Gujarat bubble fooled many, but people are waking up to reality of fake development model


In 2014 the nation got swayed by Narendra Modi’s charisma and his golden state, Gujarat. Gujarat’s development and progress was resonating in every BJP campaign. The 12 years of Modi government in Gujarat had put the state onto a path of industrial growth and prosperity.

By choosing BJP over other parties, people wanted to emulate the success of Gujarat for the nation. The Gujarat development model seemed perfect.

That it was. Perfect for propaganda and BJP’s electoral calculations. Viewed through rose-tinted glasses, the Gujarat bubble attracted millions to vote for Narendra Modi as Prime Minister in 2014.

As children, most of us can remember our fascination with bubbles. The delight we had in blowing them and joyfully chasing them as the wind carried the shiny spheres away. The Gujarat bubble too did the same, but to voters in deciding the country’s future. People blindly chased the hype created around the state.

As it was projected, the Gujarat development model should have, by all standards, put the state at the top of state rankings. But it did not.

At the outset, it is a flawed model, presented in the most lucrative manner to show both BJP and Narendra Modi in a positive, progressive light while degrading the work of its predecessors.

Far from being a role model, the state cuts a sorry figure in many developmental aspects.

Modi’s Gujarat – crumbling under tall claims

A Planning Commission report based on figures between 2005 and 2010, ranked 21 states on health, education and infrastructure. The model state of Gujarat, presented a gloomy state of affairs. The state ranked 16th in Health, 14th in Education and 11th in Infrastructure.

The rankings clearly indicate that during the period under study, the government of Gujarat failed to provide for its people in the above categories. On the health index, in terms of overall malnutrition and hunger (UNDP: Human Development Report 2011), Gujarat ranks worst among the industrial high per capita income states. The Annual Status of Education Report (ASER-Rural) 2012 stated that only 7% of Gujarat’s class 5 kids could read English sentences, way below all India average.

At a rally in Gorakhpur, Uttar Pradesh in January 2014, taking a dig at the Samajwadi Party patron Mulayam Singh Yadav, Narendra Modi had said, “Do you know what it takes to develop a state like Gujarat? It means providing electricity 365 days. It means ensuring electricity in every village and corner of the state.”

Surprisingly, at the time the claim was made, 90.4% household had electricity (Census 2011). Clearly, entire Gujarat was not electrified. In ranking of states, Gujarat was found to be at 14th position, with Himachal Pradesh, Sikkim, Punjab and others way ahead in providing electricity to their people.

Job creation was another claim made by the Modi government. The manufacturing and industrial sectors saw growth but other sectors, primarily agriculture failed to sustain livelihood opportunities.

The Modi government was ineffective in implementing multidimensional growth in the state.

Planning Commission’s report of the Working Group on Employment, Planning & Policy for the Twelfth five year plan (2012-2017) shows that the unorganised sector saw a huge dip in employment, from 394.9 million workers in 2004-05 to 378.97 million in 2009-10. Agricultural workforce also climbed down from 258.93 million to 243.2 million during the same period.

At the time of making the tall claims, the financial health of the “model” state was in grave crisis. According to the CAG report, Gujarat’s fiscal deficit increased from Rs. 15,513 crore in 2009-10 to Rs. 18,422 crore in 2013-14. The state debt increased from Rs. 45,301 crore in 2001-02 to Rs. 1,38,978 crore in 2012-13. Since the time Modi took over, the debt multiplied slightly more than three times in the last 11 years.

Borrowed money has to be paid back with interest. In 2013, the state government was paying interest of Rs. 34.50 crore every day, exhausting 17.5% of its expenditure in interest costs. Only one other state had more spending on interest payments; West Bengal at 21.4%. As the debt levels will balloon, so will the repayments putting a strain on the economy.

Another claim that Gujarat attracts the largest FDI inflows is also fallacious. In 2012-13, its share in FDI was a meagre 2.38%, compared to Maharashtra’s 39.4%. In the period 2000-2014, Maharashtra attracted maximum foreign inflows at $70.41 billion, about 30% of total foreign direct investment inflows in that period. Gujarat came at 5th place $ 10.18 billion.

The state’s agriculture books too don’t match upto the flawless image that has been created. Gujarat’s agricultural growth has fluctuated year to year and has not been 10-11% as claimed by the Modi sarkar. According to the 2015 Comptroller & Auditor General (CAG) of India report, Gujarat’s average annual agriculture growth rate during the 11th five-year plan (2007-12) was 5.49%. A notch better than the all India average of 4.06% but during 2012-13, Gujarat’s GDP in agriculture plunged below the line to -6.96%, a major setback from 21.64% in 2010-11 and 5.02% in 2011-12.

Land allocation to corporates for industries displaced lakhs of adivasis, farmers, fishermen and agricultural workers. Increased indebtedness among farmers has caused many suicides. The Narmada dam project benefitted more urban areas than rural areas where agricultural need was more. The dry Saurashtra region has greatly suffered due to Modi’s policy of focussing more on industrial growth concentrated around the cities than on agricultural lands.

The state exchequer groaned under the weight of Modi government’s business friendly attitude. In order to attract investors, Modi lowered interest rates, increased tax deductions and even sold land at throwaway prices. Many big companies like Adani, Reliance, Ford, Essar and others have been offered special conditions under the SEZ cover.

The Gujarat model of governance, is as misleading as in other aspects. The CAG report sites many incidents where Modi government gave huge benefits to corporate houses causing the state exchequer loss of several hundred crores.

