A war of words has erupted between the chief ministers of Bihar and Gujarat. Bihar's chief minister Nitish Kumar has slammed Narendra Modi for taking potshots at the state's slow socio-economic growth. The altercation began with Modi saying that caste politics has ruined states like Bihar and Uttar Pradesh. Hitting back, Nitish has said that Modi should look at the conditions in his own state before criticising others.

For the last several years, Modi has been successful in projecting his "vibrant Gujarat" as a role model of economic growth and himself as ''Vikas Purush". Though one must give due credit to Modi for his effective skills in making projections, one must also critically analyse this "growth story of Gujarat" based on facts and figures. Regretfully, as one examines the facts since Modi came to power in Gujarat in 2001, the story appears to be hollow and, at times, contrary to what is being projected.


First, about the rate of economic growth. During 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 8.68%. But so is the case with other major states such as Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. In fact, Gujarat was ranked second after Rajasthan (8.34%) in the first period and third after Uttarakhand (11.81%) and Haryana (8.95%) in the second period. What is remarkable, Bihar and Orissa, the two most backward and poverty-stricken states, have also shown growth pick up from 4.70% and 4.42% in the first period to 8.02% and 8.13% in the second period. Even smaller states like Sikkim and Arunachal Pradesh have registered growth of 11.01% and 8.96%, respectively.

During 2001-04, the rate of industrial growth for Gujarat was 3.95%, and during 2005-09, it was 12.65%. In isolation, this appears to be a phenomenal jump, but not so when compared to some other states. During these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%. Thus, the hitherto industrially backward states have far surpassed Gujarat.

In FDI, too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs. But Maharashtra and Tamil Nadu with Rs 4.20 lakh crore and Rs 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs 3.61 lakh crore and Rs 2.99 lakh crore more than Gujarat without much fanfare and Modi's much-hyped industrial summits.

In the area of credit-deposit ratio, Gujarat is far behind other major states. In 2010, Gujarat's share in total deposits of the scheduled commercial banks was 4.70%, as against 5.42%, 6.20%, 6.34% and 26.60% for Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, respectively. The share of Gujarat in total credit disbursed by these commercial banks was 4.22%; while the same for Maharashtra, Karnataka and Tami Nadu was 29.75%, 6.71% and 9.61% respectively.

The amount of per capita deposit and per capita credit for Gujarat was Rs 37,174 and Rs 24,268; while for Tamil Nadu, it was Rs 42,580 and Rs 47,964; Karnataka Rs 49,598 and Rs 38,154; and Maharashtra Rs 1,10,183 and Rs 89,575. Even Kerala did better than Gujarat with Rs 43,890 and Rs 27,912.

In terms of per capita income (PCI), in 2011, Gujarat ranked sixth among major states with PCI of Rs 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471), Punjab (Rs 67,473), Tamil Nadu (Rs 72,993) and Uttara-khand (Rs 68,292).

What about inclusive growth in Gujarat? Though Gujarat, with 31.8% people below the poverty line did better than Maharashtra and Karnataka, it still lagged behind Kerala, Punjab, Himachal Pradesh and Haryana, where poverty levels were 19.7%, 20.9%, 22.9% and 24.1%, respectively.

On three important social indicators, viz life expectancy at birth (LEB), mean years of schooling (MYS) and school life expectancy (SLE), Gujarat is far behind some other states. In Gujarat, the LEB during 2002-06 was 64.1 years and it ranked ninth among major Indian states. In the areas of MYS and SLE, during 2004-05, it ranked seventh and ninth, respectively. Kerala ranked first in all three indicators. Even Maharashtra, Himachal Pradesh, Punjab, Haryana, Tamil Nadu and Karnataka performed much better than Gujarat.

With respect to Human Deve-lopment Index (HDI), Gujarat's story is devastating. The HDI for Gujarat, in 2008, was 0.527 and it ranked 10 {+t} {+h} among major states. Kerala stood first (HDI: 0.790), Himachal Pradesh scored 0.652, Punjab 0.605, Maharashtra 0.572 and Haryana 0.552. With respect to three HDI components — income, health and education — Gujarat does not present a shining story. In this respect, states like Kerala took the lead in every sector, while Punjab, Himachal Pradesh, Haryana, Maharashtra, Tamil Nadu and West Bengal did better than Gujarat.

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There has been a discernible pickup in Gujarat's growth performance since the 10th Plan (2002-07), the five-year Plans being natural periods for breaking up the timeline. It's tempting to argue that there is nothing exceptional in this. Gujarat grew fast during the 8th Plan (1992-97) too. While that's true, one should accept that as development occurs, it becomes more difficult to sustain higher rates of growth.


Among larger and relatively richer states like Maharashtra, Haryana, Gujarat, Kerala, Punjab, Tamil Nadu and Karnataka, it is more difficult to find sources of growth. Growth tends to taper off. Relatively poorer states like Bihar, Orissa, Madhya Pradesh, Assam and Jharkhand find it easier to catch up. Had historical trends alone provided the momentum for growth, Karnataka should have also grown extremely fast.

