Skip to main content

Top US-based think-tank opines there is nothing exceptional about Gujarat growth over last decade

Investment projects under implementation
By Rajiv Shah
A top expert with the Carnegie Endowment for International Peace, a foreign-policy think tank with centres in Washington DC, Moscow, Beirut, Beijing and Brussels, has strongly disputed those who tout Gujarat’s growth over the last decade as exemplary, saying whether it is foreign direct investment, overall investment in the economy, or governance, the state has been an average performer. Milan Vaishnav, associate, South Asia Programme, and previously with the Columbia University with primary research focus on the political economy of India, neither was there what the Gujarat chief minister called “pro-people good governance” nor “minimal government, maximum governance,” as he claimed before India’s largest business houses.
Vaishnav said, “A closer examination of hard data reveals that Modi’s growth and investment record in Gujarat is impressive, in line with the boasts of his most ardent supporters, but it is also clear that it is not exceptional”, adding, even before Modi came to power, “Gujarat enjoyed the highest per capita income growth rate of any major Indian state in the decade immediately preceding Modi’s rise to power in October 2001.”
Average growth net of state domestic product (NSDP) per capita
In fact, between 1992 and 2001, “per capita income in Gujarat grew at a rate of 5.5 percent, more than half a percentage point greater than Kerala, the next-fastest-growing state. When one looks at the decade from 2002 to 2011, when Modi was firmly entrenched as chief minister, Gujarat again ranked first among states in terms of per capita income growth.”
However, Vaishanav argues, “The 2000s were the boom years for India’s economy overall, and all states did better than they had in the 1990s. Thus, the growth gains in Gujarat during the 2000s compared to the prior decade are solid but hardly unheard of; several states posted larger improvements (including high-growth states like Maharashtra and Haryana as well as traditional laggards like Bihar and Odisha). If other state leaders have engineered greater improvements in their states’ growth rates, can Modi’s supporters really claim that he is exceptional?”
Literacy gains per 1% increase in NSDP per capita (2001-11)
Saying that “even more than the pace of growth, it is Modi’s investor-friendly reputation that has won him plaudits”, the expert says, “From 2000 to July 2013, Gujarat alone received more than Rs 40,469 crore ($8.8 billion) in foreign direct investment (FDI). The state accounted for roughly 4 percent of all FDI flows into India during that period.” But while this represents an impressive haul, “Maharashtra received eight times and Delhi more than four times as much FDI. Gujarat also lagged behind the states of Tamil Nadu and Karnataka, and it just barely outpaced Andhra Pradesh.”
Beyond foreign investment, Vaishnav says, the picture is also not that clear-cut for all investment projects, regardless of investor class. “Gujarat’s share of investment projects (in value terms) during Modi’s decadelong tenure has hovered just above 8 percent, which is impressive given that Gujarat accounts for less than 5 percent of India’s population but is roughly on par with Gujarat’s share of the overall economy”, he points out.
Infant mortality reduction per 1% increase in NSDP per capita (2001-11)
 In fact, the expert says, “the share of investment projects under implementation in Gujarat between 2001 and 2011 almost perfectly mirrors the all-India trend; there is no clear indication that Gujarat deviated sharply from India as a whole. There has also been a large gap between lavish project announcements made at Modi’s biannual investor gathering, Vibrant Gujarat, and the projects that materialize. Indeed, when it comes to tallying projects that actually break ground, Gujarat is outshined by its neighbor to the south, Maharashtra”.
As for social development, the expert looks at two of the most widely cited indicators of social development: literacy and infant mortality. “In 1991, Gujarat’s literacy rate stood at roughly 61 percent, 9 percentage points above the all-India average. By 2001—the year Modi came to power—the gap between Gujarat’s literacy rate and the national average had narrowed by half. With Modi at the helm, the literacy rate improved another 10 percentage points over the next decade, increasing the pace of its gains in line with the all-India trend”, he says.
Change in literacy rate
On infant mortality, the expert says, “Gujarat’s progress had largely flatlined in the years leading up to 2001. Despite this stagnation, in relative terms its infant mortality rate (60 deaths per 1,000 live births) still fared better than the all-India average (see figure on infant mortality). Between 2001 and 2011, Gujarat’s progress largely tracked that of India’s as a whole (the infant mortality rate declined substantially to 41 and 44 deaths per 1,000 live births, respectively).”
Pointing towards the need to analyse Gujarat’s “progress” on social development from the angle another angle , the expert believes, it should be seen “more directly measuring how well it has maximized the social development bang for the growth buck—in others words, looking at how a 1 percent gain in per capita income has affected literacy and mortality.” This, he suggests, would show how the state’s rulers have governed the state. 
Change in infant mortality rate
“Here, the relative shortcomings of the Gujarat model are more readily apparent: the state is situated toward the bottom of the pack when it comes to harnessing greater wealth for improved social welfare (see figures respective). Relative to how much growth it has enjoyed, Gujarat’s social development performance has not been particularly noteworthy”, he says.
---
(Charts reproduced from the original study by Milan Vaishnav)

