Skip to main content

Gujarat's high growth trajectory has meant development of corporate sector, neglect of poor: Economist

By Our Representative
In a recent analysis, Shipra Nigam, consultant economist with the Research and Information Systems for Developing Countries, Ministry of External Affairs, New Delhi, has said that “there is little that is new in Gujarat’s developmental model.” Quoting extensively from a book, “Poverty Amidst Prosperity: Essays on the Trajectory of Development in Gujarat”, published this year, Nigam says, “Gujarat’s market led growth operates within the new-liberal paradigm that has for some decades been touted by the IMF, World Bank and inc as the panacea for all ills in developing countries. It is a frame that has been widely contested, critiqued and discredited for its abysmal failure in bringing in sustainable, equitable and participatory growth within the developing world.”
“In fact, the paradigm has been held responsible for inducing and aggravating the enormous difficulties faced by many of the developing countries. As the analysis in the book confirms, the ‘Gujarat Development Model’ is nothing more than a fervent adaptation and implementation of this chosen path favoured by the Indian state itself since the mid-1980s. Hence, along with the imminent candidature of Narendra Modi as BJP’s prime ministerial nominee, the celebration of this developmental model by India Inc assumes ominous significance.”
Nigam says, “While Gujarat’s average GDP growth rates in the past decade are higher than the national average and slightly above those of other high performing states, the gap has been narrowing overtime, which also coincides with an ‘investment fatigue’ that has set in recently. Since Gujarat’s infrastructure is not markedly different from other industrially competitive states, the substantial difference in investment levels is frequently attributed to the ‘investor friendly governance structure’.”
Giving the instance the biennial Vibrant Gujarat Global Investors Summit, she says, it “is often highlighted as an example of the state’s proactive role in promoting investment. However its success seems to be waning in recent years. Out of the total MoUs signed under these successive summits, the share of projects implemented and under implementation have continuously declined from about 73 % in 2003 to 13% in 2011. Moreover, the state’s share in investment intentions in terms of IEMs ( Industrial Entrepreneur Memorandum), letters of intent (LOIs) and Direct Investment Licences (DILs) has declined from early 20’s in percentage in 2005 to less than 10 % in 2011.”
Quoting Atul Sood, who has edited the book, Nigam points out, “In Gujarat the investor is no longer just the source for resources but the one who determines the priorities of development and this has had serious consequences for the sustainability and distributive justice of the entire growth process. The path of growth, its trajectory, is not defined by the state, or any planning body of economists; it is decided by investors, financial institutions, and corporate firms. The book shows how the economy of Gujrat has been given over to the corporates. They invest in it and they also sing all the praises of the development model.”
Thus, “37% of the total investment in Gujarat in the last two and a half decades has been in infrastructure development. The state’s infrastructure development strategy involves two basic components: (1) promoting private integrated investment to develop ports, rail, road and power sectors and (2) developing large enclaves for industrial and service sector growth as ‘greenfield sites’ with world class infrastructure. In all cases this is sought to be done through massive concessions, rebates, subsidies and even direct handing over of financial control over revenues to attract the private sector.”
She adds, “These include initiatives like the Investor Support Systems (ISS), the Public Private partnership (PPP) model, establishment of Special Economic Zones (SEZs) and Special Investment Regions (SIRs) to create ‘world class infrastructure’ and several mega projects (units with minimal investment of Rs 1,000 crore in core industrial sectors and Rs 5000 crore in infrastructure projects). The 2009 industrial policy of the Gujarat state locates these initiatives within a larger central government framework to create Delhi-Mumbai Industrial Corridor (DMIC), utilizing its coastal proximity and geographical location within this project. The DMIC plan itself is full of references to setting up industrial areas and infrastructure in Greenfield sites at Dhar, Pune, Alwar, Surat, Rewari and Muzzafarnagar and is integral to Gujarat’s own infrastructure and development strategy.”
