GUJARATí GROWTH
MYTH & REALITY-1

Holes in Development Claims

Over the last ten years, Gujaratís Narendra Modi government has been thumping its chest, making loud claims about the stateís spectacular development under him, even hinting that it is the most developed state in India.

To sustain this claim the Modi government has launched a massive propaganda campaign over the years, spending hundreds of crores of public money on newspaper, magazine and other advertisements, as well as large international melas, at the end of which promises of massive foreign investment have been made. Only a small percentage of such promises have been fulfilled.

According to the per capita net state domestic product (PCNSDP), a measure of economic prosperity, Gujarat is not the number one state, but figures at the sixth position behind Haryana, Maharashtra, Punjab, Kerala and Himachal Pradesh.

As per as Gujaratís general development is concerned, it has been at the sixth or seventh position for most of the last four decades. Only in mid-1996, it figured at the fourth position, but Mr Modi was not the Chief Minister then. As a whole, Gujaratís position among the developed states is not new, Modi or not Modi.

According to the three-yearly surveys, the latest figures being available for 2008, in terms of current prices, Gujarat had per capita income of Rs. 45,773. Haryana had Rs. 59,008 as the topper, followed by Punjab, Maharashtra and Kerala. The situation is not different today.

To conceal the real picture (which is that, in the company of Indian states, Gujarat stands today at the same position where it has stood over the last 40 years), the Modi government has resorted to gimmicks like making the high-profile actor Amitabh Bachchan Gujaratís brand ambassador and forcing laudatory statements out of such industrialists as Tatas, Ambanis and others, who have stakes in the state and cannot afford to annoy Modi.

Even though the state has held the same position among other states of India over the last four decades, the situation of the middle classes and the poor has aggravated during the last ten years (during Modi rule). In terms of human development this state has fared worse than poorer states.

Being at the sixth position in terms of income, in Human Development Index (HDI) it stands at the 9th position, even behind West Bengal, Uttar Pradesh and Andhra Pradesh. The reason is quite clear: Gujaratís development perspective does not include a consideration for the lower middle class and the poor.

By the way, HDI, which is a better and more reliable way of inclusive development, takes into account improvements in life expectancy at birth, sex ratio, mean years of schooling available to the population, 7+ literacy rate and per capita net state domestic product.

The statements made above are based on data from the Reserve Bank of India online database (http:/www.rbi.org.in), Government of India (2009) and Shariff. A (2009).

In this first paper on the issue, we would like to touch upon the highly publicised (and false) claims, about the flood of foreign direct investment (FDI) into Gujarat, all supposedly because of Modiís supposed credibility among foreign investors. If we go by these claims, Gujarat has netted in the largest amount in FDI. The fact is entirely different, contrary to propaganda and false publicity.

The region/state-specific FDI data provided by the Department of Industrial Policy and Development suggest that the size of cumulative FDI inflow (January 2000-March 2010) has been highest in Maharashtra (Rs. 1.75 lakh crore), followed by Delhi (1.02 crore). Karnataka received Rs. 31,000 crore and Gujarat only Rs. 28,000 crore. This exposes Modiís false claims.

We hope to provide the true picture in our series of papers that would follow.

(The above report is primarily based on the research of Institute of Objective Studies [New Delhi], US-India Policy Institute [Washington DC] and Centre for Research and Debates in Development Policy [New Delhi]).
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