 "Firing on all cylinders")
The development model that has evolved in Gujarat in the last decade is now being seen as a model to be studied and emulated. In the words of Gujarat Chief Minister Narendra Modi, inclusive and comprehensive development is the state government's guiding principle. "In the last ten years, we have particularly encouraged the harnessing of new technologies and systems in government to ensure that the benefits of this growth are translated into improved quality of life of the people," Modi told the Planning Commission early in 2013.
Not only is Gujarat a state that is one of the most sought-after by industrialists and corporates, but agriculturists also now enjoy the fruits of better irrigation and pricing. The state recorded an impressive average annual growth rate of 10.13 per cent between 2005-06 and 2011-12. Between 2005-06 and 2012-13, the average growth rate in agriculture, industry, manufacturing and services was 7.22 per cent, 10.64 per cent, 10.89 per cent and 10.86 per cent, respectively.
Be it dairy, automobiles, pharmaceuticals or chemicals, Gujarat is emerging as a hub of several such sectors within the country. Large, medium and small companies alike have been drawn to the state, which is now home to Tata Motors, Ford India, Maruti Suzuki, TCS, Bosch, Colgate, Nestle, Teva and Abbott, among other well-known companies.
Both manufacturing and agriculture have flourished in the past decade, owing to the introduction of modern technology and concerted efforts by the state government.
The state's per capita income at current prices was estimated at Rs 89,668 in 2011-12, as against Rs 78,802 in 2010-11 - an increase of 13.8 per cent. Figures made available by the Gujarat government through the Planning Commission show that in 2011-12 Gujarat was ranked 11th among India's states in monthly per capita income in rural areas at Rs 932, and ninth in urban areas at Rs 1,152.
Experts too agree that Gujarat has done exceptionally well in terms of maintaining almost similar growth in all three sectors. Y K Alagh, former Union minister of power, planning, and science and technology, is of the view that while services and manufacturing have kept the state on the top in the last 30 years, the last decade has also seen a considerable rise in agricultural growth too.
"As far as GSDP and manufacturing are concerned, Gujarat has been on the top since the last 30 years because it was the only state doing well. However, in the last decade the number of states doing better have increased and so we are in the top four or five. Gujarat has done better in the last decade in agriculture, largely because of Sardar Sarovar, which has led to an average six per cent growth rate. And agriculture will start diversifying again when the distribution system is ready and controlled water supply is ensured, because non-grain crops need controlled water supply. We have also become a major paddy and wheat growing state. Manufacturing and services have also done reasonable well," Alagh points out.
Gujarat has come under attack for its high debt. However, its public debt was 38.78 per cent of GSDP in 2001-02. In the past decade, Gujarat has managed to bring down the ratio of public debt to GSDP by 14 per cent. Experts believe high debt is being used to create infrastructure. Gujarat has a revenue surplus, so the debt is not being used to finance a revenue shortfall, but is being used for capital and social spending. Moreover, the state's ratio of aggregate capital disbursement to capital outlay was over 80 per cent, according to FY14 budget estimates, much higher than the 68-70 per cent average for all of India's states put together.
Much has been said about whether this growth has translated into better social and demographic indicators. While experts laud Gujarat's economic growth, most of them are also critical about the state meeting expectations on the social front.
For instance, Indira Hirway, director and professor of economics at the Centre for Development Alternatives, Ahmedabad, points out that growth has been unequal across the state. She believes that though the state's economic growth has been impressive, it has not translated into what can be called inclusive growth. "Gujarat's development model can by no means be termed inclusive, as it has not resulted in better social indicators," she says.
"One of the important parameters of inclusive growth is provision of better productive employment with good wages and social security. Though employment in Gujarat is good, compared to other states, the quality of employment is poor, with low wages and lack of job security," Hirway argues.
In terms of number and percentage of population below the poverty line by states (in 2011-12), when computed in line with the Tendulkar method on Mixed Reference Period (MRP), Gujarat ranks a distant 19th, far behind several other states.
On the positive side, Gujarat ranks seventh in terms of average GSDP growth at constant prices between 2005-06 and 2011-12. But can this be termed 'inclusive', which experts roughly define as good growth resulting in higher social development, be it in terms of literacy rate, sex ratio, infant mortality rate, maternal mortality rate or enrollment in education?
Among other indicators, Planning Commission statistics state that female literacy rate in Gujarat in 2011 for girls of seven years age and above was 79.31, putting the state in fourth position after Kerala, Maharashtra and Tamil Nadu. However, other indicators like the sex ratio at 918 (2011), infant mortality rate at 41 (2011) and the maternal mortality rate at 148 (2007-09) have been poorer compared to other states like Kerala, Tamil Nadu and West Bengal.
Hirway claims that even the spending on health and education is lower in terms of per capita expenditure when it comes to the social sector. "We have analysed per capita social sector spending in 20 major states, and Gujarat ranked around 16th or 17th. Gujarat's model of development is more focused on growth rather than development. It can be said that the state has compromised on (social) development. Improvement in infrastructure and rate of economic growth has not been commensurate with social development," she adds.
Yet, when it comes to education, the state has been successful, especially in the area of literacy enrollment plans for girls. Renu Seth, programme manager, Pratham, a nation-wide not-for-profit organisation that brings out the Annual Status of Education Report (ASER), lauds the state for this.
