- Apr 5, 2014
Decoding Gujarat - I
The Statesman, 04 Apr 2014
For almost the past six months, Mr Modi has remained mostly out of Gujarat for electioneering. The state government is almost at a standstill. No major policy decisions are being taken
Gujarat is known as the land of Mahatma Gandhi and Sardar Vallabhbhai Patel for their contributions to India and the world. Its economic development is also marked by a penchant for entrepreneurship. Not only is the state’s infrastructure development enviable; its financial, social and cultural progress too has been laudable for many decades. The credit goes to Gandhi and Sardar. Therefore, at present it is necessary to check how far the claims made by the present Chief Minister of Gujarat, Narendra Modi, stand true. He claims the credit for the development of Gujarat as a whole. He tries to be a smart sales and marketing person with skills of mesmerizing and hypnotizing the masses by using undesirable language to tarnish the image of Opposition leaders. Second, he has succeeded in receiving extraordinary financial support from leading corporate houses not only of Gujarat but from different parts of the country and the world as well.
Thousands of acres of agricultural land, Gochar lands, waste lands and fallow lands have been offered at throwaway prices to giant corporate houses that have opened their treasuries to support Mr Modi’s candidature for PM. Thus he has been instrumental in the corporate loot of Gujarat.
Deteriorating governance in the fields of education, health and agriculture is a proven fact. For almost the past six months, Mr Modi has remained mostly out of Gujarat for electioneering. The state government is almost at a standstill. No major policy decisions are being taken. The pathetic state of affairs in various areas during his 13-year rule is really a matter of concern.
The Annual Average Growth Rate (AAGR) of GDP i.e. State Domestic Product (SDP) in Gujarat was 4.34 per cent during 1960-80, whereas India’s AAGR was 3.3 per cent. Thus, the difference between Gujarat’s growth rate and that of India’s was 1.04 percentage points. The state’s AAGR was 14.97 per cent during 1980-1990 and it was the highest growth rate experienced by the state.
During 1990-2000, it was 12.77 per cent, the second highest. During these two decades, the AAGR for India stood at 5.5 per cent. Thus, the state of Gujarat was far ahead of the whole country. During Mr Modi’s period, specifically between 2001 and 2011, the AAGR plummeted to just 9.82 per cent, when India’s AAGR was 7.5 per cent. Thus the difference between the two works out to just 2.32 percentage points. During 2006-12, the AAGR in Gujarat was 9.32 per cent, whereas it was 8.06 per cent for the whole of India, the highest since 1950. Therefore, the difference is just 1.26 percentage points. Thus, so far as the state’s economic growth is concerned, Mr Modi drew Gujarat back to the 1960s and 1970s! And, of course, India’s high growth rate does not depend on Gujarat’s.
The highest AAGR was experienced by Gujarat during 1990-94 and that was 16.73 per cent. The highest annual growth rate was 40.18 per cent during 1988-89, when Amarsinh Chaudhari was the Chief Minister. The second highest annual growth rate was witnessed during 1992-93 during the Chief Ministership of Chimanbhai Patel, and it was 34.33 per cent.
It was 30.06 per cent in 1983-84 when Madhavsinh Solanki was Chief Minister. During Modi’s period, the highest growth rate was achieved during 2003-04 and it was just 14.77 per cent. These facts actually suggest that Gujarat has not developed during Mr Modi’s rule.
Since the advent of the industrial revolution, transformation in the economy is perceived as the transformation of the agrarian economy to the industrialized economy. According to this parameter, Modi’s period is not the period of transformation of Gujarat’s economy. In 1999-2000, industry’s contribution to GDP was 39.21 per cent and that of agriculture it was 14.52 per cent. In 2008-09, agriculture’s contribution went down to 14.10 per cent and that of industry went up to 41.05 per cent. Thus, only 0.42 per cent transformational change occurred during Mr Modi’s rule.
In fact, industrialization of Gujarat was almost completed well before he took over as Chief Minister. During almost two decades spanning the period 1980-98, the contribution of agriculture to SDP went down from 34 per cent to 19.42 per cent and industry’s contribution went up from 28 per cent to 41.91 per cent. The figure of agriculture’s contribution to State GDP for 2011-12 is 18.3 per cent. Hence, from a historical perspective, in terms of industrial growth the period of 1980-98 was much more important than the period of Modi’s rule.
