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Is Gujarat's red hot economy a myth?

fd24

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Is Gujarat's so-called red-hot economic growth a myth peddled by the government of the controversial chief minister Narendra Modi?

Mr Modi, who was blamed for not doing enough to stop the horrific 2002 anti-Muslim riots in the state after the burning of a train carrying Hindu pilgrims, has modelled himself as a no-nonsense economic reformer leading one of India's fastest-growing states.

In March, a senior minister of his cabinet told me that Gujarat has been recording scorching double-digit growth, prompting even The Economist magazine to call it India's Guangdong. "Modi Means Business" said Time magazine when it put him on the cover recently.

But a raft of recent articles in the Indian media suggest that that Mr Modi's claims may be overblown.

Examining data on the economic performance of Indian states during a seven-year-period - 2004-11 - AK Bhattacharya, editor of Business Standard, is puzzled by Gujarat's performance.

He finds that its economy grew by 6.3% annually during this period, up from average growth every year of 3.6% - a relatively low base - in a 10-year period ending 2003.
'Breakout' state?


More interestingly, states like Uttarkhand (13.2%), Bihar (10.9%), Maharashtra (10.7%), Tamil Nadu (10.4%) and Haryana (10.1%) recorded double-digit growth in the seven-year period under review.

None of these states have the kind of hype associated with them as does Mr Modi's Gujarat, which is often called the most business friendly state in India.

Of the five states with double-digit growth, Mr Bhattacharya notes, three are ruled by the Congress party, which has come under fire in the capital for going slow on economic reforms!

So is Gujarat really the "breakout" state that Mr Modi wants the world to believe?

"It has seen the most stable of governments for the last several years," Mr Bhattacharya writes. "And yet, it has seen its growth hovering around 6% for the last seven years." Is there something amiss?

Analyst Salil Tripathi has written about how "of all the hype surrounding Mr Modi, the oddest are some of the claims concerning the state's economic performance". Gujarat, he says, "has done well in recent years, but it lost ground soon after the riots, picking up pace only later".

Mr Tripathi writes about how states like Maharashtra, Tamil Nadu and Uttar Pradesh have bigger economies, and Gujarat actually spends more than it has earned, thus depleting its surpluses.

Gujarat also signed on to a fiscal responsibility law only after five other states did, and 20 states preceded Gujarat in implementing value added tax.

I have written in the past on how Gujarat fares the worst among Indian states in terms of overall hunger and malnutrition - 45% of children there are malnourished, according to the latest Indian Human Development report.

The state also has a poor record in checking infant and maternal mortality. And as journalist Hartosh Singh Bal pointed out recently, Gujarat's ranking among states in terms of literacy (18th) had actually slipped one place, the year Mr Modi took over.

"These figures belie Mr Modi's reputation as an efficient administrator" he wrote. "But you wouldn't know it reading the foreign media."

So is Mr Modi a spinmeister or is there something everybody is missing?


BBC News - Is Gujarat's red hot economy a myth?
 
I guess indian members here are going to storm all BBC correspondence offices in India....
 
If you ever enter Gujrat, which I doubt , you will see the growth it achieved in everything you name it. It might not be good enough for others but the people of Gujarat have vitnessed the transformation. So if they are happy I really don't care what BBC says :D

For your information Gujarat has overtaken Maharashtra in exports for the first time

I guess indian members here are going to storm all BBC correspondence offices in India....
No Indians will most likely post the BBC documentary that you don't like :D I think you remember the name :D
Please don't derail the the topic.
 
I don't think anyone can pass judgement on Gujarat's economy apart from Gujaratis themselves. You even have Gujarati congress claiming that Gujarat had made major progress in economic front under current leadership, to the utter dismay of central Congi leadership. You have minority leaders of the state coming in & praising the economic development of the state. So I don't think Gujarat needs a certificate from a BBC blogger. Just my two cents...
 
There are other state economies which are doing great. But Gujarat is outstanding. No doubt. They achieved alot in less time. Others are not far behind too. But some states are at a considerable distance

Which other Indian provinces have a similarly successful economic model, as compared to Gujarat?

From the "Economist" article:

20110709_asc124.gif


Gujarat consistently performs better than the rest of India, by a significant margin.
 
Which other Indian provinces have a similarly successful economic model, as compared to Gujarat?

From the "Economist" article:

20110709_asc124.gif


Gujarat consistently performs better than the rest of India, by a significant margin.
Rest of the India has 28 states so that graph will be like that for next decade.
Other states that are running are Bihar. It will not be on the list as it has a lot of past to cover up. But looking back to last 6/7 years Bihar has enter in positive from negative.
Another state is Maharashtra. But it's losing it's grip due to useless congress Governmet. Tamilnadu and Aandra Pradesh also going good too. Goa is also doing great in tourism and mining but recent scams spoil their name
 
Rest of the India has 28 states so that graph will be like that for next decade.
Other states that are running are Bihar. It will not be on the list as it has a lot of past to cover up. But looking back to last 6/7 years Bihar has enter in positive from negative.
Another state is Maharashtra. But it's losing it's grip due to useless congress Governmet. Tamilnadu and Aandra Pradesh also going good too. Goa is also doing great in tourism and mining but recent scams spoil their name

But Bihar is starting from a very low point. They still have the lowest GDP per capita out of all the Indian provinces.

"Percentage growth rate" is misleading, it's easy to grow from such a small base.

Gujarat on the other hand has a higher GDP per capita than the Indian average, yet from this high base they are still growing MUCH faster than the national average.
 

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