Gujarat: Myth and reality

[Yusuf]

Gujarat an it's economic story will never go out of the news.

_______________________


A war of words has erupted between the chief ministers of Bihar and Gujarat. Bihar's chief minister Nitish Kumar has slammed Narendra Modi for taking potshots at the state's slow socio-economic growth. The altercation began with Modi saying that caste politics has ruined states like Bihar and Uttar Pradesh. Hitting back, Nitish has said that Modi should look at the conditions in his own state before criticising others.

For the last several years, Modi has been successful in projecting his "vibrant Gujarat" as a role model of economic growth and himself as ''Vikas Purush". Though one must give due credit to Modi for his effective skills in making projections, one must also critically analyse this "growth story of Gujarat" based on facts and figures. Regretfully, as one examines the facts since Modi came to power in Gujarat in 2001, the story appears to be hollow and, at times, contrary to what is being projected.

First, about the rate of economic growth. During 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 8.68%. But so is the case with other major states such as Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. In fact, Gujarat was ranked second after Rajasthan (8.34%) in the first period and third after Uttarakhand (11.81%) and Haryana (8.95%) in the second period. What is remarkable, Bihar and Orissa, the two most backward and poverty-stricken states, have also shown growth pick up from 4.70% and 4.42% in the first period to 8.02% and 8.13% in the second period. Even smaller states like Sikkim and Arunachal Pradesh have registered growth of 11.01% and 8.96%, respectively.

During 2001-04, the rate of industrial growth for Gujarat was 3.95%, and during 2005-09, it was 12.65%. In isolation, this appears to be a phenomenal jump, but not so when compared to some other states. During these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%. Thus, the hitherto industrially backward states have far surpassed Gujarat.

In FDI, too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs 3.61 lakh crore and Rs 2.99 lakh crore more than Gujarat without much fanfare and Modi's much-hyped industrial summits.

In the area of credit-deposit ratio, Gujarat is far behind other major states. In 2010, Gujarat's share in total deposits of the scheduled commercial banks was 4.70%, as against 5.42%, 6.20%, 6.34% and 26.60% for Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, respectively. The share of Gujarat in total credit disbursed by these commercial banks was 4.22%; while the same for Maharashtra, Karnataka and Tami Nadu was 29.75%, 6.71% and 9.61% respectively.

The amount of per capita deposit and per capita credit for Gujarat was Rs 37,174 and Rs 24,268; while for Tamil Nadu, it was Rs 42,580 and Rs 47,964; Karnataka Rs 49,598 and Rs 38,154; and Maharashtra Rs 1,10,183 and Rs 89,575. Even Kerala did better than Gujarat with Rs 43,890 and Rs 27,912.

In terms of per capita income (PCI), in 2011, Gujarat ranked sixth among major states with PCI of Rs 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471), Punjab (Rs 67,473), Tamil Nadu (Rs 72,993) and Uttara-khand (Rs 68,292).

What about inclusive growth in Gujarat? Though Gujarat, with 31.8% people below the poverty line did better than Maharashtra and Karnataka, it still lagged behind Kerala, Punjab, Himachal Pradesh and Haryana, where poverty levels were 19.7%, 20.9%, 22.9% and 24.1%, respectively.

On three important social indicators, viz life expectancy at birth (LEB), mean years of schooling (MYS) and school life expectancy (SLE), Gujarat is far behind some other states. In Gujarat, the LEB during 2002-06 was 64.1 years and it ranked ninth among major Indian states. In the areas of MYS and SLE, during 2004-05, it ranked seventh and ninth, respectively. Kerala ranked first in all three indicators. Even Maharashtra, Himachal Pradesh, Punjab, Haryana, Tamil Nadu and Karnataka performed much better than Gujarat.

With respect to Human Deve-lopment Index (HDI), Gujarat's story is devastating. The HDI for Gujarat, in 2008, was 0.527 and it ranked 10 {+t} {+h} among major states. Kerala stood first (HDI: 0.790), Himachal Pradesh scored 0.652, Punjab 0.605, Maharashtra 0.572 and Haryana 0.552. With respect to three HDI components - income, health and education - Gujarat does not present a shining story. In this respect, states like Kerala took the lead in every sector, while Punjab, Himachal Pradesh, Haryana, Maharashtra, Tamil Nadu and West Bengal did better than Gujarat.

