Tuesday, December 18, 2012

Poverty amid prosperity

Atul Sood
There is a widespread belief that Gujarat is a shining star on the Indian growth horizon and that all other States would do a great service to Indian masses by emulating the model of development that Gujarat embarked upon under the stewardship of Narendra Modi. A recent study, Poverty Amidst Prosperity: Essays on the Trajectory of Development in Gujarat (Aakar Publication, forthcoming), by 10 independent researchers (including this author) suggests that when it comes to Gujarat, we have not one but several things to worry about. Carefully reviewing the cardinal principles of the development experience in Gujarat through the analysis of data and information provided by official sources, the study tells us how goals like social equality, sustainable livelihoods, access to education and health, justice and peace have been abandoned in the race for growth in the high-speed lane.
GDP growth in Gujarat has been notable in comparison to the all-India level in the last two decades. Other States that have grown at similar rates in the last decade are Maharashtra, Haryana and Tamil Nadu. Unlike these States, the high growth rate in Gujarat is more balanced; it is the result of enhanced performance of almost all sectors, particularly the agricultural sector. However, only a careful look at the performance figures, in terms of employment, wages, consumption, poverty, inequality, and outcomes in health and education, reveals that this broad based growth has resulted in worrisome outcomes.
Biggest casualty
The biggest casualty of the ‘successful’ growth in Gujarat (and least discussed) is employment. The aggregate employment in Gujarat has remained stagnant (NSSO data shows growth in employment for the period 1993-94 to 2004-05 was 2.69 percentage per annum, whereas for 2004-05 to 2009-10 it came down to almost zero). The stagnant employment growth in the last five years in Gujarat is better than the decline in employment experienced at the national level but lags far behind Maharashtra, for instance. During the last 17 years (1993 to 2010), growth rates of employment for rural Gujarat and rural India have been on a par, while urban Gujarat performed slightly better compared to all-India. In the last five years, employment in rural Gujarat has declined in spite of exceptionally high growth in the rural sector. The loss in rural employment has occurred along with reduced participation of small farmers in the fast growing, high value crops and reduced access to cultivated land because of changes in the norms for sale and purchase of land. Marginal growth in employment in recent years has occurred mainly in the services sector, especially in the urban areas. Mostly, this job creation is casual in nature.
Gujarat’s contribution to India’s manufacturing employment has also remained almost stagnant over the three decades, in spite of doubling its share in Gross Value Added. In addition to poor gains in employment, the manufacturing sector in the State is also characterised by slow growth in wages (1.5 per cent in the decade of 2000 when the all-India wages grew by 3.7 per cent), increasing use of contract workers ( from 19 to 34 per cent between 2001-08), and overall reduced position of workers in the manufacturing sector (with the lowest share of wages in Gross Value added in the decade of 2000 in comparison to Haryana, Maharashtra and Tamil Nadu). Paradoxically, this worsening condition of workers in the manufacturing sector is accompanied by increasing profitability and growing investment in the sector. While there is a growth in the manufacturing sector, Gujarat’s Scheduled Tribes’ dependence on agriculture has increased, particularly during 2005-10 period. The share of STs in regular employment remains stagnant — it was 7 per cent in 09-10, same as in 1993-1994 and, for Muslims it is 14 per cent today, while it was 15 per cent in 1993-94.