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The Gujarat Model – An obituary and a warning

Whoever wins the Gujarat elections, its clear that as a political idea, the Gujarat development model is floundering, and may never be revived. It may have been a textbook case of what development should not be like, but given the powerful interests it serves, it’s still likely to haunt India’s policies for years to come.

Editor’s Note: So what sort of animal is – was? – the so-called Gujarat model of development? Over the years, several people, including some who have gotten their hands dirty opposing it on the ground, have made persuasive attempts in understanding – and exposing it – but, which often got drowned amidst the cynical mythmaking of the mainstream media. In the heat of the present political moment, these voices deserve to be heard again.


‘Gujarat Model Is Nothing But a Jugglery of Words,’ Says Former Gujarat CM
Ajoy Ashirwad Mahaprashasta, The Wire
Suresh Mehta, who quit the BJP in 2007, argues that successive governments in Gujarat have pushed the state towards becoming permanently trapped in debt. He says, “The Gujarat model is nothing but a jugglery of words. The hard realities of Gujarat suggest otherwise. In 2004, the CAG (comptroller and auditor general) examined Gujarat’s finances. At that time, the debt the state faced was somewhere in between Rs 4,000 and Rs 6,000 crore. Thus, it warned Gujarat to have some financial discipline to prevent the state from becoming a permanently debt-trapped state. But the government ignored the CAG’s observations. In 2017, Gujarat’s debts have increased to Rs 1,98,000 crore, according to the latest budget document presented by the state government. These are not my figures. These are the government’s own numbers.” (Related: Modi doled out huge concessions to Gujarat tycoons by “creating” mechanism for legalised corruption: Ex-BJP CM)

The Truth Behind the Gujarat Growth Model
Indira Hirway, The Wire
After the huge incentives to corporate units, the government is left with limited funds for education, health, environment and employment for the masses. Gujarat spends less than 2% of its income on education (the norm is 5-6%) with the result that 45% workers in Gujarat are illiterate or studied up to the fifth standard with the quality of education very poor. The quality of higher education is also resulting in the rising number of unemployed engineers and science graduates. Public expenditure on health is 0.8% of the state income, well below the norm of 4-6%. Gujarat is decelerating very fast in almost all health indicators. Forty-five percent children in the state are undernourished and the decline of maternal mortality rate has decelerated, leading to the state’s poor ranking.

AUDIO: Gujarat model of development – A talk in Hindi by Sagar Rabari
CPR Land Rights Initiative
General Secretary of Khedut Samaj-Gujarat (KSG) Shri Sagar Rabari, critically evaluates the Gujarat Model of Development premised on the drafting and implementation of various state and central laws, including the Gujarat Special Investment Region Act, the Gujarat Irrigation Act and the Land Acquisition Act, 2013, and describes its implications on the rights of farmers and industry in Gujarat. (Related: Modi’s plans for industrial development run up against opposition from farmers)

Gujarat model of development: CAG report shows more hype than substance
Paranjoy Guha Thakurta, Rediff.com
A report of the Comptroller and Auditor General of India on various socio-economic indicators of Gujarat that was tabled in the state assembly on March 31 has highlighted what was common knowledge to many — which is that the much-talked-about Gujarat Model of Development under the stewardship of Narendra Modi is more hype than substance. With facts and figures, the CAG report has highlighted how Gujarat was far from a role model for states across India, and that the progress made in this province in western India in improving agriculture, education, healthcare and empowerment of women and children, was not exactly creditable.

The Gujarat Model of Development: What would it do to the Indian Economy?
Rohini Hensman
Narendra Modi’s famed model of economic growth will only exacerbate the disasters wrought by the neoliberal economics of UPA. Far from championing him, industries and the middle class should take note of how his policies will eventually harm their own economic interests in the long run. (Related: ‘Gujarat Model’ or ‘Gujarat Muddle’, Asks Economist Jean Dreze)

RBI Report: The gleam of Gujarat’s high growth numbers hides dark reality of poverty, inequality
Maitreesh Ghatak, Scroll.in
The validity of the more sceptical take on the Gujarat model of development can be established by a look at the latest Handbook of Statistics on Indian States by the Reserve Bank of India, which puts together a lot of numbers in one place, will give weight to the scepticism over the Gujarat model of development. If we compare states on the Human Development index, Gujarat ranks 10th. What is much more striking and much less highlighted is that this picture has roughly stayed the same since the early ’90s, with one important exception: with regard to poverty, there has actually been a steep decline in Gujarat’s rank.