It is found that inequality with respect to income, education and health is higher in Gujarat than some of the major states. Shockingly, in terms of hunger - as revealed by the 'State Hunger Index 2008' - Gujarat ranked 13th among 17 big states and worse than Orissa.

In Gujarat, the percentage of women suffering from anaemia has risen from 46.3% in 1999 to 55.5% in 2004, and amongst children from 74.5% to 80.1%. The conditions of dalits and women have deteriorated during the last decade; while those of Muslims and tribals are still worse.

Thus, Gujarat's growth story as claimed by Modi is more a myth than reality. But it is also imperative that other states in the country make concerted efforts to secure higher and also inclusive growth, rather than getting enamoured with the Gujarat growth story. Also, for the people of Gujarat, it's time for introspection and putting right efforts in the direction of making Gujarat a truly "vibrant" state.

The writer is a member of the Rajya Sabha and former member, Planning Commission.

http://m.timesofindia.com/PDATOI/articleshow/14032015.cms

 

[anoop_mig25]

Well presently i donot have time but would centrally go in future

 

[Sakal Gharelu Ustad]

First, about the rate of economic growth. During 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 8.68%. But so is the case with other major states such as Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. In fact, Gujarat was ranked second after Rajasthan (8.34%) in the first period and third after Uttarakhand (11.81%) and Haryana (8.95%) in the second period. What is remarkable, Bihar and Orissa, the two most backward and poverty-stricken states, have also shown growth pick up from 4.70% and 4.42% in the first period to 8.02% and 8.13% in the second period. Even smaller states like Sikkim and Arunachal Pradesh have registered growth of 11.01% and 8.96%, respectively.

During 2001-04, the rate of industrial growth for Gujarat was 3.95%, and during 2005-09, it was 12.65%. In isolation, this appears to be a phenomenal jump, but not so when compared to some other states. During these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%. Thus, the hitherto industrially backward states have far surpassed Gujarat.

In FDI, too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs 3.61 lakh crore and Rs 2.99 lakh crore more than Gujarat without much fanfare and Modi's much-hyped industrial summits.

In the area of credit-deposit ratio, Gujarat is far behind other major states. In 2010, Gujarat's share in total deposits of the scheduled commercial banks was 4.70%, as against 5.42%, 6.20%, 6.34% and 26.60% for Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, respectively. The share of Gujarat in total credit disbursed by these commercial banks was 4.22%; while the same for Maharashtra, Karnataka and Tami Nadu was 29.75%, 6.71% and 9.61% respectively.

The amount of per capita deposit and per capita credit for Gujarat was Rs 37,174 and Rs 24,268; while for Tamil Nadu, it was Rs 42,580 and Rs 47,964; Karnataka Rs 49,598 and Rs 38,154; and Maharashtra Rs 1,10,183 and Rs 89,575. Even Kerala did better than Gujarat with Rs 43,890 and Rs 27,912.

In terms of per capita income (PCI), in 2011, Gujarat ranked sixth among major states with PCI of Rs 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471), Punjab (Rs 67,473), Tamil Nadu (Rs 72,993) and Uttara-khand (Rs 68,292).

The guy is comparing apples with oranges. Maintaining high growth rate over a bigger base continuously is much more difficult. And I lost my way during the article after reading the figures on PCI. They are all hoax. Punjab, Uttarakhand are way below Gujarat.
Sources:
Press Information Bureau: Government of India news site, PIB Mumbai website, PIB Mumbai, Press Information Bureau, PIB, India’s Official media agency, Government of India press releases, PIB photographs, PIB photos, Press Conferences in Mumbai, Union
'U'khand per capita income at Rs 56,000'

This guy has lost all credibility and should stop fabricating indicators!!

 

[Sakal Gharelu Ustad]

First, about the rate of economic growth. During 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 8.68%. But so is the case with other major states such as Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. In fact, Gujarat was ranked second after Rajasthan (8.34%) in the first period and third after Uttarakhand (11.81%) and Haryana (8.95%) in the second period. What is remarkable, Bihar and Orissa, the two most backward and poverty-stricken states, have also shown growth pick up from 4.70% and 4.42% in the first period to 8.02% and 8.13% in the second period. Even smaller states like Sikkim and Arunachal Pradesh have registered growth of 11.01% and 8.96%, respectively.