Pointing towards the huge environmental and human costs, she says, “The DMIC plan on groundwater indicates that Gujarat would have to allocate water for industrial uses by diverting water away from irrigation and domestic purposes. Further, the plan envisages migration figures of 94 million workers by 2039. But nowhere in its sweeping grandeur does the plan state how the consequent multiplication of urban demand for scarce water and other resources would be met, how would the water be distributed and who would pay the price? But the answers are not difficult to guess. In implementing this development strategy Gujarat has sought private investment across the board. Key sectors – traditionally held to be the preserve of the state – such as ports, roads, rail and power have been handed over to corporate capital. This has meant, inevitably, that the government has abdicated all decision making powers, as well as functional and financial control over such projects.”
Further: “Nowhere else in the country has this abdication of responsibility been so total, nowhere else has the state given over the economy so entirely to the corporates and private investors. For instance, the BOOT (Build Own Operate Transfer) policy initiative for port development involves royalty holidays instead of revenue sharing, permission to investors to adjust royalty against capital costs, freedom to developers to collect charges and tolls, land acquisition for private investors, 30 year window to make profits, special arrangements of forward linkages to private consortiums and SIRs and so on. The policy restricts the role of government to minimum and allows complete operational and tariff freedom to the investor. Not surprisingly, Gujarat leads the country in terms of private investment flows in projects implemented and underway for port development.”
Nigam quotes Sood as saying in the book, “Road and rail expansion is less focused on increasing access of human settlements but more about improving and strengthening access to SEZ’s and minor ports… In addition the private investment in infrastructure is dovetailed and integrated with the industrial corridor, which in itself is suspect in terms of gains it will bring to the local people and its implications for groundwater in water scarce regions… Gujarat seems to have internalized the two falsehoods mentioned earlier, to turn to private sector for addressing infrastructure and second to give preference to ‘Greenfield sites’ rather than address the aggregative challenges of infrastructure inadequacy.”
Coming to the speculation in land fuelled by legislative changes brought about ostensibly to promote infrastructural and agricultural development, Nigam quotes Sucharita Sen and Chinmoyee Malik’s chapters how in Gujrat, the number of households of the smallest farmer group has increased, but not the acreage they control, while the largest farmer groups have gained in acreage, indicating worsening inequalities. “This is contrary to the trend at the all-India level. The position of STs and SCs has also deteriorated overall except in case of SCs in the highest income size class leading to a rise in intra-caste inequalities within the latter. While incidence of landlessness has reduced overall (though starting from a much higher initial base as compared to national averages), it has increased in tribal areas ( in particular in the Panchmalals, Dahod and Dang regions ). These also happen to be the most underdeveloped regions in the state.”
Nigam quotes from the chapter by Ruchika Rani and Kalaiyarasan to map the stagnant and socially discriminatory employment conditions that persist in this period of high output growth. “There has been a significant mismatch between sources of income and employment leading to low employment elasticities of output and ‘jobless growth’. Employment growth in manufacturing and services turned negative in the last five years. Whatever growth in employment occurred in the last decade was largely in the category of casual- and self-employment indicative of rising informalisation. There were sharp regional differences in employment outcomes with rural Gujarat experiencing negative growth rates in the last five years. Employment was also unevenly spread across social groups and minorities. Upper caste Hindus and a small proportion of SCs had a proportionately large share in regular employment within manufacturing and services, with most of the rise for SCs in services being in casual employment.”
Nigam, whose analysis was published in kalifa.org, says, “While urban poverty levels for Muslims stagnated, those for Hindus declined by around 4 percentage points. Again, while per capita expenditure grew by 2.5 % p.a in the last five years, the increase for STs was a mere 0.14%, with an exponential widening of gap in growth rates of per capita income levels between STs and the rest. In urban areas poverty has increased for both SCs and STs while rural poverty has declined. However the extent of poverty for STs in rural areas is still two-and-a-half times higher as compared to others . While overall poverty for SCs as a group has declined and they seemed to have gained more than STs, intra group inequalities within SCs have again risen substantially.”