The Gujarat Model of Land Grab
Nidheesh J. Villat, Tehelka
A critical scrutiny of the Modi regime’s treatment of rural India and its fiscal policies ever since it took power at the Centre clearly hints that the government is keen to redistribute wealth upwards — i.e., from the working class and peasants to big business, a classic case of “class robbery”. No wonder no one expects Modi to dilute his idea of ‘land reforms’ — epitomised in “land from the tiller” and “land to the corporates” — which entails snatching most of the small holdings and commons and turning them in for real-estate speculation.(Related: Gujarat’s BJP Govt. Snatches Farmers’ Land To Give To Corporates) 

After 20 years of majoritarianism, count winners and losers and you see very few have gained. A look at the Gujarat Model.
M. Rajshekhar, Scroll.in
The proximate answer to poor health indices is underfunding. A senior official in Chief Minister Vijay Rupani’s office, who spoke on the condition of anonymity, said, “Why are our per capita spends on health and education low? Because the state believes it should work on roads and create conditions for enterprise, that people will take care of schooling and health.” This is majoritarianism at play. In Gujarat, upper and middle caste Hindus are more affluent than minorities such as Muslims and Adivasis. Indeed, communities such as the Patidars have their own medical colleges and hospitals, which, said a sociologist based in Ahmedabad who did not want to be identified, can handle even complex procedures like knee replacement. Dalits, Muslims and Adivasis have been left out in the cold.

Why So Many Economists Are Disillusioned With the ‘Gujarat Model’
Maitreesh Ghatak and Sanchari Roy, The Wire
The first and the most basic aspect is the fact that while Gujarat’s per capita income is one of the highest among Indian states, and its growth rate has also been quite high, its social indicators are poor. The second and the less simple aspect revolves around whether Narendra Modi had a decisive impact on Gujarat’s economic trajectory, with his pro-business model of governance, or merely benefited from the strong tailwind that was already propelling the Gujarat economy forward following the country-wide economic reforms in the early 1990s. The third aspect of the Gujarat model relates to a vital question: whether in the long run a development model like that of Gujarat can deliver on poverty alleviation and improvement in social indicators. (Jayati Ghosh writes: Gujarat Model’s Failure Explains Why the Economy Is a Significant Factor in the Coming Elections)

The Gujarat Model – Some Facts
Ravi Nair, MoneyLife
As per the latest reports, in all the eight editions put together, the Gujarat government has declared that it has signed 51,378 memorandums of understanding (MOU) since the first summit in 2003, worth a whopping Rs84 lakh crore. The government in initial years used to publish the data, but of late no such efforts are made and mere statements are given. It will be apt to remember, the GDP of India currently stands at nearly Rs170 lakh crore. The government claims, 57% of these signed MOUs are either implemented or under implementation. We have no option but to believe this claim as no concrete data is available in any of the Gujarat government websites including www.vibrantgujarat.com. But they forgot to remove the data from one place, the website of the Commissionerate of Industries, government of Gujarat.

What ‘Gujarat Model’?—Growth without Development—and with Socio-Political Polarisation
Christophe Jaffrelot, South Asia
The collaboration between the state and the corporate sector—an old tradition in Gujarat—gained momentum under Modi, businessmen benefitting from low wages, acquiring land more quickly and at a better price, and obtaining more tax breaks, etc. Simultaneously, Gujarat spent less than most of the other states of India on education and health. Even though the ‘Gujarat model’ cultivates social polarisation, Narendra Modi was able to win elections three times in the state for two major reasons. First, the main casualties of this political economy have been Muslims, Dalits and Adivasis, who do not represent more than 30 percent of society. Second, the beneficiaries of this ‘model’ were not only the middle class, but also a ‘neo-middle class’ made up of those who have begun to be part of the urban economy or who hope to benefit from it—the ‘neo-middle class’ is primarily aspirational. These groups were numerous enough to allow Modi’s BJP to win successive elections in Gujarat.