"The state's education system has seen access and enrollment steadily growing over the years. From Kutch to Dangs, rarely does one see students who don't have access. The state government's Pravesh Utsav also sees a number of state government departments converging to ensure enrollment, especially of girls, and it has been successful. There are some right policies in education in the government," commends Seth.
Not only is Gujarat a state that is one of the most sought-after by industrialists and corporates, but agriculturists also now enjoy the fruits of better irrigation and pricing. The state recorded an impressive average annual growth rate of 10.13 per cent between 2005-06 and 2011-12. Between 2005-06 and 2012-13, the average growth rate in agriculture, industry, manufacturing and services was 7.22 per cent, 10.64 per cent, 10.89 per cent and 10.86 per cent, respectively.
Be it dairy, automobiles, pharmaceuticals or chemicals, Gujarat is emerging as a hub of several such sectors within the country. Large, medium and small companies alike have been drawn to the state, which is now home to Tata Motors, Ford India, Maruti Suzuki, TCS, Bosch, Colgate, Nestle, Teva and Abbott, among other well-known companies.
Both manufacturing and agriculture have flourished in the past decade, owing to the introduction of modern technology and concerted efforts by the state government.
The state's per capita income at current prices was estimated at Rs 89,668 in 2011-12, as against Rs 78,802 in 2010-11 - an increase of 13.8 per cent. Figures made available by the Gujarat government through the Planning Commission show that in 2011-12 Gujarat was ranked 11th among India's states in monthly per capita income in rural areas at Rs 932, and ninth in urban areas at Rs 1,152.
Experts too agree that Gujarat has done exceptionally well in terms of maintaining almost similar growth in all three sectors. Y K Alagh, former Union minister of power, planning, and science and technology, is of the view that while services and manufacturing have kept the state on the top in the last 30 years, the last decade has also seen a considerable rise in agricultural growth too.
"As far as GSDP and manufacturing are concerned, Gujarat has been on the top since the last 30 years because it was the only state doing well. However, in the last decade the number of states doing better have increased and so we are in the top four or five. Gujarat has done better in the last decade in agriculture, largely because of Sardar Sarovar, which has led to an average six per cent growth rate. And agriculture will start diversifying again when the distribution system is ready and controlled water supply is ensured, because non-grain crops need controlled water supply. We have also become a major paddy and wheat growing state. Manufacturing and services have also done reasonable well," Alagh points out.
Gujarat has come under attack for its high debt. However, its public debt was 38.78 per cent of GSDP in 2001-02. In the past decade, Gujarat has managed to bring down the ratio of public debt to GSDP by 14 per cent. Experts believe high debt is being used to create infrastructure. Gujarat has a revenue surplus, so the debt is not being used to finance a revenue shortfall, but is being used for capital and social spending. Moreover, the state's ratio of aggregate capital disbursement to capital outlay was over 80 per cent, according to FY14 budget estimates, much higher than the 68-70 per cent average for all of India's states put together.
Much has been said about whether this growth has translated into better social and demographic indicators. While experts laud Gujarat's economic growth, most of them are also critical about the state meeting expectations on the social front.
For instance, Indira Hirway, director and professor of economics at the Centre for Development Alternatives, Ahmedabad, points out that growth has been unequal across the state. She believes that though the state's economic growth has been impressive, it has not translated into what can be called inclusive growth. "Gujarat's development model can by no means be termed inclusive, as it has not resulted in better social indicators," she says.
"One of the important parameters of inclusive growth is provision of better productive employment with good wages and social security. Though employment in Gujarat is good, compared to other states, the quality of employment is poor, with low wages and lack of job security," Hirway argues.
In terms of number and percentage of population below the poverty line by states (in 2011-12), when computed in line with the Tendulkar method on Mixed Reference Period (MRP), Gujarat ranks a distant 19th, far behind several other states.
On the positive side, Gujarat ranks seventh in terms of average GSDP growth at constant prices between 2005-06 and 2011-12. But can this be termed 'inclusive', which experts roughly define as good growth resulting in higher social development, be it in terms of literacy rate, sex ratio, infant mortality rate, maternal mortality rate or enrollment in education?
Among other indicators, Planning Commission statistics state that female literacy rate in Gujarat in 2011 for girls of seven years age and above was 79.31, putting the state in fourth position after Kerala, Maharashtra and Tamil Nadu. However, other indicators like the sex ratio at 918 (2011), infant mortality rate at 41 (2011) and the maternal mortality rate at 148 (2007-09) have been poorer compared to other states like Kerala, Tamil Nadu and West Bengal.
Hirway claims that even the spending on health and education is lower in terms of per capita expenditure when it comes to the social sector. "We have analysed per capita social sector spending in 20 major states, and Gujarat ranked around 16th or 17th. Gujarat's model of development is more focused on growth rather than development. It can be said that the state has compromised on (social) development. Improvement in infrastructure and rate of economic growth has not been commensurate with social development," she adds.
Yet, when it comes to education, the state has been successful, especially in the area of literacy enrollment plans for girls. Renu Seth, programme manager, Pratham, a nation-wide not-for-profit organisation that brings out the Annual Status of Education Report (ASER), lauds the state for this.
"The state's education system has seen access and enrollment steadily growing over the years. From Kutch to Dangs, rarely does one see students who don't have access. The state government's Pravesh Utsav also sees a number of state government departments converging to ensure enrollment, especially of girls, and it has been successful. There are some right policies in education in the government," commends Seth.