Comments

TRENDING

Banned? Indian ports 'received' 38 US plastic waste containers reexported from Indonesia

By Rajiv Shah
An Indonesia-based international environmental watchdog group has dug out what it has called “a global pollution shell game”, stating how officials in Indonesia approved re-exports of “illegal” US waste shipments containing plastics mainly to India, as also to other Asian countries -- Thailand, South Korea and Vietnam -- instead of returning them to the US “as promised.”

Gujarat refusal to observe Maulana Azad's birthday as Education Day 'discriminatory'

By Our Representative
The Gujarat government decision not to celebrate the National Education Day on !monday has gone controversial. Civil society organizations have particularly wondered whether the state government is shying away from the occasion, especially against the backdrop of "deteriorating" level of education in Gujarat.

Cops' 'inability' to deliver justice? Model Gujarat ranks 12th among 18 major states

By Rajiv Shah
A Tata Trusts study, released in Delhi on Thursday, has ranked “model” Gujarat 12th out of 18 major states it has analysed across India to “assess” the police's capacity to deliver justice. Several of the advanced states such as Tamil Nadu, Karnataka, Punjab, Haryana, Maharashtra, Andhra Pradesh and Telangana as well as some of the so-called Bimaru states such as Odisha, Jharkhand and Chhattisgarh are found to have ranked better than Gujarat.

Visually challenged lady seeks appointment with Gujarat CM, is 'unofficially' detained

By Pankti Jog*
It was a usual noon of November 10. I got a phone call on our Right to Information (RTI) helpline No 9924085000 from Ranjanben of Khambhat, narrating her “disgraceful” experience after she had requested for an appointment with Gujarat chief minister Vijay Rupani. She wanted to meet Rupani, on tour of the Khambhat area in Central Gujarat as part of his Janvikas Jumbesh (Campaign for Development).

People's pressure? GPCB mining cancellation 'notice' to top cement unit in Gujarat

By Sagar Rabari*
Environmental Clearance (EC) was given to Ultratech Cement Co Ltd for limestone mining in villages Talli and Bambhor of Talaja taluka in Bhavnagar district of Gujarat on January 5, 2017. EC was issued ignoring, overriding and undermining opposition from local farmers to mining activity in the area. The mining in these two villages covers an area of 193.3268 hectares (ha), while the entire project is spread over an area of 1,715.1311 ha.

Violent 'Ajodhya' campaign in 1840s after British captured Kabul, destroyed Jama Masjid

Counterview Desk  Irfan Ahmad, professor at the Max Planck Institute for the Study of Religious and Ethnic Diversity, Göttingen, Germany, and author of “Islamism and Democracy in India” (Princeton University Press, 2009), short-listed for the 2011 International Convention of Asian Scholars Book Prize for the best study in Social Sciences, in his "initial thoughts" on the Supreme Court judgment on the Babri-Jam Janmaboomi dispute has said, while order was “lawful”, it was also “awful.”

Bullet train acquisition: Land holding worth Rs 1.5 crore, Gujarat govt 'offer' Rs 8 lakh

By RK Misra*
Foundation stones laid by Prime Minister Narendra Modi litter India’s cities, towns and villages, but there are few projects which he has pursued with such perseverance and tenacity as the Ahmedabad-Mumbai bullet train one. However, the overwhelming state power notwithstanding, the farmers, whose lands are being acquired for the Modi government’s dream project, have no plans to give up the fight.