Wednesday, December 19, 2012

Growth stories from Gujarat

It is a common experience for visitors to Gujarat to be told, by the many residents they meet, including auto-rickshaw and taxi drivers, that the chief minister has truly brought economic prosperity to the state. Gujarat has become a dreamland of success for those who seek “roti, kapda aur makaan” in their own states. The chief minister has succeeded in creating an impression that “salamati and samruddhi” have been achieved. The aam aadmi in Gujarat and elsewhere believes that he is a “mard”, a macho man. Indeed, the real success here lies in the way a larger-than-life image has been established.
Gujarat’s economy has certainly grown, but this is because of a strong previous record of growth. The last 10 years look good because the previous two decades were also years of sound economic growth, apart from the odd year of drought. Since 2000, there has been no serious drought. The drinking water problem has been solved after the Narmada project became operational. The agriculture sector has grown, but at the cost of foodgrain-producing areas. Gujarat’s track record with respect to the PDS being tardy, food security has been jeopardised. Soil health has seriously deteriorated. In the industrial sector, the economist and nominated Rajya Sabha MP affiliated to the Congress, B. Mungekar, has shown that during 1995-2000 and 2001-10, Gujarat experienced an increase in annual rate of growth from 8.01 per cent to 8.68 per cent. Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh have also experienced growth at comparable rates. Gujarat was not number one in either period. It was second after Rajasthan, with 8.34 per cent, in the first period and third after Uttarakhand, with 11.81 per cent, and Haryana, with 8.95 per cent, in the second period. Industry has grown in Orissa and Chhattisgarh at 17.5 and 13.3 per cent respectively during 2005-09, higher than Gujarat’s 12.6 per cent. Gujarat ranked sixth among major states in per capita income in 2011, with Rs 63,996, after Haryana (Rs 92,327), Maharashtra (Rs 83,471), Punjab (Rs 67,473), Tamil Nadu (Rs 72,993) and Uttarakhand (Rs 68,292).
By 2000, Gujarat was already an industrially well-developed state. According to data published in the state’s Socio-Economic Review, 2011-2012, road infrastructure statistics suggest that very little was added to road length since 2002. It was 74,018 km, counting all types of roads, in 2002, and it was 74,117 km in 2009. About 5,000 km of road was tarred during 2000-10, compared to 23,000 km during 1990-2001. The length of state highway decreased and that of the national highway, a Government of India project, increased from 2,382 to 3,245 km. The vehicles on the road also tell a similar story. Two-wheelers, cars, jeeps, passenger buses and cargo vehicles increased faster during the 1980-90 and 1990-2000 periods, compared to 2000-10. During 1980-90, two wheelers increased 5.2 times, during 1990-2000, 2.92 times, and during 2000-10, 2.37 times. In 1980, there were 2.41 lakh two-wheelers, followed by 36.73 and 99.61 lakh in 2000 and 2010 respectively. Similarly, cars grew by 2.68 times during 1980-90, 2.81 times during 1990-2000, 2.65 times during 2000-2010. Their numbers were 0.53 lakh in 1990, 3.98 lakh in 2000 and 13.04 lakh in 2010. Jeeps and private passenger buses have replaced the Gujarat State Road Transport Corporation buses. Cargo vehicles show the same trend as two-wheelers and cars.
Gujarat is better placed when it comes to the power sector. As the socio-economic review also shows, distribution has improved remarkably in the last 10 years. However, the growth in installed capacity and generation has been higher during 1990-2000 than 2000-2010, including participation from the private sector. The installed capacity increased from 4,823 MW in 1990 to 8,343 MW in 2000 (1.73 times), to 12,008 MW in 2010 (1.44 times). Generation was 22,834 MW in 1990 and increased to 49,379 in 2000 (2.2 times), to 69,883 MW in 2010 (1.41 times).
One can thus see that Gujarat’s growth performance was better during 1990-2000 than 2000-2010. Then why is 2001-12 being given all the credit as a model of growth? Partly, this is a matter of visibility. Construction has boomed. There is a huge number of vehicles on the road. Flashy shopping malls, fancy homes, and a variety of cars are to be seen. The hospitality industry has exploded. Hotels and restaurants have visibly mushroomed. The more affluent display their wealth. There is great publicity and fanfare, which has created an impression of high growth.
However, there is also a dark side. Increased purchasing power, even for the poor, does not guarantee that nutritious food is consumed. The purchase of mobile phones and recharge coupons may have priority. In 1997, reportedly, there were only 4,100 mobile connections in Gujarat. In 10 years, the one-crore mark was reached. It was two crore in the next 17 months. By January 2010, Gujarat had three crore mobile phone connections. Gujarat’s per capita income of $ 3,290 in 2008 was higher than the Indian average ($2,753) and those of Nigeria, Cameroon, Kenya and Sudan (all less than $2100), yet the hunger index, calculated in an IFPRI study for Gujarat, was way higher than even poor African countries, at 25 per cent. Gujarat was ranked 13th among 17 major states in the hunger index. The index is calibrated with the proportion of the population not consuming adequate calories, the proportion of underweight children under five, and the mortality rate among children under five. This is clearly a reflection on human development in Gujarat. Amid the plenty, many still perish.
In an IIM Ahmedabad study monitoring millennium development goals, it was found that Gujarat was relatively efficient in converting its health-related output indicators to outcomes during 1998-01, but relatively inefficient in the same by 2006-09. It was similarly less efficient in converting inputs to outputs. The education situation is no different, with for-profit education gathering force. There is evidence to show that access, expansion and quality for the poor and vulnerable have seriously suffered in primary, secondary and higher education.
The exclusive focus on economic growth has produced another major setback. Environmental health has deteriorated in Gujarat, and continues to do so, as these concerns are brushed aside. Gujarat is home to several environmental and ecological hotspots. However, the environmental costs are being disregarded, and some of the resultant damage is irreversible. The spirit and pace of industrialisation and urbanisation have destroyed prospects for sustainable land use. Small and marginal farmers, tribal populations, pastoral communities, salt-pan workers, and specific sections of other minorities have become the invisible half of Gujarat. They are losing land commons, forest produce and being progressively marginalised. The cash compensation to land at market rates has been tempting, and before the money comes, the expenditure plan is already in action, eventually turning many into paupers. Livelihood issues will soon become a serious problem in Gujarat, which does not augur well for social health. This popularity, gained by dancing on the waves of economic growth, is soon going to turn its society into one with severe inequities. Gandhi is absent wholesale from Gujarat.