During the 2003, 2005, 2009 and 2011 Vibrant Gujarat summits, promises were made for huge amounts of industrial investment. The success ratio is pathetic. In 2011, the summit ended with the promise of around Rs 20.40 lakh crore investment but at the end of the two-year period the success ratio is just 1.46 per cent, i.e. just Rs 29.81 thousand crore. The success ratio of these summits went down consistently, as evident from the table.
Interestingly, the total investment in the whole of India during 2009-12 was Rs 19,83,189 crore. How can it be Rs 20.40 lakh crores only for Gujarat in just one year? In the face of criticism, the Modi government did not sign any MoU with any investor during the 2013 summit held at Mahatma Mandir, Gandhinagar. During the 17-year period of 1991-2008, the total industrial investment made in the state was Rs 5.05 lakh crore. Therefore, it cannot be Rs 20.83 lakh crore in just one year ~ 2011. It is very difficult to assess the actual industrial investment made as a result of Vibrant Gujarat summits because the state government furnishes contrasting figures. In 2005, promises of investment worth Rs 106,160 crore were made. Initially the claim of Rs 74,019 crore was made by the state government. In reply to an RTI query, it said that investment of only Rs 24,998 crore was actually realized. The figure in that year’s Socio-Economic Survey is slightly higher than that.
Interestingly during the 2011 summit, even the State Bank of India, Dena Bank and Bank of Baroda signed MoUs worth Rs 18,000 crore for the implementation of various schemes of the Government of India. Most of them are bankable schemes for which there is no need of any kind of MoU. And of course, it is not an investment at all.
The FDI made in Gujarat in 2011-12 was Rs 4,730 crore. It went down to Rs 2,676 crore in 2012-13, representing a 43 per cent decline. Gujarat ranks sixth in terms of FDI after Maharashtra, Delhi, Tamil Nadu, Karnataka and Andhra Pradesh. Maharashtra’s contribution to the country’s total FDI was 39 per cent in 2012-13 and it was just 2 per cent in the case of Gujarat.
According to the Planning Commission’s National Human Development Report of 2001, Gujarat ranked 10th among all states. Its rank is 11th, according to the India Human Development Report of 2011. Nowhere does Gujarat stand first in the indices of human development. Its rank is 26th in the category of undernourished women and children.
In 1999, there were 26.19 lakh BPL families. At present the number stands at 40 lakh according to the government advertisement on Mukhyamantri Amritam (MA) Yojana aired on almost all FM channels in Gujarat during last December and January.
According to the BJP manifesto for the assembly elections in December 2012, 50 lakh families were to be provided affordable and decent housing. This would mean that 2.5 crore people (43 per cent) live in poverty because good housing is one of the indicators for the measurement of poverty. According to the UNDP criteria of Multi-dimensional Poverty Index (MPI-2010), Gujarat has 41.5 per cent people in poverty. Gujarat ranks 8th in terms of poverty among 20 Indian states according to the research study made by Oxford Human Development Initiative in 2011.
The writer is Head, Department of Economics, HK Arts College, Gujarat
Decoding Gujarat – II
The Statesman, 05 Apr 2014
The popular perception is that roads in Gujarat are far better than in most other states. This is once again a myth. A PIL was filed in the High Court of Gujarat in 2013 to direct the state government to construct good roads. While hearing the petition, the judge said that 90 per cent of the roads are in bad shape ~ HEMANTKUMAR SHAH
There are around 16 lakh educated unemployed youth in Gujarat according to the state government’s publication ~ Socio-Economic Review, 2012-13. Recently, 8.8 lakh applications were filed with the government for the post of talatis i.e. secretary of the village panchayat. The figures point to rampant unemployment. The promise to generate jobs for 1.02 crore people was made during the first five Vibrant Gujarat summits. But till March 2012, only 2.99 lakh jobs were generated from the investment made till that time. Another 2.70 lakh jobs were to be generated from the rest of the investment. Thus, a total of only 5.69 lakh jobs were generated from the industrial investment that was promised during these summits.
