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India: The Gujarat muddle

by Jean Drèze, 11 April 2014

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The Hindu, April 11, 2014

AN INCOMPLETE TALE: In the 1980s, Gujarat already had the Public Distribution System, the mid-day meal scheme in primary schools and the best system of drought relief works in the country. The ’Gujarat model’ story fails to recognise that these achievements have little to do with Narendra Modi. Photo: AP

Why does Gujarat have indifferent social indicators, in spite of having enjoyed runaway economic growth and relatively high standards of governance?

Gujarat’s development achievements are moderate, largely predate Narendra Modi, and have as much to do with public action as with economic growth.

As the nation heads for the polling booths in the numbing hot winds of April, objective facts and rational enquiry are taking a holiday and the public relations industry is taking over.

Narendra Modi’s personality, for one, has been repackaged for mass approval. From an authoritarian character, steeped in the reactionary creed of the Rashtriya Swayamsevak Sangh (RSS) and probably complicit in the Gujarat massacre of 2002, he has become an almost avuncular figure — a good shepherd who is expected to lead the country out of the morass of corruption, inflation and unemployment. How he is supposed to accomplish this is left to our imagination — substance is not part of the promos. The Bharatiya Janata Party (BJP), too, is being reinvented as the party of clean governance, overlooking the fact that there is little to distinguish it from the Congress as far as corruption is concerned.
Spruced up image

Similarly, Gujarat’s image has been spruced up for the occasion. Many voters are likely to go the polling booths under the impression that Gujarat resembles Japan, and that letting Mr. Modi take charge is a chance for the whole of India to follow suit.

Some of Mr. Modi’s admirers in the economics profession have readily supplied an explanation for Gujarat’s dazzling development performance: private enterprise and economic growth. This interpretation is popular in the business media. Indeed, it fits very well with the corporate sector’s own view that the primary role of the state is to promote business interests.

However, as more sober scholars (Raghuram Rajan, Ashok Kotwal, Maitreesh Ghatak, among other eminent economists) have shown, Gujarat’s development achievements are actually far from dazzling. Yes, the State has grown fast in the last twenty years. And anyone who travels around Gujarat is bound to notice the good roads, mushrooming factories, and regular power supply. But what about people’s living conditions? Whether we look at poverty, nutrition, education, health or related indicators, the dominant pattern is one of indifferent outcomes. Gujarat is doing a little better than the all-India average in many respects, but there is nothing there that justifies it being called a “model.” Anyone who doubts this can download the latest National Family Health Survey report, or the Raghuram Rajan Committee report, and verify the facts.

To this, the votaries of the Gujarat model respond that the right thing to look at is not the level of Gujarat’s social indicators, but how they have improved over time. Gujarat’s progress, they claim, has been faster than that of other States, especially under Mr. Modi. Alas, this claim too has been debunked. Indeed, Gujarat was doing quite well in comparison with other States in the 1980s. Since then, its relative position has remained much the same, and even deteriorated in some respects.

An illustration may help. The infant mortality rate in Gujarat is not very different from the all-India average: 38 and 42 deaths per 1,000 live births, respectively. Nor is it the case that Gujarat is progressing faster than India in this respect; the gap (in favour of Gujarat) was a little larger twenty years ago — in both absolute and proportionate terms. For other indicators, the picture looks a little more or a little less favourable to Gujarat depending on the focus. Overall, no clear pattern of outstanding progress emerges from available data.

In short, Gujarat’s development record is not bad in comparative terms, but it is nothing like that of say Tamil Nadu or Himachal Pradesh, let alone Kerala. But there is another issue. Are Gujarat’s achievements really based on private enterprise and economic growth? This is only one part of the story.

When I visited Gujarat in the 1980s, I was quite impressed with many of the State’s social services and public facilities, certainly in comparison with the large north Indian states. For instance, Gujarat already had mid-day meals in primary schools at that time — decades later than Tamil Nadu, but decades earlier than the rest of India. It had a functional Public Distribution System — again not as effective as in Tamil Nadu, but much better than in north India. Gujarat also had the best system of drought relief works in the country, and, with Maharashtra, pioneered many of the provisions that were later included in the National Rural Employment Guarantee Act. Gujarat’s achievements today build as much on its ability to put in place functional public services as on private enterprise and growth.
Misleading model

To sum up, the “Gujarat model” story, recently embellished for the elections, is misleading in at least three ways. First, it exaggerates Gujarat’s development achievements. Second, it fails to recognise that many of these achievements have little to do with Narendra Modi. Third, it casually attributes these achievements to private enterprise and economic growth. All this is without going into murkier aspects of Gujarat’s experience, such as environmental destruction or state repression.

At the end of the day, Gujarat poses an interesting puzzle: why does it have indifferent social indicators, in spite of having enjoyed runaway economic growth for so long, as well as relatively high standards of governance? Perhaps this has something to do with economic and social inequality (including highly unequal gender relations), or with the outdated nature of some of India’s social statistics, or with a slackening of Gujarat’s earlier commitment to effective public services. Resolving this puzzle would be a far more useful application of mind than cheap propaganda for NaMo.

(Jean Drèze is Visiting Professor, at the Department of Economics, Ranchi University.)


The above article from The Hindu is reproduced here for educational and non commercial use