During 2001-04, the rate of industrial growth for Gujarat was 3.95%, and during 2005-09, it was 12.65%. In isolation, this appears to be a phenomenal jump, but not so when compared to some other states. During these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%. Thus, the hitherto industrially backward states have far surpassed Gujarat.

In FDI, too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs 3.61 lakh crore and Rs 2.99 lakh crore more than Gujarat without much fanfare and Modi's much-hyped industrial summits.

In the area of credit-deposit ratio, Gujarat is far behind other major states. In 2010, Gujarat's share in total deposits of the scheduled commercial banks was 4.70%, as against 5.42%, 6.20%, 6.34% and 26.60% for Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, respectively. The share of Gujarat in total credit disbursed by these commercial banks was 4.22%; while the same for Maharashtra, Karnataka and Tami Nadu was 29.75%, 6.71% and 9.61% respectively.

The amount of per capita deposit and per capita credit for Gujarat was Rs 37,174 and Rs 24,268; while for Tamil Nadu, it was Rs 42,580 and Rs 47,964; Karnataka Rs 49,598 and Rs 38,154; and Maharashtra Rs 1,10,183 and Rs 89,575. Even Kerala did better than Gujarat with Rs 43,890 and Rs 27,912.

In terms of per capita income (PCI), in 2011, Gujarat ranked sixth among major states with PCI of Rs 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471), Punjab (Rs 67,473), Tamil Nadu (Rs 72,993) and Uttara-khand (Rs 68,292).

The guy is comparing apples with oranges. Maintaining high growth rate over a bigger base continuously is much more difficult. And I lost my way during the article after reading the figures on PCI. They are all hoax. Punjab, Uttarakhand are way below Gujarat.

Sources:
Press Information Bureau: Government of India news site, PIB Mumbai website, PIB Mumbai, Press Information Bureau, PIB, India�s Official media agency, Government of India press releases, PIB photographs, PIB photos, Press Conferences in Mumbai, Union
'U'khand per capita income at Rs 56,000'

If someone is fudging a basic indicator like PCI, he would definitely fudge the derived indicators like HDI. This guy has lost all credibility and should stop fabricating indicators!!

 

[sehwag1830]

Complete joke article . Unlike Bihar and TN, Gujarat doesn't run huge fiscal deficit. Bihar gets grant of 6 billion $ annually from GOI. TN is in huge debt problem. Gujarat can easily increase its GDP growth rate by another 2% if they run deficit like other states.

 

[parijataka]

The author Bhalchandra Mungekar is also a member of Indian National Congress. I wonder why none of Maharashtra politicians never talk about the malnutrition deaths of young children in Vidarbha region or the increasing number of farmer suicides inthe state.

 

[parijataka]

Pasting a rather long comment in TOI to the article by a Gujarati Muslim businessman from Vadodara -

The content and statics(without source reference) of this article is useless since the ground reality is that Congress has not won elections since 1974 in Gujarat. Surely that means even before CM Modi the people of Gujarat were dismayed with and rejected Congress. My own opinion on the growth/progress of my state is that infrastructure = roads,electricity,ports & etc.. Is second to none if not best within India. For those who would like to use Maharashtra, TN and other states as better examples are entitled to their opinion however as a well traveled businessman within and outside of India I know that the maintenance of the infrastructure is far more honest and effective within Gujarat. For those who have targeted CM Modi for 2002 riots I can only say that riots have occured prior to 2002 as well in Gujarat and in each riots when stones & bricks were being thrown & my house was being set ablaze it was my ordinary Hindu neighbours who provided shelter and I also have hears stories where Muslims who targeted Hindus in the riots were provided shelter and protection by their Muslim neighbours. As a Muslim and as an Indian I can say proudly that in Varodra in Gujarat I have my home and there is no better place within India that I would move to with my family. Gujarat's crime levels are the lowest if not the lowest within country. One must see for themself to believe this but Gujarati women (Hindu & Muslim) are safe on the streets of Gujarat even at midnight as compared to Other states especially our capital (security fortress of politicians but not for the women of Delhi) Gujarati farmers are the most happiest farmers within India due to the availability of their basic requirements like water, (including modern irrigation techniques) state govt has invested in and promoted as joint collabration with Israeli agriculture sector. Granted electricity may not be cheapest in Gujarat but it is available 24hrs even in sizzling hot summers. Thanks to the basic requirements like water, electricity availability and excellent roads, ports, & security Gujarat is attracting further investment in Manufacturing sector, and as a result creating employment, furling the increasing growth within services sector. It's simple logic agriculture growth leads to growth in manufacturing which leads to growth in services. (granted othe macro, micro factors, technology, & govt policies effect the progress) Industrialist do not come to Gujarat as they are getting cheap land from poor by govt but they come due to the infrastructure,semi- skilled labour and also largely due to less red tape within the Gujarat govt & it's public/govt institution which is why Mr Tata located it's plant in Gujarat. As per all Modi haters/critics he has been elected 3 times by Gujarat public & Inshallah (God willing) he will continue. For selfish reasons I am glad that a efficient & effective statesman is our CM rather sitting in Delhi (although that would benefit our nation overall) sectors)

