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

It's now official: Developed Gujarat's regular, casual workers earn less than 19 top states

By Rajiv Shah
Though not as low as state chief minister Vijay Rupani claims it to be (0.9%), Gujarat’s unemployment rate, at least as reflected in a recent report released by the Government of India, is 4.8%, lower than the national average, 6%. Yet, ironically, the same report, released soon after the Lok Sabha polls came to an end in May 2019, brings to light an even grimmer reality: Lower wages in "model" and "developed" Gujarat compared to virtually the whole of India, including the so-called Bimaru states.

Telangana govt proposes to give unfettered powers to forest officials, 'help' corporates

By Dr Palla Trinadha Rao*
The Telangana Government is contemplating to replace the Telangana Forest Act 1967 with a new law - the Telangana Forest Act (TFA) 2019, trampling the rights of adivasis ensured under the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA Act 2006) and Panchayats Extension to Schedule Area (PESA) Act 1996 both of which are central acts.

RSS, Hindu Mahasabha were 'subservient' to British masters: Nagpur varsity VC told

Counterview Desk
Well-known political scientist Shamsul Islam, associate professor (retired), University of Delhi, in an open letter to the vice-chancellor of the Rashtrasant Tukadoji Maharaj Nagpur University, Dr Siddharthavinayaka P Kane, has taken strong exception to the varsity decision to include RSS’ “role” in nation building in the syllabus of the BA (history) course, citing instances to say that the RSS ever since its birth in 1925 with its Hindutva allies like Hindu Mahasabha led by VD Savarkar worked overtime to “betray the glorious anti-colonial freedom struggle”.

Amaravati: World Bank refusing to share public grievances on Land Pooling Scheme

By Our Representative
A new report, prepared by the advocacy group Centre for Financial Accountability (CFA), New Delhi, has taken strong exception to the World Bank refusing to share its independent assessment of the Land Pooling Scheme (LPS), floated by the Andhra Pradesh government in order to build the new capital.

British companies export 'deadly' asbestos to India, other countries from offshore offices

By Rajiv Shah
“The Sunday Times”, which forms part of the powerful British daily, “The Times”, has raised the alarm that though the “deadly” asbestos is banned in Britain, companies registered in United Kingdom, and operating from other countries, “are involved in shipping it to developing nations”, especially India. India, Brazil, Russia and China account for almost 80% of the asbestos consumed globally every year, it adds.

Beijing-based infrastructure bank 'funding' India's environmentally risky projects

By Our Representative
A new civil society note has questioned the operations of the Beijing-based Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region, seeking to fund projects in India through the Government of India’s National Infrastructure Investment Fund (NIIF), calling it “a risky venture”.

Include all workers exposed to silica dust in anti-TB programme: Govt of India told

Counterview Desk
In a letter, sponsored by well-known civil rights organization, Occupational & Environmental Health Network of India and signed by more than 60 professionals and activists*, Dr Harsh Vardhan, Union Minister of Health and Family Welfare, Government of India, has been told that Indian policy makers shouldn't just acknowledge higher TB risk to mine and stone crusher workers, but also “other silica-exposed workers”.

Universal healthcare? India lacks provisions to 'fight' non-communicable diseases

By Moin Qazi*
Universal health coverage (UHC) -- ensuring that all people receive proper and adequate health care without suffering financial hardship -- is an integral part of achieving the Sustainable Development Goals. It enables countries to make the most of their strongest asset: human capital.

Polygamy in India "down" in 45 yrs: Muslims' from 5.7 to 2.55%, Hindus' 5.8 to 1.77%, "common" in SCs, STs

By Rajiv Shah
Amidst All India Muslim Personal Law Board (AIMPLB) justifying polygamy, saying it “meets social and moral needs and the provision for it stems from concern and sympathy for women”, facts suggest the the practice is down from 5.7 per cent of Muslim families in 1961 to 2.55 per cent in 2006.

TISS Hyderabad: Burden of funds cut falls on students from 'marginalized' sections

Counterview Desk
Top activists associated with the National Alliance of People’s Movements (NAPM), a civil society network, including Medha Patkar, Aruna Roy, Nikhil Dey, Shankar Singh, Dr Binayak Sen, and Prafulla Samantara, has protested against the decision of the Tata Institute of Social Sciences (TISS) administration for “sine die” closure of TISS, Hyderabad Campus, even as “denying” hostel access to Dalit and Adivasi students.