Vibrant Gujarat? State industries' net value added slips into negative in last two years

By Rajiv Shah

Gujarat industry’s net value added (NVA), which is calculated by deducting all the depreciation charges – including consumption of fixed capital such as on raw materials, power and other inputs – has suddenly gone into the minus, surprising many an economist. The latest Annual Survey of Industries (ASI) data, put out in the first week of this month, suggest that NVA, which economists consider as “indicating the actual investment potential of a sector of economy”, has gone into the negative for two consecutive years continuously. It was minus (--) 0.64 per cent in 2010-11 and, again, minus (--) 1.72 per cent in 2011-12. The ASI is the principal source of data on various aspects of registered industrial establishments. They are part of the annual exercise by the Government of India’s Central Statistics Office’s industrial statistics wing.
The fresh data showing poor investment potential of Gujarat in the industrial sector suggests that, after a drastic rise in the recent past, the sector may be experiencing stagnation, though economists would like to wait to reach such a conclusion. Yet, the fact is, the negative growth of the NVA of Gujarat industries in 2011-12 stands in sharp contrast to 18.69 per cent rise in the NVA of the country as a whole, with several states’ NVA rising by a whopping 152.47 per cent (Karnataka), 127.92 per cent (Rajasthan), Punjab (61.86 per cent), Bihar (27.83 per cent), and Haryana (20.96 per cent). In fact, Gujarat was one of the five states whose NVA went into minus in 2011-12, other states being Uttar Pradesh (--16.30 per cent), Jharkhand (--13.91 per cent), West Bengal (--2.29 per cent), and Assam (1.88 per cent).
Gujarat’s poor showing in NVA has come even as the state’s overall rank in the total amount of net value added in rupee terms slipped from No 2 in the country to No 3. Maharashtra has consistently maintained its No 1 position. In 2011-12, Maharashtra’s NVA was Rs 1.54 lakh crore, and at Rs 1.49 lakh crore in 2010-11. In 2011-12, Karnataka eased out Gujarat as No 2. In 2010-11, Gujarat’s NVA stood at Rs 89,447 crore, while No 3 was Karnataka at Rs 71,993 crore. But in 2011-12, Karnataka snatched away Gujarat’s No 2 position by registering NVA of Rs 1.03 lakh crore. Gujarat, which went into the negative, on the other hand, registered an NVA of Rs 87,909 crore, going into the negative.
Significantly, Gujarat’s NVA stagnated for two consecutive years after its industries registered a very healthy rise in NVA of 49.01 per cent in 2009-10. The rise came about following negative NVA in the previous year, of – 2.72 per cent in 2008-09. Even then, it is a fact that the ASI figures 1998-99 onwards suggest that Gujarat’s NVA registered an impressive growth of 14.5 per cent per annum till 2011-12. Prof Indira Hirway, a senior economist, told Counterview, “The data suggest that the investment climate might have suffered a setback over the two years in question. However, good investment cannot always be a continuous process each year. It has its own ups and downs. Hence, it is always advisable to calculate NVA taking a long-term period to know the exact situation.”
There is a distinct view among Gujarat-based economic experts that the state’s own home-grown industry has not been growing particularly consistently over the last few years. This view has been openly expressed by senior economic consultant Sunil Parikh in different open forums. In its drive to attract outside investment through bi-annual state-sponsored Vibrant Gujarat summits, Parikh believes, the investors from outside the state have been able to take away a bigger part of the cake, while the state’s own industries showed a degree of stagnation. There is, however, no word or analysis from the government over the tangled issue, as it would be politically dangerous to trigger its nuances at time when Gujarat chief minister Narendra Modi is BJP’s Prime Ministerial candidate in ensuring Lok Sabha polls.

Comments

Plastic burning in homes threatens food, water and air across Global South: Study

By Jag Jivan In a groundbreaking study spanning 26 countries across the Global South , researchers have uncovered the widespread and concerning practice of households burning plastic waste as a fuel for cooking, heating, and other domestic needs. The research, published in Nature Communications , reveals that this hazardous method of managing both waste and energy poverty is driven by systemic failures in municipal services and the unaffordability of clean alternatives, posing severe risks to human health and the environment.

Economic superpower’s social failure? Inequality, malnutrition and crisis of India's democracy

By Vikas Meshram India may be celebrated as one of the world’s fastest-growing economies, but a closer look at who benefits from that growth tells a starkly different story. The recently released World Inequality Report 2026 lays bare a country sharply divided by wealth, privilege and power. According to the report, nearly 65 percent of India’s total wealth is owned by the richest 10 percent of its population, while the bottom half of the country controls barely 6.4 percent. The top one percent—around 14 million people—holds more than 40 percent, the highest concentration since 1961. Meanwhile, the female labour force participation rate is a dismal 15.7 percent.

The greatest threat to our food system: The aggressive push for GM crops

By Bharat Dogra Thanks to the courageous resistance of several leading scientists who continue to speak the truth despite increasing pressures from the powerful GM crop and GM food lobby , the many-sided and in some contexts irreversible environmental and health impacts of GM foods and crops, as well as the highly disruptive effects of this technology on farmers, are widely known today.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Stands 'exposed': Cavalier attitude towards rushed construction of Char Dham project

By Bharat Dogra* The nation heaved a big sigh of relief when the 41 workers trapped in the under-construction Silkyara-Barkot tunnel (Uttarkashi district of Uttarakhand) were finally rescued on November 28 after a 17-day rescue effort. All those involved in the rescue effort deserve a big thanks of the entire country. The government deserves appreciation for providing all-round support.

'Restructuring' Sahitya Akademi: Is the ‘Gujarat model’ reaching Delhi?

By Prakash N. Shah* A fortnight and a few days have slipped past that grim event. It was as if the wedding preparations were complete and the groom’s face was about to be unveiled behind the ceremonial tinsel. At 3 PM on December 18, a press conference was poised to announce the Sahitya Akademi Awards .

The war on junk food: Why India must adopt global warning labels

By Jag Jivan The global health landscape is witnessing a decisive shift toward aggressive regulation of the food industry, a movement highlighted by two significant policy developments shared by Dr. Arun Gupta of the Nutrition Advocacy for Public Interest (NAPi).

The illusion of nuclear abundance: Why NTPC’s expansion demands public scrutiny

By Shankar Sharma* The recent news that NTPC is scouting 30 potential sites across India for a massive nuclear power expansion should be a wake-up call for every citizen. While the state-owned utility frames this as a bold stride toward a 100,000 MW nuclear capacity by 2047, a cold look at India’s nuclear saga over the last few decades suggests this ambition may be more illusory than achievable. More importantly, it carries implications that could fundamentally alter the safety, environment, and economic health of our communities.

Madhav Gadgil: The ecologist who taught India to listen to nature

By Raj Kumar Sinha* Among the exceptional individuals who laid the intellectual and scientific foundations of environmental conservation in India—and challenged the dominant development discourse—Professor Madhav Dhondo Keshav Gadgil stands as a towering figure. He was not only a pioneering ecologist, but also among the first to view environmental protection through the lens of democracy, local communities and social justice.

Search This Blog