Gujarat govt's largesse to mega investors: Just 2% of Rs 54,000 cr industrial subsidies went to small sector

By A Representative
A research paper, “Political Economy of Subsidies and Incentives to Industries in Gujarat: Some Issues”, by scholars Indira Hirway, Neha Shah and Rajeev Sharma, has calculated that the total subsidies given to industries and infrastructure projects during 1990–2011 was a whopping Rs 56,538 crore, of which the maximum share is of sales tax subsidies (Rs 54,303 crore), followed by Rs 1,677 crore of capital subsidies and Rs 370 crore of interest subsidy.” Of this, the paper points out, “Rs 1,150 crore or a mere 2.03 per cent subsidies have gone to the small scale industries/ micro, small and medium enterprises (SSI/MSME)."
"The total amount of subsidies disbursed during the past decade (2001-02 to 2010–11) is Rs 38,226 crore, of which the major share is of sales tax subsidy/ incentives (Rs 37,467 crore). The other major subsidies are Rs 371 crore of interest subsidies and Rs 224 crore of capital subsidies”, the paper, which forms part of a book containing dozen-odd well-researched articles on Gujarat growth story, points out.
Providing a comparison, the paper says, “The amounts of the subsidies is more than ten times of the total subsidies given by the state to agriculture and allied activities and to food and civil supply put together. In other words, the state spent ten times more to attract investments in industry and infrastructure than to help the poor in agriculture and allied activities and food subsidies — at a time when malnutrition, particularly of women and children, is a serious concern in the state.”
All this has been made possible, says the paper, because of gradual undermining of the social agenda while providing subsidies. The paper says, “In the earlier periods, new industrial units were entitled to incentives/ subsidies when they were small or/and located in backward areas. Gradually the larger units have also been included. Before 1990, ‘pioneering’ units with capital investment of Rs 5 crore and more in backward talukas were entitled to special subsidies and incentives. The size of units jumped up multifold thereafter.”
The paper adds, “Instead of only the SSI sector, the focus is now on prestigious, premier, and mega units with Rs 100 crore to Rs 1,000-2000 crore or more capital investments and project investments.” In fact, after 2009, “no limit has been laid out as the subsidies and incentives for mega units are to be determined on a case-to-case basis”, the paper says.
Giving the example of subsidies to the Tata Nano project, which was the first mega project under the new scheme. “The details of the subsidies/incentives given to this project are estimated to be Rs 38,000 crore. The other beneficiaries of mega projects, according to official announcements, are Ford Motors, Maruti Suzuki, and a textile company. The terms and conditions of the incentives will be the same for the incoming companies Ford and Peugeot”, the paper says.
The paper further points to how the conditionality of employment has been watered down substantially. “In the early years of the 1990s, it was mandatory for the beneficiary units to employ 100 permanent workers each, and to employ local workers who would constitute 80 per cent or more of the total workers employed in the unit, and who would constitute 50 per cent or more of the managerial and supervisory staff”, it says.
“The condition of employing 100 permanent workers turned into 100 regular workers and then just 100 workers”, the paper says, adding, “The condition of 1,000 workers for large projects was irrespective of the level of investment. And finally, the condition of local workers has been removed and in the case of mega projects no such condition is applicable.” Similarly, the location policy for new units has been gradually relaxed over the years.
Saying that all this is nothing but “the growth of crony capitalization”, the paper underlines, it “denied a level playing field to the large number of small enterprises, and also changed the political power substantially in favour of the corporate sector. The changes in the state policies towards subsidies and incentives to private investments in industry and infrastructure units, particularly in the past decade, have important implications for the rate and pattern of economic growth in Gujarat.”
It adds, “Instead of promoting small units, the focus is now on promoting increasingly larger units, mega units being the latest; instead of promoting subsidies/incentives to labour-intensive units, the state now invites state-of-the-art highly capital-intensive technology; and instead of worrying about balanced growth, the emphasis is now an becoming ‘the number one destination’ of corporate investments in the world.”

Comments

Academics urge Azim Premji University to drop FIR against Student Reading Circle

By A Representative A group of academics and civil society members has issued an open letter to the leadership of Azim Premji University expressing concern over the filing of a police complaint that led to an FIR against a student-run reading circle following a recent incident of violence on campus. The signatories state that they hold the university in high regard for its commitment to constitutional values, critical inquiry and ethical public engagement, and argue that it is precisely because of this reputation that the present development is troubling.

'Policy long overdue': Coalition of 29 experts tells JP Nadda to act on SC warning label order

By A Representative In a significant development for public health, the Supreme Court of India has directed the Food Safety and Standards Authority of India (FSSAI) to seriously consider implementing mandatory front-of-pack warning labels on pre-packaged food products. The order, passed by a bench of Justices J.B. Pardiwala and K.V. Viswanathan on February 10, 2026, comes as the Court expressed dissatisfaction with the regulatory body's progress on the issue.

UAPA action against Telangana activist: Criminalising legitimate democratic activity?

By A Representative The National Investigation Agency's Hyderabad branch has issued notices to more than ten individuals in Telangana in connection with FIR No. RC-04/2025. Those served include activists, former student leaders, civil rights advocates, poets, writers, retired schoolteachers, and local leaders associated with the Communist Party of India (CPI) and the Indian National Congress.

Vaccination vs screening: Policy questions raised on cervical cancer strategy

By A Representative A public policy expert has written to Union Health Minister J. P. Nadda raising a series of concerns regarding the national Human Papillomavirus (HPV) vaccination campaign launched on February 28 for 14-year-old girls.

The new anti-national certificate: If Arundhati Roy is the benchmark, count me in

By Dr. Mansee Bal Bhargava* Dear MANIT Alumni Network Committee, “Are you anti-national?” I encountered this fascinating—some may say intimidating—question from an elderly woman I barely know, an alumna of Maulana Azad College of Technology (MACT, now Maulana Azad National Institute of Technology - MANIT), Bhopal, and apparently one of the founders of the MACT (now MANIT) Alumni Network. The authority with which she posed the question was striking. “How much anti-national are you? What have you done for the Alumni Network Committee to identify you as anti-national?” When I asked what “anti-national” meant to her and who was busy certifying me as such, the response came in counter-questions.

Minority concerns mount: RTI reveals govt funded Delhi religious meet in December

By Syed Ali Mujtaba* Indian Muslims have expressed deep concern over what they describe as rising hate speech and hostility against their community under the BJP-led government in India. A recent flashpoint was the event organised by Sanatan Sanstha titled “Sanatan Rashtra Shankhnad Mahotsav” in New Delhi on 13–14 December 2025.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Rajiv Shah Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Development vs community: New coal politics and old conflicts in Madhya Pradesh

By Deepmala Patel* The Singrauli region of Madhya Pradesh, often described as “India’s energy capital,” has for decades been a hub of coal mining and thermal power generation. Today, the Dhirouli coal mine project in this district has triggered widespread protests among local communities. In recent years, the project has generated intense controversy, public opposition, and significant legal and social questions. This is not merely a dispute over one mine; it raises a larger question—who pays the price for energy development? Large corporate beneficiaries or the survival of local communities?

From neglect to progress: The story of Ranavara’s community-led development

By Bharat Dogra Visitors to Ranavara, a remote village in Kherwara block of Udaipur district, are often surprised by its multi-dimensional progress. The village today is known for its impressive school building, regenerated pastures, expanded tree cover, and extensive water conservation and supply works. These achievements are the outcome of sustained community efforts over several years, demonstrating how small, consistent initiatives can lead to significant change.

Search This Blog