http://www.asianage.com/columnists/modi-s-gujarat-isn-t-roaring-645
Modi’s Gujarat isn’t roaring Oct 14, 2013 - - [image: Yogi Aggarwal] <http://www.asianage.com/yogi-aggarwal-473> Yogi Aggarwal <http://www.asianage.com/yogi-aggarwal-473> * Gujarat ranks around the middle in most other rankings, such as average per capita household expenditure, poverty, literacy, infant mortality, immunisation and school facilities, and fares near the bottom in female to male sex ratio * The Raghuram Rajan panel report on state backwardness on which funds could be allotted to states has thrown some cold water on the much-hyped claims of the “Gujarat development model”. Narendra Modi’s development model has been lauded by economists like Jagdish Bhagwati, and is drawing strong support from corporate bosses. What is significant about the Rajan report, submitted to the government last month, is that it sees development not in the uni-dimensional terms of gross domestic product growth but proposes a multi-dimensional index (MDI) that categorises the backwardness of states based on monthly per capita consumption, expenditure, education, health, household amenities, poverty rate, female literacy, per cent of SC/ST population, urbanisation rate, financial inclusion and connectivity. This inclusive model is a better barometer of development that tries to measure broader living conditions than one in which GDP growth is pre-eminent. Not surprisingly, it places Kerala, Goa and Tamil Nadu at the top of the development ladder, and roundly surmises Orissa and Bihar as the least developed states. What comes as a surprise to Modi acolytes is that Gujarat lies around the middle in the MDI, ranking among the less developed states, and 12th in the overall ranking. It has been widely known that Gujarat, despite having one of the highest state GDP growth rates in the country, has not done particularly well in health, education, female literacy and financial inclusion. For instance, Amartya Sen and Jean Dreze point out in their admirable book, An Uncertain Glory, though Gujarat is second among states (after Himachal Pradesh), in growth in per capital state gross domestic product. It ranks around the middle in most other rankings, such as average per capita household expenditure, poverty, literacy, infant mortality, immunisation and school facilities, and fares near the bottom in female to male sex ratio. And even in standard parameters of GDP growth, Mr Modi’s boast about a roaring Gujarat is not as robust as it is made out to be. Gujarat has been a state of entrepreneurs and traders for centuries, its development held back by an arid climate that arrested agricultural growth. The state grew at a compounded annual growth rate of 10.1 per cent between fiscal years 2005 and 2012, beating the national average of eight per cent. Between 1994 and 2000, it grew at an annual pace of 7.8 per cent with the manufacturing sector doubling in size, and with the national economy growing slower rate at that time, the difference in growth rates was larger. Despite boasts of every village having electricity, the 2011 census showed that 11 lakh Gujarati households did not have electricity connections. A misconception arises about the agricultural growth rate which has variously been estimated between eight and 10 per cent. But Yoginder Alagh, a reputed agriculture economist, argues, “A four per cent plus annual growth in agriculture is seldom sustained in world history,” And, avoiding statistical errors such as “choosing either a bad initial year or a bumper terminal year, and the second is using current rather than constant prices… we can splice the data to arrive at an agricultural growth estimate of 5.1 per cent between fiscal years 2003 and 2011. Gujarat’s farm growth has been less than 10 per cent, but it still remains among the highest farm growth rates attained anywhere.” There are other indications that agriculture has not had as rapid a growth as is made out. A study “Have Gujarat and Bihar Outperformed the Rest of India?” by R. Nagaraj and Shruti Pandey in the Economic and Political Weekly contend, “We find that between 2001-02 and 2011-12, Gujarat’s share in agriculture GSDP of all states went up from around five per cent to seven per cent. However, if one takes a longer time horizon from 1993-94, then the observed surge in Gujarat’s agriculture in the last decade merely represents a recovery of the lost ground of the 1990s.” No less intriguing is industrial growth in the state. While Gujarat’s SGDP has remained constant at around seven to eight per cent of the national total, Nagaraj and Pandey show that “incremental manufacturing output is mostly coming from a single industry — petroleum refining — whose share in gross value added in the state’s registered manufacturing has risen from four per cent in 2000-01 to nearly 25 per cent a decade later. This is on account of output from just two refineries — the shore-based refineries of Reliance and Essar in Jamnagar.” Around a third of the country’s refining capacity is at the two entirely export-oriented refineries at Jamnagar. Reliance with oil refining capacity of 60 million tons a year, and Essar with a capacity of a third of that. The Reliance website gave total exports of `239,000 crore (or $44 billion) in the latest year from its refinery. But the local linkages (of employment, trade and ancillary industry) of this import-dependent, capital-intensive, coast-based, export oriented industry, are practically non-existent, while it adds a huge amount to the state’s GDP. The Modi government has been suspiciously generous in giving land for industrial projects. The main beneficiary is the Adani group. Last year in a reply to a question in the state Assembly, the state revenue minister, Anandiben Patel, informed the house that 5,465 hectares (or 54.6 sq. km.) of land had been given to the Adani Group of Companies for a total of `60 crore. This works out to a ridiculous rate of `10,000 per hectare of industrial land for which the market rate is at least a thousand times higher. The Modi regime has also acquired 960 hectares land for the Tatas for their Nano car project at Sanand near Ahmedabad, most of it acquired from seven surrounding villages. It is reported that Ford and Maruti are also planning to locate there. The policy has often rendered farmers landless, often at low rates for their land, but gladdened the heart of industry. It is not surprising that Modi is being projected as a champion of the corporate world. The writer is a Mumbai-based freelance journalist -- You received this message because you are subscribed to the Google Groups "Green Youth Movement" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send an email to [email protected]. Visit this group at http://groups.google.com/group/greenyouth. For more options, visit https://groups.google.com/groups/opt_out.