Modi promoted Gujarat as a state with good governance. While the state machinery ran smoothly, many scams surfaced. Modi government is accused of selling 1,100 acres of land to set up the Nano plant, to Tata Motors at one-tenth the prevalent market rate.

Allotment of lakes for fishing activity without inviting tenders; selling of cheap land to Adani group for Mundra Port & Mundra Special Economic Zone (SEZ) at Rs 1 per square metre; purchase of cattle feed at double the market price; allotment of land meant for agricultural university for hotel construction; scam in Anganwadi centes; use of private aircraft as a favour and many more are plaguing the tenure of Modi as Gujarat’s CM.

Contrary to Modi’s claim of making Gujarat a vibrant state, the state has always been in good health owing to the entrepreneurial spirit of its people. Long before Modi became CM, the state’s economy flourished in the early 1990s, soon after the liberalisation of the Indian economy.

According to Planning Commission member Abhijit Sen, the average growth in agriculture till 1999-2000 was very high as compared to other states. Gujarat had annual economic growth rate of 19.5% during the six year period of 1988-94. In the 1991 to 1998 period Gujarat was the fastest-growing of India’s 14 major states based on gross state product. In the 1990s, Gujarat’s growth rate was 4.8% as compared to the national average of 3.7%. In the 2000s, it was 6.9% as compared to the national average of 5.6%. The difference between the state’s growth rate and the national average increased marginally and not drastically as claimed by the Modi regime.

Price paid by the common people of Gujarat

While the rich are getting richer, thanks to the economic development and industrial growth in the state, the less privileged are paying the price. The social indicators are inversely proportional to the state’s economic performance.

Among the developed states, Gujarat has one of the highest poverty levels (23% state population under poverty in 2010). It ranks 14th among all states on the poverty scale (RBI, 2013). According to the National Sample Survey Organisation (NSSO), in 2011-12, Gujarat had among the lowest average daily wages for urban casual labour at Rs 144.52, when the national urban average was Rs. 170.10.

Modi’s vibrant state suffers from lack of potable water supplies and ranks 10th in the use of toilets. Gujarat also features amongst the lowest ranks on human development indices. Gujarat government’s spending on social sector is below that of many states. In 2011, Gujarat spent 15.9% of its budget on education. States like Kerala, Maharashtra, West Bengal, Chhattisgarh spent between 17-20.8% (RBI report, 2011). Various social sector schemes like State Child Protection Policy, Right to Education Act, failure in preventing chid marriages or implementing the Pre-Conception and Pre-Natal Diagnostic Techniques Act, have failed in achieving their targets.

People gather to fetch water from a huge well in the village of Natwarghad in the western Indian state of Gujarat. Image: Reuters

Despite all these shortcomings, Gujarat was showcased as an ideal state, where development was the key word. Playing the right chords, BJP’s poll strategy ahead of the Lok Sabha elections in 2014 targeted youth. Before Narendra Modi was named as the choice for the prime minister’s post, he addressed students at Delhi’s Shri Ram College of Commerce on 6 February 2013.

The propaganda was cleverly designed to attract 150 million first-time voters. The great orator that Modi is, succeeded in selling his fallacious claims about the model state. The youth lapped up his passionate rhetoric about good governance, accelerated economic growth and much more. The speech soon spread like fire and there has been no looking back since then, both for BJP and Modi. The empire was built on clever image building and beguiling the trust of people.

Need for building “Vibrant Gujarat”

Post Godhra riots in 2002, Modi got the image of a contentious anti-minority leader. With this background, Modi launched the Vibrant Gujarat campaign in 2003. The biennial event aimed at attracting cash flows to the state, projecting it as India’s top investment destination. Soon Modi came to be referred as builder of modern Gujarat. He lowered government controls over business, eased up labour laws and regulations and fast forwarded infrastructure development. The campaign saw huge success and those against Modi’s hard-line Hindutva image, softened in their approach.

With each passing year, the Global Investor Summit became more successful, so did the collaboration between the corporate sector and the state government. Narendra Modi’s image got a thrust and he was able to win state elections thrice.

Known for creating religious polarisation, this time the BJP succeeded in creating social polarisation too. The ‘Gujarat model’, based on economic platform, clearly side-lined the minorities – Muslims, Dalits and Adivasis.

The Vibrant Gujarat campaign picked up monumental momentum prior to the 2014 general elections. Gujarat’s image was a key part of Modi’s election campaign and Gujarat government spent crores of tax payer’s money on polishing the state’s image and transforming Narendra Modi from a regional champion to a national leader.

The campaign highlighted Gujarat’s economic development and its vast natural resources.
Business leaders from industry sing Modi’s praise and it is not difficult to see why.

In 2008, Modi provided Tata Motors land for Nano plant and other incentives after the company’s long tussle with the West Bengal CM Mamta Banerjee. Overnight, Modi became a champion of industry and businessmen. Adding to his local popularity was the support of the Gujarati diaspora, who saw their economic aspirations being fulfilled in their homeland.

The Gujarat bubble succeeded in fooling many. But as the people are waking up to reality, the Gujarat Model is losing its sheen. With the bubble burst and state elections round the corner, one waits for another gimmick from Modi’s bag of tricks.

(Sadhavi Khosla is author of Punjab: The Enemy Within. Views expressed here are the author’s own and Janta Ka Reporter does not endorse them)