Gujarat’s inclusive growth

A consistent story that emerges about the Gujarat growth model is that Modi/Gujarat did deliver “extra” growth. A consistent story that emerges about the Gujarat growth model is that Modi/Gujarat did deliver “extra” growth.

From high farm growth to wages for the disadvantaged, even their employment levels, Gujarat comes out on top.

Both the opinion polls and the bookies suggest that Narendra Modi will be the next prime minister of India. There is a constant but healthy debate in the media about the likely pros and cons of a Modi administration. For each assertion made by the BJP, there is a counter presented. Some of this is quite transparently facile — for example, comparing item for item the UPA’s 10-year record with the NDA’s five-year record (1999-2004).

There are several reasons this comparison borders on the ridiculous — the most important being that the Indian voter has already voted for the “good” performance of UPA 1. This she did in 2009, when even the Congress was surprised by its victory. The proper comparison is obviously 2009-14 with the NDA, and when this comparison is made — well, that is what the voters are voting for or against; we will know their evaluation on May 16th.

Another important objection to Modi comes with the refrain that the dream, the vision, that Modi is selling is a nightmare for the poor, the minorities and the disadvantaged. The accusation is made that the Modi growth model is really for the rich and the super-rich, that is, the Adanis and Ambanis of India. As debates in India rarely centre on evidence, the allegations fly thick and fast. Agricultural growth in Gujarat, far from being high, was actually negative — or so proclaimed Arvind Kejriwal.

When sanity returns, the argument changes — growth has always been high in Gujarat because the Gujaratis are industrious and hard-working. The real problem, the critics contend, is that growth in Modi’s Gujarat has not been “inclusive”. Now inclusion, like beauty, is in the eyes of the beholder, particularly if the person pontificating is of the secular left-wing variety. Here it is automatically assumed that if one is secular, then one is guaranteed inclusion — saying so makes it so.

This debate is very important. If Modi is the next PM, we need to directly examine his contribution to both the successes and failures of the “Gujarat model”. Towards this end, I will present results pertaining to growth indicators (see below) and socio-economic indicators (next article). The method followed is straightforward. Modi became chief minister of Gujarat in 2001. How did Gujarat compare with other “similar” states in India? But how does one define similar?

One approach is, and the one adopted here, is to look at states that had a similar per capita income in 2001. Thus, data are presented for Gujarat, all India, and the average of seven other states that were close to (+/- 20 per cent) Gujarat’s 2001 per capita income …continued »