Comments

TRENDING

Hindus to be 'sent' to Kashmir? Despite Israeli settlements, peace eludes the region

By Anand K Sahay*
Curfew, news and communications blackout, transportation shut-down... News reports from Kashmir are worrying. So are the views relayed through the media, especially television. Old-fashioned repression seems to be consorting comfortably with expressions of concern “for our Kashmiri brethren”. We are looking at Orwell’s 1984 in the making.

Impact of state repression? Kashmir's 65% people prefer independence: Cambridge study

By Rajiv Shah 
Even as the Government of India’s controversial move to abrogate Article 370 of the Constitution and bifurcate Jammu and Kashmir (J&K) into two union territories is not only refusing to down die but has acquired international dimensions, a recent study, published by the Cambridge University Press, has claimed “pro-independence attitudes” among that 65% of Kashmiris, warning, this sentiment worsens when the state machinery resorts “repressive violence”.

Dholera 'inundated': Gujarat govt tries selling low lying area as top smart city site

Counterview Desk
Even as the Dholera Special Investment Region Regional Development Authority (DSIRDA) of the Gujarat government was busy organising a junket for Gujarat-based journalists for the area sought to be sold as an ideal special investment region (SIR) for industrialists, well-known farmers' activist Sagar Rabari has wondered why no investor has so far agreed to put in money in an area situated in Ahmedabad district along the Gulf of Khambhat.

Congress' anti-democratic laws led to Modi govt's 'Constitutional' changes: Scholars

Counterview Desk
A large number of academics* said to be belonging to several Indian and international institutions, even as taking strong exception to the Narendra Modi government's alleged move to amend the Constitution through "illegitimate" means, have taken strong exception to their colleagues in academia who we have become "all too accustomed to adopting a calculated silence in the face of such indignities."

Kashmir normal? Schoolboys, teenagers being arbitrarily picked up, detained: Report

Counterview Desk
A four-person team, consisting of Jean Dr├Ęze, well-known development economist; Kavita Krishnan, who is with the Communist Party of India (Marxist-Leninist); Maimoona Mollah of the All India Democratic Women's Association (AIDWA); and Vimal Bhai of the National Alliance of People's Movements (NAPM), back from a five-day fact-finding mission (August 9-13) from Kashmir, has said that people they spoke to “expressed their pain, anger, and sense of betrayal against the Government of India.”
In a report, “Kashmir Caged”, released along with a short eight-minute film, they said, the abrogation of Articles 370 and 35A, dissolution of the state of Jammu and Kashmir (J&K), and bifurcating it into two Union Territories, is not being supported by anyone they met, except for BJP spokesperson on Kashmir affairs Ashwani Kumar Chrungoo, who claimed 46% vote share in J&K.
Excerpts from the report: When our flight landed, and the airlines staff announced that passeng…

Modi's Gujarati mind? Why govt move to 'sell-off' defence PSUs isn't in national interest

By Sandeep Pandey*
The Standing Committee on Defence, 2017-18, of the 16th Lok Sabha highlights the idea of Buy Indian-IDDM (Indigenously Designed Developed and Manufactured). The Committee expressed concern over the import content of equipments produced and developed by Defence Research and Development Organisation (DRDO), Ordnance Factories (OFs) and defence Public Sector Undertakings (PSUs) because of the dependence it creates for military hardware on foreign suppliers.

Central Gujarat effluent channel 'releasing' highly polluted industrial wastewater: PM told

Counterview Desk
Senior environmentalists of the Paryavaran Suraksha Samiti (PSS), Vadodara, Rohit Prajapati and Krishnakant, in an open letter to the Prime Minister, the Gujarat chief minister, the Gujarat chief secretary, and senior Government of India and Gujarat government officials dealing with environment, pollution and climate change have said that the authorities’ response their pleas to take action against the leakages and flow of polluted wastewater from the effluent channels of Central Gujarat industrial areas has met with complete inertia.

Can't go to court with RTI information, rule Ahmedabad authorities: Kankaria accident

By Pankti Jog*
In a shocking reply to an application filed by me, the Ahmedabad Municipal Corporation (AMC) authorities have said that the information provided under the Right to Information (RT) Act should be used in court or in a judicial process. The Act is known to be a major tool that enables citizens to seek certified copies of documents, records from any public authority of state and Central government within 30 days, as per provisions of the Act.

Quit India Movement 'betrayal' and dubious role of Hindu Mahasabha, RSS leaders

By Shamsul Islam*
After the recent guillotine of Article 370, Hindutva ideologue Ram Madhav, while celebrating the occasion stated that it was honouring of the sacrifices of Dr Shyam Prasad Mukherjee and thousands others who laid down their lives for its removal. It is to be noted that Dr Mukherjee was a cadre of RSS and was groomed into a Hindutva leader by another Hindutva icon, VD Savarkar.

Strategy for united struggle against Hindutva 'fascism': Ideological silence is 'no option'

By Dr Bhabani Shankar Nayak*
Electoral alliance and opportunism of national and regional political parties, neoliberal economic marginalisation and soft secular Hindutva line pandering to Hindu majoritarianism laid the foundation of Hindutva fascism in post-colonial India.