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Shining Gujarat: The True Story

Tuesday September 27, 2011 06:25:22 PM, Staff Reporter

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Malegaon: Despite tall claims by the state Chief Minister, Narendra Modi and hype created by a section in the media about the development and prosperity in the state, the ground realities in Gujarat vis-à-vis hunger, foreign investment, per capita income, pro-people measures by the government, poverty and human development ranking are not encouraging. They are in fact worse than many under-developed states in India, claims a study conducted by the National Council of Applied Economic Research. 


Dr. Abusaleh Shariff, who conducted the study, to come to this conclusion reviewed how Gujarat is faring in other measures of standard of living such as poverty, human development, hunger and so on. Dr Shariff also reviewed how various socio-religious communities living in Gujarat are placed in a relative perspective.


He used data from the National Accounts (NAS), the Reserve Bank of India, National Sample Survey Organization, the Human Development Survey of the National Council of Applied Economic Research and the Prime Minister's High Level Committee (Sachar Committee) report. The FDI information according to main centers of investments is drawn from ministries of Commerce and industry.


Stating that Gujarat emerges as a State with high levels of hunger, while simultaneously boasting high per capita income and consistent income stability, Dr Shariff wrote in his report, "Disturbingly Gujarat's hunger levels are high alongside Orissa and Bihar, with only Jharkhand, Chhattisgarh and Madhya Pradesh having higher hunger levels. Punjab, Kerala and Haryana (in whose league Gujarat was placed in terms of per capita NSDP), are very progressive measured by levels of hunger having least hungry population. Even Uttar Pradesh has registered lower levels of hunger Gujarat."


"This paradox", he wrote, "Is explained by the fact that state such as Uttar Pradesh has vast areas under multi-cropping cultivation cycle with the blessing of the perennial supply of water from the mighty river Gaga. This ensures that in spite of UP's population being poor, they are at least minimally fed. Incomes are more evenly spread in Uttar Pradesh, Tamil Nadu and West Bengal. Uttar Pradesh in fact fares a notch above even Tamil Nadu and West Bengal in having lower hunger; but Gujarat is much above all these states in having relatively higher incidence of hunger."


"Furthermore", he wrote, "Rajasthan has also recorded lower levels of hunger compared to Gujarat and this appears to be due to pro-poor state policies. Therefore, this analysis gives credence to the fact that Gujarat is a state where the rich-poor disparities are far greater relatively speaking."

Income, Poverty and Human Development Linkages

Stating that there is a positive association between income and poverty (lower poverty), and human development (higher), he wrote, "Higher position in human development ranking relative to poverty is an evidence of pro-people welfare state. One finds such an association in Kerala, Tamil Nadu, Karnataka, Maharashtra, West Bengal and even Orissa, which has higher HDI ranking compared with respective ranking in per capita income and poverty about the second half of 2000s in the ranking undertaken for 19 major states."


"On the other hand", he continued, "Gujarat has recorded relatively lower level of human development ranking compared with its poverty ranking – while in latter 2000s it tops at 6th level in income, but is places one level lower in poverty (that is higher poverty relative to income) but ranked 9th in HDI, far too low which is unexpected."


"The higher income levels must yield better human development, generally speaking as people will be in a better position to make investments in education, health and wellbeing. Orissa which reveals high levels of poverty performs better on the HDI; in fact it shows resilience in improving HDI at its own level of development and poverty. Further, one notice that the relative ranking of Gujarat in incidence of poverty and human development has declined between the mid 1990s and latter part of 2000s", he wrote.

"When the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) was evaluated, Gujarat is found to be at the bottom of the list of large Indian states. In fact Rajasthan is at the top, followed by Madhya Pradesh, Chhattisgarh and Tamil Nadu", he found in his study.

Questioning the reports and claims that large amounts of foreign, often NRI linked, investments in Gujarat are in plenty, Dr. Shariff wrote, "The region/state specific FDI data provided by the "department of industrial policy and development‟ suggests that the size of cumulative inflows from January 2000 to March 2010 has been highest in Maharashtra with 1.75 lakh crores, followed by New Delhi at 1.02 lakh crore. Even the state of Karnataka has received 31 thousand crores which ishigher than the FDI in Gujarat only with 28 thousand crores. The FDI line up continues with Tamil Nadu, (Rs. 25 thousand crores), Andhra Pradesh (Rs. 21 thousand crores) and Kolkata having received a meager 6 thousand crores."

"Thus Gujarat is a game for playing the “the politics of development” and no one is caring to assess if such tall claims have any truth behind them. Hype and hoopla built around foreign direct investment (FDI) in Gujarat is a lie. Gujarat can be considered a hunting ground "for NRI and corporate politics", and that "the FDI hype" is designed to facilitate tax subsidies, cheap licensing, under-priced land and low royalty payments to the investors. Often the politics works in such a way that Gujarat is used as a platform for corporate negotiations and investments in other states", he opined.

"Investments announced in Gujarat appear largely promises, as the real amount invested is found to be a fraction of the amount promised due to practical reasons", he wrote.


Per Capita Net State Domestic Product (PCNSDP)

Stating that per capita SDP or income is an indicator and measure of economic prosperity and agreeing that Gujarat is a well-off State, figuring among the top ten in terms of per capita State Domestic Product since long, Dr Shariff wrote, "A review of triennium averages in constant prices since the 1970s suggest that Gujarat has been occupying 6th or 7th positions most of the last four decade excepting mid-1996 when it was at the 4th position. For the year 2007-08 and in terms of current prices, Gujarat had an income of Rs. 45, 773, but Haryana with an annual per capita income of Rs. 59,008 tops the list followed by Punjab, Maharashtra and Kerala. Tamil Nadu, Karnataka and Andhra Pradesh are a notch below in the vicinity of Gujarat competing to climb up."


Questioning the claims that Narendra Modi has been instrumental in dramatic turnaround in Gujarat, Dr. Shariff wrote, "(No doubt) Gujarat is one of the large states in India known for sustained levels of development. "Gujarties‟ the people of Gujarat so identified - rings a bell in imagination as enterprising people with an edge to manage and invest money in businesses and enhance savings. (But) These Gujarati attributes are not new, rather age old; and developed over centuries especially due to their easy contact with the travelling business men from all over the world at the Indian west-coast."


"Overall the economic status of Gujarat has been stable and relatively on the higher side at least since last four decades. Thus the Gujarat growth story measured in terms of macro economic indicator is not new; rather it is an old one", he added.


Agreeing that Gujarat has over 90 percent paved roads to villages, 98 percent electrified villages with 80 percent electrified homes and 18 hours of electricity everyday, 86 percent piped water supply and better phone connections, banks, post offices, bus connection compared to other states. Agricultural extension work, too, is better than in other states, Dr. Shariff found in his study, "Amid all this, poverty, hunger and sense of insecurity thrive in Gujarat."




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