 

[Yusuf]

Pasting a rather long comment in TOI to the article by a Gujarati Muslim businessman from Vadodara -

I have a feeling that this businessman is a Bohra

 

[SLASH]

Ask any well travelled businessman in India whether the Gujarat story is real or a myth and you will get your answer.

 

[brahmastr]

Gujarat already won world's 2nd best state award from UN. and 1st best is not from India..

Hence these morons shall go elsewhere to sell their yello journalism.

 

[parijataka]

A Statistics Hitjob to Deny the Gujarat Development Story

This is a rejoinder to the article 'Gujarat: Myth and Reality' by Muthuraman on Center Right India website that debunks the selective use of statistics by Dr Bhalachandra Mungekar, a Congress nominated Rajya Sabha MP [I have mentioned him as member of INC in last post, but could not edit later, consider this a correction.] and former Member of the Planning Commission. Shameful how a such a learned person as Dr Mungekar has considered it fit to fudge figures to malign a leading state of the country and its development. SGU has already given a few links that prove the opposite, i.e. Gujarat development is not a myth but reality, something all Indians know and dont need learned people to prove. Congress party needs a biiiiig kick on its butt for all their dirty tricks.


A Statistics Hitjob to Deny the Gujarat Development Story

With much grudge, one must hand it to Congress. How can it convince well-educated and qualified professionals to twist facts, take selective data and present a skewed picture when the truth stares on their face otherwise, clearly as election propaganda?! May be this is part of the price that is expected by Congress from its "nominated members" to the "house of the elders"!

The article takes a leaf from the famous words in Mahabharata – "Ashwathama Athaha Nakunjaraha" (Ashwathama dead, the elephant)! While the statements made per se in the article may not be outright lies, the article clearly obfuscates important information to present a misleading picture.

Random periods for comparison

The article uses random periods for comparison, and given the author's title as "former member of planning commission" we cannot ascribe this random period usage to non-availability of data or oversight but plain and simple obfuscation! Sample these:

Growth rate used is till 2010, whereas 2011 actuals and 2012 estimates are very much available! When these two years are included, Gujarat tops the list of all major states in terms of aggregate growth rate between 2001 and 2012. But the author chooses to end comparison till 2010 probably because it suits his purpose!

â– Industrial growth rate was chosen until 2009, leaving 3 full recent years!
â– For Life Expectancy at Birth, the date chosen in 2006. For Mean Years of Schooling, it is 2005. For HDI, it is 2008. And in none of these cases, temporal comparison over 2001 data is made. That is probably because most of these parameters were weak in Gujarat in 2001 itself, and has shown decent improvement, though far from levels of Kerala.
â– Share of population below poverty line – data used in this column by the author was of 2004-05, whereas in the same source (the author's previous employer Planning Commission's data, of course!), 2009-10 data is available which shows a very different picture! Even worse, the column doesn't mention that this is 2004-05 data, as it goes against the grain of the column title!
Just to set the record straight, latest year figures are available for all the above-mentioned parameters (except HDI), which the author (deliberately?) chose to ignore!

Inappropriate selection of parameters

CD Ratio: The desperation of the author to berate Gujarat is evident when, of all the parameters on earth, the author chose to compare Credit-Deposit ratio (CD Ratio) of banks, and there too, gives absolute comparison as on date, instead of comparison over a period. CD Ratio, even at the level of a bank, or pan-India for banking system, is a sub-optimal parameter to measure a bank's efficiency that was in vogue in 1960's and 70's. Now, with advanced measurement techniques emerging in line with Basel II requirements, this is an outdated parameter to measure anything useful!

