increased by 10.90 per cent compared to Bihar, Uttarakhand and Maharashtra, whose growth rates were 16.73, 15.65 and 11.02 per cent respectively.


In the case of manufacturing, Gujarat ranked seventh, with 10.55 per cent growth rate, after Uttarakhand (25.92 per cent), Orissa (14.03 per cent), Himachal Pradesh (13.57 per cent), Madhya Pradesh (10.86 per cent) and even Jammu and Kashmir (10.79 per cent). Thus, in manufacturing, many industrially backward states surpassed Gujarat.

In the services sector, Gujarat’s growth rate of 11.10 per cent ranked it fifth, after Uttarakhand, Haryana, Jharkhand and Himachal, which registered growth of 14.77, 12.90, 11.93 and 11.44 per cent respectively. Bihar, Chhattisgarh, Maharashtra and Orissa were almost on par with Gujarat.

With respect to FDI, during April 2000 to June 2012, Maharashtra alone accounted for 32 per cent of total FDI in India, followed by Delhi (19 per cent) and Karnataka (5 per cent). Gujarat could barely manage to secure 4.5 per cent, on par with Tamil Nadu.

Further, Gujarat’s share in bank deposits in 2010 was barely 4.7 per cent — in total credit, 4.5 per cent, and its credit-deposit ratio was 65 per cent. It was nowhere comparable to Maharashtra whose share in total deposits and total credit was 26.60 and 29.75 per cent respectively. Even Kanataka, Tamil Nadu and Andhra Pradesh were in better positions vis-à-vis Gujarat. Further, with 63 per cent credit-deposit ratio, Gujarat ranked sixth, after Andhra (97.6 per cent), Maharashtra(90.8 per cent), Rajasthan (80.2 per cent), Karnataka (76.6 per cent) and Punjab (65.5 per cent). Again, Gujarat’s per capita deposit and per capita credit were Rs 37,174 and Rs 24, 268 respectively, much less compared to Maharashtra, whose per capita deposit and per capita credit were Rs 1,10,183 and Rs 89,575 respectively. Gujarat was also behind Tamil Nadu, Kanataka and Kerala.

Do the above facts justify Modi’s claim of making Gujarat a vibrant state and his personal claim of being a vikas purush? Could Modi secure inclusive growth? In 2009-10, with 26.7 per cent of Gujarat’s rural population below the poverty line, it ranked seventh and lagged behind Punjab, Haryana, Andhra and Tamil Nadu, whose rural BPL populations were 14.6, 18, 22.8 and 21.2 per cent respectively. It lagged behind Kerala and Himachal with 12 per cent and 9 per cent respectively.

How did Gujarat fare in the personal level of consumption? In 2004-05 (at 1993-94 prices) per capita per month expenditure (PCPME) in Gujarat’s rural and urban areas was Rs 340.40 and Rs 612.50 respectively. The state ranked after Punjab, Kerala, Himachal and Haryana, whose PCPME in rural and urban areas were Rs 482.39 and Rs 721.45; Rs 574.39 and Rs 647.40; Rs 473.24 and Rs 698.81; and Rs 486.40 and Rs 584.75 respectively. What was ignominious for Gujarat was that, with respect to the prevalence of hunger, the state was even worse than Orissa.

Inequality between rural and urban consumption levels in Gujarat was also far greater than in other states. For instance, the proportion of rural to urban consumption level for Gujarat in 2004-05 was as low as 56 per cent, compared to 68 per cent for Punjab, Himachal and Uttar Pradesh; 70 per cent for Rajasthan; 83 per cent for Haryana; and 89 per cent for Kerala. Even Bihar, with 62 per cent, was better than Gujarat.

What is the situation in Gujarat regarding the human development index (HDI)? The HDI for Gujarat in 2008 was 0.527 and it ranked 10th, while for Haryana, Maharashtra, Punjab, Himachal and Kerala, the HDI was 0.527, 0.552, 0.572, 0.605, 0.652 and as high as 0.790 respectively. In terms of life expectancy at birth and school-life expectancy, Gujarat ranked ninth, and with respect to the mean years of schooling, it ranked seventh.

Further, when the HDI is adjusted against inequality of income, health and education, Gujarat’s performance becomes highly regressive as it ranks sixth, inequality being much higher in the education sector compared to income and health. In 2008-09, there were only 56 per cent institutional deliveries in Gujarat as against 65 per cent in Karnataka, 64 per cent in Maharashtra, 71 per cent in Andhra and as high as 99 per cent in Kerala. Thus, the performance of Gujarat on the human development front was not only deplorable, but disastrous.

The writer is a Congress MP for the Rajya Sabha, former member, Planning Commission, and former vice-chancellor, Mumbai University


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