Book review: Gujarat and The Illusion of Development
Shipra Nigam
Unsurprisingly there is little that is new in Gujarat’s developmental model. Its market led growth operates within the new-liberal paradigm that has for some decades been touted by the IMF, World Bank and inc as the panacea for all ills in developing countries. It is a frame that has been widely contested, critiqued and discredited for its abysmal failure in bringing in sustainable, equitable and participatory growth within the developing world. In fact, the paradigm has been held responsible for inducing and aggravating the enormous difficulties faced by many of the developing countries. As the analysis in the book confirms, the ‘Gujarat Development Model’ is nothing more than a fervent adaptation and implementation of this chosen path favoured by the Indian state itself since the mid-1980s.

The Defective Tea Kettle and the Dead Sabarmati
Sandeep Pandey, The Wire
In 2014, Modi also made an election promise to Varanasi that he would clean the river Ganga the way he ’cleaned’ the Sabarmati in Ahmedabad. Three and a half years have passed, but little has been done to check sewerage from flowing into the river. Upstream of Ahmedabad, the Sabarmati is dry with not a single drop of water present. It is only during the monsoon that some pools are visible. An unplanned diversion of water from the Narmada canal makes the 10-11 km of the Sabarmati passing through Ahmedabad city look resplendent. But downstream, the water is black as all the city’s industrial effluents, with or without going through a treatment plant, empties into it. The Sabarmati is crying out for help but there are no plans to revive or clean it.

On ‘Gujarat Model’ of Development
Surajit Das, Vikalp
Even if, the corporates make more profit, the unemployed gets job – may be, at a lower wage – but still gets a job. Even if, the government spends proportionately more on corporate subsidies and on other facilities to corporates and less on human development, the human development indicators are expected to improve because of relatively higher rate of employment. Therefore, the benefit is claimed to be more than the opportunity cost in this so-called ‘Gujarat model’. For logical consistency, then, Gujarat being the number one among the Indian states in attracting big industries, should have been number one vis-à-vis human development indicators, too. But, it seems that the State of Gujarat is at most an average state with respect to the human development indicators. (Related: The reality behind the Gujarat Model of Development)

The shrinking, the rage
Ghanshyam Shah, The Indian Express
Though advances in irrigation have meant that agricultural growth in Gujarat over the last decade has been high at around 8 per cent per annum, this growth has not been inclusive. Small and marginal farmers have been left behind, and the head of every third Patidar household is a small and marginal farmer, and/ or a landless labourer. He grapples with the constant tension of high aspirations and wretched living conditions. Poor farmers don’t have enough resources to invest in farming and incur debt.

Modi government is trying to emulating Modi’s projects in Gujarat at a national level. But is this formula fool-proof?
RK Misra
Often, past records are indicative of powered future performances. Modi government’s Union Budget announced a plan for six crore dwellings countrywide with an outlay of Rs 22,407 crore. What did he do in Gujarat? Just before the 2012 Assembly elections, CM Modi announced 50 lakh houses in five years. The Anandiben Patel government recently slashed it to 24 lakh houses. There are quiet indications that it will be slashed further to 10 lakh houses or a fifth of Modi’s target. Even to build that in the remaining almost 36 months, one will need to build 1000 houses per day. Pretty little chance! As somebody said “If anyone questions why we died, tell them because our leaders lied”

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One Response “The Gujarat Model – An obituary and a warning”

  1. Prakash H.R.
    9th December 2017 at 7:29 am

    The set of articles analyzing the outcomes of Gujarat model of developments were enlightening and gave new perspective of Modi’s period of developments in Gujarat.
    It certainly is a pointer to the same tendency of results to come under his premiership at the National level.
    Quite alarming. The Citizen’s need to beware of the consequences and bringing in a higher level of opponent in the Parliament and assemblies under BJP rule to impose moderations in his policies.

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