FDI and job creation potential: Similarly, on FDI, the author chooses to highlight the quantum of MoU signed and the announced potential employment creation from these MoUs, to show Gujarat in bad light as though the investment that comes into this state are inefficient in terms of employment creation! This parameter itself is a dubious one, as the employment potential at the time of signing MoUs is anybody's guess! Even here, the data on Gujarat seem grossly erroneous. The author claims "During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs" which is clearly wrong. Just in a single event – the 2009 Vibrant Gujarat, as per the State Govt. press release (for all states, the sources are respective state press releases) "the two-day Vibrant Gujarat Global Investors' Summit 2009, which concluded in Ahmedabad on January 13, attracted promised investments of over Rs. 12 lakh crore. More than 8,500 Memoranda of Understanding were signed between the State government and the intending investors. These have the potential to create over 25 lakh additional employment opportunities".

Human Development Index: The author thunders with confidence thus: "With respect to Human Development Index (HDI), Gujarat's story is devastating. The HDI for Gujarat, in 2008, was 0.527 and it ranked 10th among major states". What is left unsaid is, the HDI rank of Gujarat was no better in 2001! And the improvement of HDI in Gujarat is a shade better than national average (Link Refer Page 302)

When you have a large data set in front of you, the figures you choose to use should be decided based on the importance of the parameter and the consistency of measurement. As seen above, this article fails on both.

The Unsaid Part

Now, let us examine the unsaid parts of the Gujarat story.

Quality of Growth: The real issue in the growth rate of GSDP (Gross State Domestic Product i.e. GDP of the state) is not the absolute growth rate itself (which in any case differs only in the last two decimals among the top states, when compared over the entire period). The real issue is the quality of this growth. Agriculture sector, as is widely known, is the largest employer in India and in that sense, is the most "inclusive growth" possible. When measured over the last 10 years, the agriculture growth rate of Gujarat is higher than every other state in the country!

Rural Poverty Line: The drop in share of population below poverty line in rural areas between 2004-05 and 2009-10 has been remarkable in Gujarat at 13% reduction (from 39% to 26%), which puts Gujarat among the top few states in this parameter. (Tendulkar methodology, compared between 2004-05 and 2009-10, Page 45 of 232, Planning Commission Report). This is a natural corollary of the earlier point about the quality of GDP growth, but remains largely an untold story so far.

Quality of Governance: The Gujarat growth story is more about providing effective governance, which the author has neatly sidestepped! At a time when corruption scandals emerge like mushroom in a rainy season across every major state – be it Adarsh in Maharashtra, or Jagan Reddy in Andhra Pradesh or CWG in Delhi, Gujarat has remained largely unscathed with no major corruption scandal emerging, which is no mean feat!

Basic infrastructure: The basic infrastructure viz. Power, Water supply and public transport are again integral part of the Gujarat story, which the author has not even touched upon! Gujarat is among the very few Power surplus states in the country today, despite having such high levels of industrialization. The water infrastructure in Gujarat has improved significantly in the last decade because of the number of initiatives taken by the government, with the involvement of local panchayats (Data reference not readily available, but anecdotal evidence confirms this. Read Ms. Meera Sanyal's blog on this after on-ground visits to Mehsana and Sabarkantha districts). Ahmedabad BRTS is a good public transport success story comparable to international standards, which finds no mention in the author's column.

The list can go on.

One must also not forget that Gujarat has achieved all this growth despite the state being the ONLY major state that has a prohibition on manufacture and sale of liquor, which is the largest source of revenue for all major states (the compensation in lieu of this loss from Central Government is a pittance).

There are more anecdotal stories and research papers that provide unbiased analytical opinion on Gujarat's development. It is NOT my assertion (or for that matter, most balanced analysts') that Gujarat has already reached pinnacle of development comparable to Scandinavian countries! But to deny the growth that the state has achieved in the last decade, through twisting statistics reeks of cheap stunt for electoral purposes!

Am sure this is not a stray column and more such hitjobs will be manufactured to counter Gujarat's development until the state elections! May be the intended audience is NOT the voters in the state who live the reality everyday but votes in the rest of India, to prevent the ascent of the CM to become PM someday!