November 30, 2022
Good morning. In today’s either/view, we discuss whether the Gujarat model has been a success. We also look at the corruption of computer servers of AIIMS in Delhi, among other news.
📰 FEATURE STORY
Dissecting the Gujarat Model
The Gujarat model became a huge success story for the overall development of the state under the guidance of Narendra Modi, who was Chief Minister at the time. While the Gujarat model refers to a period of improved progress and growth under the economic policies put in by Modi, the politicisation of the growth model has made it one of the tenets of the BJP’s electoral campaigns over the years.
In a lot of ways, the Gujarat model served as an ideological puzzle to supporters and opponents alike. While the infrastructure and economically-centred policies that improved the state was favoured by many, his polarising and unapologetic advocacy of a Hindutva agenda that could hamper basic rights was feared by many. While this dichotomy of opinion over BJP’S policies and agenda has always existed, one should delve into the extent to which the Gujarat model actually benefited the state and the long-term validity of this model.
The Gujarat model refers to a period from 2002-03 to 20011-12, during which Gujarat experienced an increased jump in its growth rate. Narendra Modi’s innovative interpretation of neoliberal policies was the driving force of this growth.
This growth strategy had three major components; a jump in infrastructure to facilitate the inflow of corporate investment; a leap in governance to address corporate units’ needs; and a record increase in incentives and subsidies on corporate investment to attract investment. 24-hour power has been made available through infrastructure development focused on roads, airports, and power; this scheme was called the Jyoti Gram Yojana.
There were also various incentives for corporate investments, which included subsidies on sales tax – almost 40% of the tax was forgone. The government introduced subsidies on capital, interest, and infrastructure, as well as heavy subsidies on land, water supply and natural resources. The rates of subsidies were larger for larger investments. This led big stakeholders – both internal and external – to look at the state as an attractive arena to set up industries, boosting the economy of the state itself.
The Gujarat model also included initiating change at the grassroots level – this included schemes like the Van Mahotsav that focussed on tree plantation and preservation of the environment. Secondly, schemes like Kanya Kelavani and Shala Praveshotsav focussed on enrollment at the primary level, especially among girls. This led to major improvements in the educational sector.
Modi’s Gujarat model of development is legendary and something the party has used to gain votes elsewhere, promising similar development in other states. Modi, in an interview with Andy Marino, had said of his famous Gujarat model, “India is vast and varied, and you must remember to adjust policies to local conditions and free people to make their own decisions – get the government off their back.’’ The Gujarat model had transitioned from a policy framework to a cleverly positioned PR stunt.
VIEW: The Gujarat model has been successful
In many ways, the holistic model for progress in Gujarat that CM Modi had pushed for has been successful. When compared to most other states, which are still having difficulty providing round-the-clock three-phase power more than eight years after Modi assumed the position of Prime Minister, Gujarat’s achievement of achieving no load-shedding status by 2014 appears to be all the more amazing.
The Jyoti Gram Yojana in Gujarat encouraged the growth of companies like ice cream shops and cold-food chains while significantly lowering reliance on the polluting diesel gensets that are pervasive in Indian towns. Migrations from rural Gujarat decreased by 33%, the dropout rate for female students decreased by 80%, and the amount of investment that students put in their education increased significantly.
The Jyoti Gram Yojana scheme’s basis was a vast effort to divide transmission lines into feeders for home and agricultural usage, which required the installation of more than 78,000 km of power cables. While the inauguration of the Narmada dam and associated waterworks enlarged the area under cultivation in the state, it was also coupled with the growth of agricultural processing. This indicates growth at a grassroots level which helped the weaker sections of India’s population.
In the 13 years Modi was chief minister of Gujarat, power consumption increased, the length of its roads nearly tripled, its GDP contribution increased at a faster rate than the national average, and the state’s debt decreased by more than 10%. Furthermore, looking at it from a social welfare angle, the rates of those in Gujarat who were below the poverty line had also decreased.
The Gujarat Model was completely holistic since it included all of the state’s operations, including industrial, agricultural, service, and human development indicators. Even after Narendra Modi stepped down as chief executive, the Gujarat Model has survived, and it stands as one of the leading states in terms of economic infrastructure and growth.
COUNTERVIEW: The Gujarat model has been unsuccessful
While various policies and schemes under the Gujarat model can be understood as initial successes, it is important to understand the long-term efficacy of the model with respect to the overall progress of the state.
While Gujarat did experience high agricultural growth, this was short-lived as droughts and a water shortage after 2011–12 caused the rate to drop to 3.7% from 7% with significant swings. Agriculture is further harmed by a low minimum support price (cost of production is substantially greater), inadequate crop insurance (coverage is just 10–12% even in favourable regions), and dwindling state investment in the sector. The growth initiated by the Gujarat model was not equal, as several marginal farmers did not receive benefits, and the overall benefits and wages received by farmers have been low. Sources of irrigation like groundwater are depleting badly without phased attempts to recharge them.
The large-scale favours given to businesses had an effect on the exchequer since the State was forced to forgo revenue, leaving it with little to spend on social sectors. This lack of investment was detrimental as it did not help improve the struggling population who needed assistance.
