The “Gujarat Model”

 

Is the hype around a “Gujarat Model” justified, considering many states have not only outperformed Gujarat on growth, but also on HDI parameters?

Much is made of the economic miracle witnessed in Gujarat under the rule of Mr Narendra Modi. He, and his supporters claim that Gujarat topped in the economic performance under Mr. Modi’s rule. Does data back this claim?

The claims

Mr. Modi held something called a “Vibrant Gujarat” summit very regularly. A lot of hype was generated around them. However, If ANY single one of the vibrant Gujarat summits had been as successful as Modi’s propaganda claimed them to be, there should have been no need for any more of them.

Think about it, NCR, Maharashtra have attracted more investment that Gujarat, without doing this circus, using the state’s taxpayer money.

It is all an excuse to use Gujarat government funds to pay the PR Firm APCO for Mr Modi’s personal publicity. Modi also gets a chance to get some media bytes from the CEOs of big companies who bother to show up for a bit of sycophancy, and a chance to tweet his own praises by any of them.

For example, check how 52 lakh jobs were being created after an investment of $450 billion in 2011.

Similarly, when a Gujarat State owned company GSPC discovered some Gas in the Krishna Godavri basin, Mr Modi made very tall claims about this gas being worth Rs 2,20,000 Crores. After investing Rs 20,000 Crores on further exploration, against expert advice, this claim turned out to to be nothing but a Jumla, and Govt owned ONGC was quietly forced to buy assets of GSPC. So, apart from these bombastic claims and the razzmatazz, does the actual data back the claims about this so called “Gujarat Model”?

Growth Data

I have grabbed the percentage GSDP (Gross State Domestic Product) growth of all states from the Niti Aayog website and created a table for comparison. In order to compare the growth between states, I used the timeline for which the data was available for all states (2005-2014), and normalized the data to start at 100.

Put simply, if all states GSDP was at 100 in 2005, where did it reach in 2014?

During the period of 2005-2014, Gujarat ranked 14th among all the states and Union Terriroties in India, in real GSDP growth.

GSDP-1

Real Gross State Domestic Product, % growth

Now, some very small states such as Sikkim are outliers, but even if we exclude them, it is clear that several  larger states such as Uttarakhand, Telangana, Bihar, Rajasthan, MP have out-performed Gujarat in the GSDP growth. (Graph below shows some of the larger states, the red line shows Gujarat’s growth)

Human Development Indicator (HDI) factors

What’s more, some of these states have done much better than Gujarat on the Human Development Indicator (HDI) factors as well. The HDI is calculated based on life expectancy, income, and education and is used by the United Nations to judge quality of life. In fact, under Mr. Modi’s rule, Gujarat performed poorly, and lost its relative lead on HDI scores, as a study by some LSE (London School of Economics) scholars comparing economic development of Indian states showed.

states-e1396878807387

In particular, its statistics on women and children factors are relatively very poor, and in many of these, Gujarat is usually clubbed together with much poorer states, instead of the neighbouring Maharashtra, which is a relatively prosperous state.

20150704_asc786_1

The full set of figures on immunisation rates, suggests a striking lack of progress in Gujarat under Mr Modi. Just after he took office in 2001, 54% of children were being fully immunised against preventable diseases—well above the national average of 46%. Gujarat was then 16th-best of 31 Indian states and territories assessed. By 2014 when he left there was only a tiny improvement, to 56.2%, far below the national average of 65%. Gujarat’s rank had fallen to 21st of 29 states surveyed. Most remarkable, it was behind even notably poor and backward states such as Bihar (see chart).

number-of-women-per-1-000-men-all-india-gujarat-kerala-chandigarh-mizoram_chartbuilder

Gujarat’s All-India ranking, based on sex ratio: 2011: 24th, down from17th in 1991.

Gujarat’s All-India child malnutrition ranking, where the highest rank has the least number of malnourished children: 2011 21st, versus 20th in 1998.

When asked about child malnutrition in Gujarat in 2012, Mr Modi told the Wall Street Journal

“Gujarat is also a middle-class state. The middle class is more beauty conscious than health conscious – that is a challenge. If a mother tells her daughter to have milk, they’ll have a fight. She’ll tell her mother, ‘I won’t drink milk. I’ll get fat.’ They have money but she’s beauty conscious, she’s not health conscious.”

Also, despite a much hyped success of Kanya Kelaveni scheme, Gujarat still ranks 20th among 21 states in girl child education

Why then, do we not hear about a “Telangana Model” or “Tamil Nadu Model” ?

References:

  1. LSE Study comparing economic development of Indian states
  2. Gujarat, by numbers
  3. Of secrecy and stunting-The Economist report on Nutrition in India, Jul 4th 2015
  4. Sparing Mr Modi’s blushes – Missing data should embarrass the prime minister, The Economist, Jun 27th 2015
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