Moving to a higher growth trajectory is important. But reducing the volatility of growth is no less important. Growth rates in Gujarat have become much less volatile. Given Indian conditions, volatility is fundamentally a function of what has been happening to the agricultural sector.

SECTORAL ISSUES

In any discussion of any country or state's economy, it is customary to discuss sectoral compositions of GDP or GSDP early on - primary/ agriculture, secondary/industry, tertiary/services etc. In popular perception, at least in some quarters, Gujarat's economic growth is about industry. Gujarat is about an investment destination for industries, about Vibrant Gujarat. It is about sectors like bio-tech and pharmaceuticals, chemicals and petrochemicals, engineering, automobiles and ancillaries, food and agri-business, gas, oil and power, gems and jewellery and IT.

Industry isn't just about large-scale industry. That's a misconception. The 2009-10 survey of the Annual Survey of Industries (ASI) covered the entire factory sector. This shows an increase in the number of factories to 15,576 and 9.8% of India's factories are in Gujarat. At 13.22%, the share is higher in net value added. In decreasing order of importance, these factories are in segments like chemical and chemical products, basic metals, machinery and equipment, non-metallic mineral products, textiles, food products and pharmaceuticals. Together, they provided employment of 1.2 million.

Provisional figures show an increase in the number of factories to 25,206 in 2010, with an employment of 1.3 million. 0.13 million MSME enterprises in Gujarat were in 369 clusters, a pattern also exhibited in Tamil Nadu and Uttar Pradesh, cluster being defined as a concentration in manufacture of the same product group.

This suggests that the positive externalities of cluster formation have tended to work and in all probability, many of these MSME enterprises perform an ancillary function. Also interestingly, at least for SSI, there has been a sharp increase in the number of registered units...At the lower end of the industrialization spectrum are cottage and rural industries. There are cluster development schemes for khadi, handlooms, handicrafts and skill upgradation and market development schemes.

Other than schemes like Sagar Khedu Yojana, Vanbandu Kalyan Yojana, Garib Samruddhi Yojana and even Garib Kalyan Melas, something like Mission Mangalam is also an attempt to integrate animal husbandry, agro processing, food processing, aquaculture, processing of forest products, handlooms, handicrafts, garments, bamboo and timber products into markets, through Sakhi Mandals, self-help groups (SHGs) and other communities of the poor. Gujarat Livelihood Promotion Company Limited (GLPC) was set up in 2010 to implement Mission Mangalam. Part of this inclusion is a financial inclusion agenda.

RURAL PUSH

Gujarat is known as a state with a strong manufacturing base and in constant prices, the primary sector's share in GSDP has declined from 19.5% in 2004-05 to 14.6% in 2010-11, a decline that was mentioned before. Agriculture's share (this includes animal husbandry) has declined from 13.2% in 2004-05 to 10.9% in 2010-11. While the share has declined, the growth rate of Gujarat's agriculture, especially since 2000, has been remarkable and has been commented upon.

Gujarat's agriculture has grown at more than 10%. In addition to water, electricity and roads, there have been other factors too. The Krushi Mahotsav programme was started in 2005 and is a month-long mass contact programme with farmers, including mobile "Krushi Raths". Soil health cards are issued for every plot of land. The Gujarat Cooperatives and Water Users Participatory Irrigation Management Act was passed in 2007 and participatory irrigation management introduced.

gujarat =bihar   hahhhhhhhhhhhhaaaaaaaaaaaaaaaaaaa r u coming from disri duniya-?????????????????

I never says gujrat= bihar. I always told bihar is 25 years behind national average in development.i just want to analyse wheather narendra modi's claim and achivment is simmilar or not.

Bihar is almost nowhere stands in the race. it is already ruined and looted by our esteemed leaders like Lallu and J mishra rather all have looted their and our Motherland. Now you may easily call them what such people be called who ruin our own land. I have never seen in the world except a few countries which polity is so corrupt and where people are so coward. I appreciate British who did all right or wrong to uplift their motherland , but we Indian are the the people who spit on the same dish in which we eat. Is that not true?????Dog , Indian and Hathi, apne hi jaat ka ghatee... That,s why British once ruled.. DOGS and INDIANS are not allowed at public place.... Listening all these might be affecting you all a lot, but I think, Akash Arjun, who has all the analysis power to judge the things by reasoning not by argument and tautology could say something.

dear Dkash, do you not think that you should open a forum where we all could raise our voice for the upliftment of Bihar in terms of its few major issues such as Corruption, bureaucracy, red tape, nepotism and Dowry, freedom to all, right to wear anything, right to roam anywhere and anytime for all, legalize prostitution and proscribing and nonsupporting the hooligans etc..... Awaiting your reply.

No doubt that Modi and Kumar both are doing well for their states but I 100% agree from rajshekh and I believe that anything going wrong in India we are the responsible for the same.

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