Skip to main content

Gujarat a growth engine? 2014-15 data show state GSDP will grow lower than most Indian states

By Rajiv Shah
Latest budget papers, just released by the Gujarat government in the state assembly, have revealed that, much against the claims of “double digit rate of growth”, Gujarat's gross state domestic product (GSDP) at constant prices (calculated by deducting inflation) rose by 8.76 per cent in the year financial year 2013-14, and is unlikely cross the 7 per cent mark in 2014-15. At current prices (without deducting inflation), they suggest, state's growth rate is one of the poorest in India, putting a question mark of Gujarat being India's growth engine.
What should particularly make the industry-friendly policy makers worried is, this was the third consecutive year that Gujarat's growth rate was in the single digit – the Socio-Economic Review, one of the budget papers, says that in 2011-12 the GSDP grew by 6.1 per cent, and in 2012-13 it grew by 6.7 per cent. Interesting though it may seem, this is against the Government of India's estimate of GSDP rate of 7.66 per cent for 2011-12 and 7.96 per cent for 2012-13, respectively.
What should be a matter of further concern for the state policy makers, who only recently held one of the biggest industrial shows ever in India, Vibrant Gujarat Global Investors' Summit (January 11-12, 2015) with Prime Minister Narendra Modi blessing it, is that advanced estimates (AE) of the Gujarat government suggest, in the current financial year, 2014-15, Gujarat's growth rate is likely to be again in the single digit, and worse than the previous year.
This is clear from the Gujarat government's fiscal responsibility statement, which shows that the state's growth rate at current prices (without deducting inflation) would be 12.1 per cent, as against 16.3 per cent in 2012-13, 10 per cent in 2011-12, and 14.8 per cent in 2011-12. Experts have calculated that, if one deduces the rate of inflation in order to arrive at a constant rate GSDP growth rate, Gujarat's real growth rate would be around 7 per cent.
Interestingly, not only do budget papers give no reason for the recent slow rate in the growth rate in Gujarat. On the contrary, without any explanation,  the state's fiscal responsibility statement loudly claims, basing all its figures on current prices (without deducting inflation), that the “the state has emerged as the Growth Engine of India and its pace of economic growth continues to be higher than the national average.”
The document goes on to say, “The state economy at current prices has recorded an annualized growth rate of 15.49% for the last eleven years (2004-05 to 2014-15), one of the highest in the country demonstrating the sustained trajectory.” However, even at current prices, the state document does not provide any inter-state comparison to suggest whether this is true.
A comparison of the current price growth rate for 2014-15, as found reflected in state budget documents (12.1 per cent) with the data of growth rate provided by the latest Government of India's 14th Finance Commission document suggest that Gujarat has performed worse than all major Indian states, except two -- Assam and Jammu & Kashmir.
State-wise figures – Andhra Pradesh (13.67 per cent), Bihar (17.22 per cent), Chhattisgarh (14.24 per cent), Haryana (16.16 per cent), Jharkhand (13.09 per cent), Karnataka (12.78 per cent), Kerala (12.81 per cent), Madhya Pradesh (14.67 per cent), Maharashtra (12.70 per cent), Odisha (14.92 per cent), Punjab (12.93 per cent), Rajasthan (15.86 per cent), Tamil Nadu (13.73 per cent), Telangana (15.38 per cent), Uttar Pradesh (13.07 per cent), Uttarakhand (17.01 per cent), and West Bengal (13.06 per cent).
The growth rate of states which perform worse than Gujarat in 2014-15, Assam and Jammu & Kashmir, is 12.02 per cent and 11.38 per cent, respectively. Even then, the Gujarat government's fiscal responsibility statement proudly claims, “With a reasonable growth rate and consistent interest rates in the national economy, the Advanced Estimates for FY 2014-15 indicates that the State is poised to register a growth rate of 12.1% over the last year.”
The 14th Finance Commission documents puts Gujarat's growth rate at 13.63 per cent -- and, if one takes this figure as correct, even then as many as 11 states perform better in 2014-15.

Comments

TRENDING

Muted profit margins, moderate increase in costs and sales: IIM-A survey of 1000 cos

By Our Representative  The Indian Institute of Management-Ahmedabad’s (IIM-A's) latest Business Inflation Expectations Survey (BIES) has said that the cost perceptions data obtained from India’s business executives suggests that there is “mild increase in cost pressures”.

What's Bill Gates up to? Have 'irregularities' found in funding HPV vaccine trials faded?

By Colin Gonsalves*  After having read the 72nd report of the Department Related Parliamentary Standing Committee on alleged irregularities in the conduct of studies using HPV vaccines by PATH in India, it was startling to see Bill Gates bobbing his head up and down and smiling ingratiatingly on prime time television while the Prime Minister lectured him in Hindi on his plans for the country. 

Magnetic, stunning, Protima Bedi 'exposed' malice of sexual repression in society

By Harsh Thakor*  Protima Bedi was born to a baniya businessman and a Bengali mother as Protima Gupta in Delhi in 1949. Her father was a small-time trader, who was thrown out of his family for marrying a dark Bengali women. The theme of her early life was to rebel against traditional bondage. It was extraordinary how Protima underwent a metamorphosis from a conventional convent-educated girl into a freak. On October 12th was her 75th birthday; earlier this year, on August 18th it was her 25th death anniversary.

Alleged killing of another Bangladesh youth inside Indian territory: NHRC inquiry sought

By Kirity Roy* There was yet another incident of the killing of a Bangladeshi youth by the Border Security Force personnel attached with ‘Barthar’ BOP of ‘G’ Company of 75 BSF Battalion. In last five years several incidents of killings happened under this police station’s jurisdiction and the cases will get the award as “Not Guilty” as usual.

Govt putting India's professionals, skilled, unskilled labour 'at mercy of' big business

By Thomas Franco, Dinesh Abrol*  As it is impossible to refute the report of the International Labour Organisation, Chief Economic Advisor Anantha Nageswaran recently said that the government cannot solve all social, economic problems like unemployment and social security. He blamed the youth for not acquiring enough skills to get employment. Then can’t the people ask, ‘Why do we have a government? Is it not the government’s responsibility to provide adequate employment to its citizens?’

IMA vs Ramdev: Why what's good or bad for goose should be good or bad for gander

By Dr Amitav Banerjee, MD* Baba Ramdev and his associate Balkrishna faced the wrath of the Supreme Court for their propaganda about their Ayurvedic products and belittling mainstream medicine. Baba Ramdev had to apologize in court. His apology was not accepted and he may face the contempt of court with harsher punishment. The Supreme Court acted on a public interest litigation (PIL) moved by the Indian Medical Association (IMA).

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Modi model, Hindutva icon 'justified' alliance with Muslim League before Independence

By Shamsul Islam*  Our PM describes himself as ‘Hindu’ nationalist and member of RSS. He proudly shares the fact that he was groomed to be a political leader by one of the two fathers of the Hindutva politics, MS Golwalkar (the other being VD Savarkar) and given the task of establishing Hindutva polity in India after eradicating secularism.

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

Indians witnessing 'regression to Hindutva politics' under Modi ahead of elections

By Bhabani Shankar Nayak*  The forthcoming general election in India, scheduled from April 19, 2024, to June 1, 2024, to elect the 543 members of the 18th Lok Sabha and the new Government of India, carries immense significance for the preservation of India's identity as a liberal, secular, and constitutional democracy.