There has been a 7.75-time increase in VAT revenue, a 2.5-time increase in electricity duty and a 6.5-time increase in overall tax revenue of the state government. And yet the debt burden of the government has gone up from Rs 26,000 crore to Rs 1,46,000 crore. The net per capita debt burden is Rs 26,000, the highest in India. And the reason is complete mismanagement of the state government’s finances.
There are 47,000 vacancies of teachers in primary and secondary schools and around 5,000 vacancies in colleges and universities. Universities are being run without regular appointments of Vice-Chancellors for months together. All the 30 universities, opened in Gujarat over the past 12 years, are in the private sector or are being run on a self-finance basis. Many universities run on only paper or with just 100 or 200 students, e.g. Children’s University and Indian Institute of Teachers’ Education at Gandhinagar. The dropout ratio after 5th standard is 29.5 per cent and before 10th standard it is 43 per cent.
Forty-three per cent of children in the below-5 category are undernourished. Gujarat has 47 per cent undernourished women. And still the state has a wide gap of anganwadis. It requires 72,000 anganwadis, but makes do with 54,000. The state does not have enough primary health centres and community health centres.
The Sixth Pay Commission Report has not been fully implemented. The arrears were paid in instalments. Professors of colleges and universities are yet to get their arrears. More than 4.5 lakh employees are appointed on a contractual basis. The state government went to the Supreme Court against the judgment of the High Court which directed regular appointment to these employees. The police was allowed to form a trade union, in complete violation of constitutional provisions.
As many as 36 IAS and IPS officers are in jail for fake encounters and other criminal offences. There is no transparency in the functioning of the government. Thousands of applications under the RTI Act are pending with the State Information Commission. There is no accountability. Assembly sessions are increasingly infrequent. The report of the Second State Finance Commission was tabled in the House five years after it was submitted. The government doesn’t seek participation of stakeholders. Even the draft of the Common University Act was not put in the public domain for discussion among teachers, students and Vice-Chancellors.
Around 6000 children have been reported missing over the past five years. In many cases, those who kill children are not arrested; as often as not, the accused are protected by their political mentors in Gandhinagar. More than 11,000 cases of atrocities against women have been registered in the last five years, let alone the unregistered crimes. More than 5,500 farmers have committed suicide and the police has been instructed not to register the cases as suicide. Ahmedabad and Surat have the dubious distinction of having recorded the country’s highest crime rate.
The electricity duty for domestic consumption in 2014 is 15 per cent; it is 11.25 per cent for student hostels... and just 10 per cent for industries. More than 4.5 lakh applications from farmers for power connections are pending with the government and the state boasts that it is selling electricity to other states. A sum of Rs 1,020 crore was spent on purchasing power from private companies, whereas according to the state’s 11th plan it should have been spent on generation of electricity.
During 1990-2000, the production of electricity by the state-owned company went up by 34.82 per cent. But during 2000-11 it went up only by 19.74 per cent. During 1990-2000, the generation of electricity went up by 483.82 per cent in the private sector; it has come down to 141.93 per cent during 2000-11. In a word, Narendra Modi has failed to boost electricity generation.
According to the CAG report of 2013, Gujarat Energy Transmission Corporation Limited (GETCO), the state-owned company, has not achieved its target for the erection of extra high tension substations and transmission lines. During 2007-13, there was a delay of six to fifty months in commissioning the substations. This is not an example of good governance.
Gujarat Urja Vikas Nigam Limited (GUVNL), a government owned company, has signed a power purchase agreement (PPA) with Adani Power Limited (APL). It states that if the provisions of the agreement are not observed by APL, the GUVNL can impose a fine. During 2009-12, APL supplied less power than the stipulated quantity. The fine of Rs 240 crore should have been collected from APL, but the amount collected was Rs 160 crore less. Is there a scam somewhere?
The popular perception is that roads in Gujarat are far better than in most other states. This is once again a myth. National Highways, State Highways and district roads were good even 50 years ago and they are good even today. But the roads in 18,500 villages, 13,700 village panchayats, 159 municipalities and eight municipal corporations are riddled with potholes. A PIL was filed in the High Court of Gujarat in 2013 to direct the state government to construct good roads. While hearing the petition, the judge said that 90 per cent of the roads are in bad shape. Every year crores are being spent on resurfacing roads in big cities. This benefits contractors and their political mentors.