Gujarat has twice as much poverty as Kerala, and a four times higher rate of under-five mortality. Despite lower growth, Kerala has shown a faster rate of poverty reduction than Gujarat, which is behind on social indicators
What India needs to scale up is not a "Gujarat" or a "Kerala" model but one that combines the best of both. India needs the growth focus of Gujarat with its manufacturing competitiveness and the social advancement of Kerala with social indicators similar to the Nordic countries. This winning combination would give us the cutting edge in development.
Gujarat is the second-fastest growing Indian state after Uttarakhand for the period 2000-01 to 2010-11, with a growth in the state domestic product (SDP) per capita of 8.2 per cent per annum. With a population growth of just over 1.9 per cent per annum, Gujarat's overall growth is over 10 per cent per annum - putting it in the same league as China for rapid growth.
But Kerala did not do so badly with a growth rate of SDP per capita of 7 per cent per annum over the same period. In 2012-13 Kerala grew at a rate of 9.5 per cent per annum. However, Kerala's growth is built around remittances and tourism. Agricultural growth rate has in fact declined; not surprising, as remittances raise the reservation wage. Kerala has a considerable amount of in-migration, too, indicating that Keralites do not wish to do certain jobs. Unemployment rates remain high.
While Gujarat edges out Kerala on growth and employment, it does much worse on social indicators. Kerala is one of the only states in India with a female/male ratio greater than one. It's the only state in India with very low open defecation and its child and mother mortality rates are in the same league as advanced countries. On all education and health indicators and longevity Kerala scores the highest in the country. Surprisingly, Kerala scores low on women's political representation - which one would have expected would be much higher in a state with such high female literacy. Politics in Kerala remains a male bastion.
Gujarat has twice as much poverty as Kerala, and a four times higher rate of under-five mortality. Despite lower growth Kerala has shown a faster rate of poverty reduction than Gujarat. Its sex ratio at around 0.918 is much lower than the national average. Forty per cent of Gujarat's population practices open defecation compared to only four per cent in Kerala. Only 78 per cent of Gujarati girls are in school compared to 98 per cent in Kerala. Gujarat, for all its chest-beating on growth, remains quite behind on social indicators and slower on poverty eradication.
So we cannot aspire to a Gujarat model which boasts East Asian style growth rates but sub-Saharan Africa standard social indicators. We cannot also strive only for a Kerala model with Scandinavian social indicators but with no jobs and having to export its best human capital to generate income. The whole of India could not do that.
We should also pay attention to progress in two large reasonably well-functioning states: Tamil Nadu and Maharashtra, which have quite impressive growth of SDP per capita of 7.5 per cent for the period 2000-01 to 2010-11 and quite impressive social indicators, at least in an Indian context. They are not at Kerala levels but improving steadily. Andhra Pradesh has shown the fastest rate of poverty reduction - faster even than Kerala.
Uttarakhand too did very well on growth and poverty eradication, with the fastest rate of growth over the last decade and the second fastest rate of poverty eradication after Andhra Pradesh. But with the recent damage to lives, livelihoods and infrastructure it needs to pay more attention to climatic vulnerabilities to sustain its development. The worst performer is Uttar Pradesh, with the lowest growth rates of SDP per capita and the slowest rate of poverty eradication. It's still stuck at the 1960s "Hindu growth rate".
Bihar has increased its growth rate but remains a laggard in poverty eradication. It needs to sustain the growth over a longer period for it to make a bigger dent on poverty and it needs to ensure more inclusive development. Punjab, once the growth champion, has slowed down considerably and is now one of India's slowest growing states - but still does well on the rate of poverty eradication as wages have risen.
Haryana too had decelerated in growth though not as much as Punjab, and does reasonably well on poverty eradication - better than Gujarat.
So there is plenty to learn from what is happening in different parts of the country. It's not, as often portrayed, a choice between only a growth champion like Gujarat and a social champion like Kerala.
As India's overall growth has slowed down and, for now, its revival looks like an uphill battle, it will have an effect on poverty eradication. With slower growth poverty reduction will also be affected and with a weak fiscal position some hard choices will have to be made to keep the momentum on poverty reduction, as we try to revive growth. The different ways in which many states have managed to reduce poverty even with lower growth must also be examined. Growth matters a lot but growth alone also does not do it.
The decade from 2000-01 onwards will be remembered for a long time as India's golden age - when India coasted on a golden turnpike of growth and saw one of the fastest reductions in poverty worldwide. The latest NSS data shows that India will easily achieve the Millennium Development goal of halving poverty. India also successfully negotiated the global crisis. But the second decade looks more challenging, with growth slowing down rapidly and India now off the golden turnpike of growth to a more pot holed and uncertain future.
We need to strive for a combination of Gujarat and Kerala - a model which combines the best of both. We need to strive for both growth and better social indicators. If we did not waste so much money on un-targeted subsidy programmes and make-work schemes we might reach that sweet spot in the coming decade and lift India back to being the centre of global attention. For that we need to lower the cost of doing business, improve competitiveness and find ways to deliver public services more effectively.
The writer is Director General, Independent Evaluation at the Government of India and former UN Assistant Secretary General
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
