MODI'S GUJRATH MODEL

               MODI’S GUJARAT MODEL:

During election Modi offered voters to implement the “Gujarat model” and he tried to extrapolate it to the rest of the nation.  How far this model speaks for development and governance is a question.  I would like to refer to the book (The Gujarat Model of Growth, Development and Governance) edited by Indira Hirway, Amita Shah, Ghanshyam Shah.)  Jan Breman has reviewed this book and he brings out the salient points from this book. I quote an abridged version.

“There was indeed a major spurt in economic growth from 2002-03 to 2011-12. They dispute, however, that this process can be written up as having resulted in development, understood as expanding the choices for all people in society. Tim Sebastian denies in an econometric exercise that Gujarat stands out as a different model, and its growth rate is equal to Maharashtra, Karnataka, and Haryana. Gujarat became one of the fastest growing states in the country precisely by ignoring or even sacrificing major development goals. The policy frame has been one of exclusion rather than social inclusion. To realise his ambition to make Gujarat "the most attractive destination for investments in the world", its high-profile driver went out of his way to placate corporate business with favours, and easy access to land, credit, and infrastructure. The chief minister of Gujarat thus ushered in a climate of crony capitalism, and the overt plus covert support he got from this lofty corner is meant to enable him now to proceed in the same direction countrywide. The huge expenditure on tax breaks and subsidies granted has been at the cost of public funding for the social sectors, which helps to explain why on this expenditure Gujarat ranks closer to the bottom of the major states in India. The overall decline between 2000-01 and 2009-10 in the percentage of public expenditure to gross state domestic product (GSDP) spending on primary education, health, family welfare, and social protection has been the steepest in Gujarat.

Contrary to official pretension, growth in Gujarat has not been inclusive by pointing out that the class divide between (owners of) capital and labour has further polarised, while the urban rural contrast has deepened. At least two-thirds of the rural population has to defecate in the open, and an even higher percentage does not get safe drinking water. A large segment of urban inhabitants is similarly deprived of basic facilities. Informality is the name of the economic game for the workforce of Gujarat. The state ranks at the bottom of the national wage heap. Excessively low wages for men and women in both the rural and urban economy as well as new forms of child labour show why Gujarat is not an exceptional case. The difference is one of degree. Nevertheless, what makes this state remarkable is the paradox between a weak or even absent commitment to the well-being of the masses and a strong commitment to growth benefiting a well-endowed minority. The priority given to the latter objective at all costs is borne out by the depletion of natural capital, demonstrating a willful neglect of environmental sustainability.

In this setting, redistribution is a dirty word. Another indicator of the unholy alliance between the capitalist class and the government is that the tax squeeze in Gujarat is among the lowest in the country. Still, the received wisdom remains that poverty has impressively gone down from 37.8% in 1993-94 to 31.6% in 2004-05 and to 23% in 2009-10.  For sure, there are -small fractions among the rural poor who have somehow managed to become somewhat better off, and they may have risen slightly above the so-called poverty line. This does not mean, however, that the famous trickle-down premise has begun to accelerate. In view of the ongoing exodus of the land-poor and landless proletariat from the countryside, and taking on board the evidence of growing disparity, conditioned by low wages and decreased employability in the primary and secondary sectors, it would be preposterous to accept a progressive fall in the rural poverty rate.

Agricultural output has increased, although at a significantly lower rate than the 10% claimed by the state. The success is mainly due to expansion of the area irrigated by the Sardar Sarovar Project and the tapping of groundwater resources in dryland regions. This improvement allowed for the cultivation of high-value crops such as cotton, fruits, vegetables, and oilseeds. Animal husbandry also saw a commendable boost in production. A village-based survey of landowning households split up into marginal-to-small and medium-to-large landholders showed an uneven spread of land productivity and income benefits from crop cultivation. The growth mechanism as found may continue to exclude or bypass the lesser endowed regions and communities, including landless households, from reaping substantial benefits from the sustained rise in agricultural production and productivity. Finally, notwithstanding the progress made, the share of the primary sector has gone down to no more than 12% of the state domestic product. The worrisome feature is that more than half of the total workforce continues to be partially or wholly dependent on whatever agrarian employment is available. The lack of demand drives them in a relentless search of gainful work to other sectors of the economy.

Employment Has Declined

Has Gujarat's high growth model managed to generate a large number of "decent jobs"? The firm answer is no. The slow growth of employment in the state has been mainly in the construction and services, and trade and transport sectors but nearly always on conditions of informality, which imply casual rather than regular wage jobs or self-employment, low and piece-rated payment, lack of social security and protection, and the absence of collective action to bargain for a better deal. Informalisation has also taken over employment practices in the formal economy. In other words, there are no decent jobs, which would mean availability of employment in conditions of regularity, freedom, equity, security, and dignity.

Small scale industries and labour-intensive manufacture are no longer the darlings of government, corruption has increased, pollution and ecological degradation are rife in what is called the Golden Corridor, and labourers are exploited there as never before. In this scenario, it comes as no surprise that Gujarat is one of the worst performing states on the hunger index, the other four being states with low growth rates. Quite alarming is the shrinking of agency in civil society.  Untouchability is widely practiced, but the government has ordained that this information need not be made public.

The Hindutva mindset and its majoritarian politics, are part and parcel of the Gujarat model.  The religious minority came to be qualified as "the Other", the enemy in our midst that has to be driven out. The condemnation of secularism, tolerance, and pluriformity; the pogrom carried out in 2002 with state complicity; and on the vicious policy of ghettoisation as an apartheid system that has torn up the social fabric.

Jan Breman (J.C.Breman@uva.nl) is Professor Emeritus at the University of Amsterdam and Senior Fellow at the Amsterdam Institute for Social Science Research. Economic & Political WEEKLY® SEPTEMBER 27, 2014 VOL XLIX NO 39.