Tag Archives: Reserve Bank India

Is Narendra Modi’s Gujarat Really Vibrant?

by

2


page1

Everything is black and white somewhere! Gujarat‘s grey areas are now being increasingly noticed. While Gujarat may have a high per capita income leading to the rhetoric of a ‘vibrant Gujarat’, much on the lines of ‘India shining’, its economic model seems to be faulty somewhere with glaring deficiencies in certain developmental indexes. Few are aware that Gujarat has been faring poorly in many areas for many years now. About two decades back, Gujarat’s growth story was quiet different. The state had grown between 12 and 13percent when the national average was only 6percent. Gujarat today has an average growth rate of 11percent with the national growth rate at 10percent. This should tell some of the story. Gujarat is now very much rich. In What? Poor People!

Gujarat may be creating some of India’s wealthiest, but it is not known widely that the state has the highest percentage of poor population, an incredible 31.8percent. 31.8percent population of Gujarat are below the poverty line, followed by Andhra Pradesh (29.9 per cent), Tamil Nadu (29.8 per cent), Himachal Pradesh (22.9percent), Punjab (20.9percent), Kerala (19.7percent), Jammu and Kashmir (13.2percent) and Haryana (2.1percent).

page2

On the investment front too, the actual story is quite different. In 2005 claims for Rs 106161 crore had been made for investment. Out of that, Rs 74019 crore (63percent) was made as stated by Chief Minister, but the truth is quite different. According to the information procured under RTI, only Rs 24998 crore (23.52percent) projects were under implementation. Similarly in 2007, Modi Government claimed to have mobilized capital investments of Rs 451835 crore. The State Government claimed to have made an investment of Rs 264575 crore but as per the figures of Industry Commissioner of Gujarat, only projects worth Rs 122400.66 crore (27.08percent) were under implementation. All in all, in 2003, 2005 and 2007, only 20.28percent of projects were implemented in Gujarat.

Gujarat being the number one destination for Foreign Direct Investment (FDI) is also proving to be a myth. In the Reserve Bank India’s (RBI) 2011 10-year report on Foreign Direct Investment (FDI), FDI inMaharashtra was worth Rs 17 lakh crore, in Delhi, Haryana and NCR (including some parts of UP) it was worth Rs 10 lakh crore, but in Gujarat in the last 10 years, it was just Rs 2.8 lakh crore.

Moreover, Gujarat also lags behind in social development index. Reserve Bank of India in its February 2007 report placed Gujarat as 17th among 18 large states in social sector budget allocation. With 31.6 per cent budgetary expenditure on social sector, Gujarat dropped from 12th spot in 1991(then there were 15 large states category) to 17th of the 18 large states list, as expenditure on social sector fell considerably during Modi’s regime. Former President Abdul Kalam had also in the past commented on the need for Gujarat to focus more on its social development index.

page3

The vibrancy rhetoric might have moved on from “investment drive” to “inclusive growth”, but the reality is otherwise. The Survey of Industries data shows workers’ share as wages in Gujarat fell from 23 to 8percent in 2010. The gap between incomes of the rich and the poor has also widened beyond the national average, states a 2010 research by Rajesh Shukla of the National Council of Applied Economics.

 Coming to educational standard, Gujarat fares worse than Bihar. The Annual Status of Education Report by Pratham, a NGO, puts Gujarat’s students behind their Bihar counterparts. The report sponsored by the likes of Google, Oxfam and UNICEF states that the percentage of students reading textbooks, doing basic mathematical operations, telling time are far lower in Gujarat compared to Bihar.

Gujarat fares poorly on hunger index as well. A 2010 report by IFPRI, a U.S. based organization, favoured by 64 governments, had listed Gujarat among the five worst performing states of India in hunger levels, along with Jharkhand, Bihar, Madhya Pradesh and Chhattisgarh. Gujarat was shockingly ranked 13th in the 18 states list.

page4

Employment and agriculture in the state are not in good shape either. The agricultural production has been declining steadily. From 65.71 lakh tones in 2003-2004, the agricultural productivity dropped to 51.53 in 2004-2005. A NSS (National Sample Survey) conducted survey of 2005 had revealed that approximately 40percent of state’s farmers want to leave agriculture. Recent studies have also shown that in the last decade, agriculture and labor both suffered extensively in Gujarat.

 What about Infant Mortality Rate (IMR)? It is the same story! IMR in Gujarat was 69 per 1,000 in 1991 compared to 80 of India. While the national IMR became 58 per 1,000 in 2005, in Gujarat it became 54. So, while India on the whole really did really well to cut down its IMR, Gujarat’s performance was not really inspiring.

On the whole Gujarat is facing a great disparity in the levels of living conditions, between rich and poor poor, men and women, majority and minorities. Narendra Modi will have to look into these lacking spheres before he can really chant the slogan of ‘Vibrant Gujarat’.

Related articles