The industry drive also had two additional crucial outcomes. Two facts that were not previously discussed: (1) employment generation decreased, and (2) the state’s debt load grew. Therefore, the highly praised Gujarat model had a financial as well as a social cost.
Looking at the 2011 census data, Gujarat had 68.39 lakh landless agricultural labourers. In the ten years that had passed, their numbers would have increased. In addition to this, there are reportedly 5 lakh migrant labourers, 15 lakh construction workers, and other non-farm employees in rural areas. Most of them are not covered by the minimum wage. These numbers were not adequately accounted for when speaking about the success of the Gujarat model.
- How Gujarat’s political stagnation has severely stunted its development – Scroll
- Back to the Gujarat Model – Open
- Gujarat Model: A Template For Growth – Organiser
- Whatever happened to the Gujarat model? – Business Line
- How the success of BJP’s Jyoti Gram Yojana is changing the Gujarat poll narrative on electricity – Business Line
- The Truth Behind the Gujarat Growth Model – The Wire
- Number theory: Gujarat’s economic inequality challenge – Hindustan Times
- ‘Gujarat Model’ – It’s All About High Growth, Low Wages – News Click
- A look at Narendra Modi’s rise to power in Gujarat – Deccan Herald
- India must follow the Gujarat model for solar power success – Construction Week
What is your opinion on this?
(Only subscribers can participate in polls)
a) The Gujarat model has been a success.
b) The Gujarat model has been a failure.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
New confusion over national monuments comes from a fixation on ‘who destroyed what’
For the Left:
Turf battles: Shashi Tharoor versus the Kerala Congress
🇮🇳 STATE OF THE STATES
AIIMS server (Delhi) – The Delhi police have refuted claims that there was a ₹200 crores ransom relating to the server for AIIMS being down for the past week. The police said AIIMS didn’t receive any notification of a ransom. The institute said it’s in the process of restoring the data and cleansing the server. It’ll take time due to the volume of data and the large number of servers.
Why it matters: Last week, the primary and backup servers of AIIMS were corrupted. It was later found to be the result of a ransomware attack. There are concerns that the data of about 3-4 crore patients could be compromised. Due to the attack, services in the emergency, outpatient, and laboratory wings are being managed manually.
Snake rescue guidelines (Karnataka) – The Karnataka Forest Department released the state’s first operational manual for snake rescuers. It’s called the Effective Human-Snake Conflict Management and Mitigation – An Operation Manual for Certified Snake Rescuers. It’s drafted by herpetologist Romulus Whitaker, The Liana Trust founder-trustee Gerard Martin, and Sumanth Bindumadhav from the Humane Society. There are only five certified rescuers in Bengaluru.
Why it matters: Due to many uncertified rescues happening, many have suffered snake bites. Many of them aren’t aware of where and how to release the captured snakes. The rescuers will be trained and certified by the Forest Department. There’ll also be an online system for people to search for the names and numbers of certified rescuers.
Revenue from liquor shops (Jharkhand) – While reviewing the new excise policy for the state, Chief Minister Hemant Soren wasn’t happy about the working style of those operating liquor shops. He cited unpaid salaries to those working in liquor shops as the reason for a decline in revenue collection. He said their work would be reviewed in the next 15 days, and action would be taken if there was no improvement.
Why it matters: The new policy’s objective was to increase revenue for the state. Excise secretary Vinay Kumar Choubey said against the total target of ₹1,600 crores till November 2022, only ₹1,084 crores has been deposited. The sales efficiency of retail shops is only 73.75%. For October, the sales target wasn’t met. A fine of ₹18.22 crores could be imposed on the human provider agencies.
Karnataka border dispute & BJP (Maharashtra) – Both Karnataka and Maharashtra have accused the other of keeping the decades-long border dispute between the two states alive for political gains. The tussle could have an impact on next year’s Karnataka elections. The BJP could feel the effects more since they rule both states. Karnataka Chief Minister Basavaraj Bommai has blamed his Gujarat counterpart.
Why it matters: The Karnataka government says the rift has been used by Maharashtra parties, including the Shiv Sena, as a political tool. Over the years, the Maharashtra Ekikarna Samiti (MES) has lost ground, and the BJP has capitalised on votes with its Hindutva agenda. However, the MES has remained relevant with the Shiv Sena’s support. Congress hopes the rift will help it by dividing votes.
Clarity on cabinet decisions (Assam) – The Assam TMC has asked Chief Minister Himanta Biswa Sarma for a white paper on the implementation of the decisions taken by the government in cabinet meetings. The party said people still don’t know what’s happening at the weekly cabinet meetings over the past year and a half. One example cited was the setting up of a mini-secretariat in Silchar.
Why it matters: Last September, the state government held a cabinet meeting for the first time outside Gauhati at Dhemaji. The next meeting was held at Bongaigaon and the following one at Haflong. The government held a cabinet meeting for the first time in New Delhi last week.
🔢 KEY NUMBER
$385 billion – According to Forbes, the combined wealth of the top 10 richest people in India is $385 billion. Data showed the combined wealth of India’s rich grew by 25% amidst the depreciation of the rupee and inflation concerns.