Gujarat Growth Story

Gujarat Growth Story

Economy

Since Shri Modi took over, there has been a significant revival of Gujarat’s economy. The resurgence of the economy is clearly visible in the GDP figures. In the decade of 2001-02 to 2011-12 the GDP growth of Gujarat was 10.1, much higher than the national average of 7.71.1

Inspite of Gujarat being a mercantile state and the general perception of Gujaratis being prosperous, the Per Capita Income of Gujarat (at Current Prices), according to the Planning Commission2 was an ordinary Rs 19,823, not much better than the national average of Rs 17,782 in 2001. After Narendra Modi took over, the Per Capita Income of Gujarat surged fastest in the decade between 2001-02 and 2011-12. The Per Capita Income of Gujarat saw a tremendous 340% rise as it reached Rs 87,175. The national average which was pretty close to Gujarat in 2001 was left behind at Rs 61,855 in 2011-12.

To understand the Gujarat model it is important to understand the growth pattern over the last 50 years

From III Plan to VII Plan – 1961 to 1990–Average growth 5.84% From VIII to IX Plan– 1992 to 2002 – Average growth 7.85% In X and XI Plan – 2002 to 2012 – Average growth 10.36%

1 http://planningcommission.nic.in/data/datatable/1203/table_161.pdf

2 http://planningcommission.nic.in/data/datatable/1203/table_166.pdf

Gross State Domestic Product (Rs. Crore)

Year Gujarat India % Share to India

1960-61 849 16512 5.1

1970-71 2496 42981 5.8

1980-81 8028 132550 6.1

1990-91 30627 515032 5.9

2000-01 111139 1925017 5.8

2010-11 530430 7266967 7.29

2011-12 611767 8353495 7.32

It is clear from the above table that Gujarat’s contribution to the national GDP has increased tremendously under Narendra Modi.

According to Planning Commission3, when Shri Narendra Modi took over as the CM of Gujarat in 2001, the public debt of Gujarat was a whopping 38.78% of GSDP. Due to sound policies of the Government, public debt has been steadily decreasing the debt over the years and the public debt in 2011-12 shows remarkable improvement and stands at 25.20% of GSDP. It is amply clear that the Gujarat Government has been phenomenal in reducing the load of debt. Gujarat ranks 18th in debt to GSDP ratio today, making it one of the least indebted states.

Critics allege that absolute numbers have gone up from Rs 43,000 crore in 2000-01 to Rs 1,50,000 crore in 2011-12. However, GDP has also increased in the same time period from Rs1,11,139 crore to Rs 5,94,563 crore. The relative indebtedness of a State is always seen as % of GDP, not as an absolute figure of public debt.

3 http://planningcommission.nic.in/data/datatable/1203/table_173.pdf

According to figures released by Planning Commission and NSSO, in 2004-05, 33.1% population in Gujarat comprised of BPL families. This figure decreased to 16.63% in 20011-12.

Agriculture

Agriculture Growth rate of Gujarat was a phenomenal 10.71% between 2001-02 to 2011-12 which was the among the fastest in the country while the country’s growth rate was around 3% in the same period.4This rapid growth in agriculture has tremendously increased Gujarat’s contribution to national Agriculture output.

Gujarat’s agriculture contribution to the nation’s agriculture economy has more than doubled from 3.6% in 2000-01 to 7.9% in 2011-12.

Within agriculture, there has been contribution from dairy and milk, horticulture and floriculture. This contributed significantly to rise in gross value added in agriculture from Rs 26,746 crore in 2004-05 to Rs 44,517crore in 2011-12, registering an increase of 66% within 7 years.

4 http://planningcommission.nic.in/data/datatable/1203/table_55.pdf

The Gross Irrigated area in Gujarat increased by a significant 57.27% in the last decade, while that at the national level increased by only 14.02%.5

Food grain production in Gujarat has nearly doubled in last decade from 47.32 lakh MT in 2002-03 to 92.57 lakh MT IN 2011-12. Similarly, oilseed production grew from 18.78 lakh MT in 2002-03 to 50.35 lakh MT 2011-12; indicating a rise of 168.1 %.

IIM Professor Vijay Paul Sharma’s research shows that the net sown area in Gujarat grew by 8.45% while the national average declined by 0.12%.

MSMEs & PSUs

In 2001, according to Government of India survey, 22.04% Small Scale Industries in Gujarat used to shut down. In 2006, this number came

5 http://eands.dacnet.nic.in/LUS-2010-11/S3.pdf

down to 12.27%. After 5 years when the Government of India failed to do a survey, Government of Gujarat did a sample survey and found that the number of SMEs/MSMEs closing down from 2006-12 was a nominal 5.24%. As on today, there are more than 5 lakh active & thriving SMEs/MSMEs & Small Scale Industries in Gujarat giving employment to more than 25 lakh people.

Dr. HP Kumar (Chairman & Managing Director, National Small Industries Corporation) stated that the small-scale industry growth in the nation is 19-20% whereas Gujarat is seeing 85% growth in the sector.6

The PSUs which are considered as liabilities were making a loss of 2702 crore when Narendra Modi took over, they recorded a profit of 4041 crore in 2012-13.

Education

During 1991-2001, improvement in Overall literacy was 13.2 percentage points for India compared to 7.9 percentage points in Gujarat.

During 2001-2011, improvement in Overall literacy was 8.6 percentage points for India compared to 10.2 percentage points for Gujarat which is higher than India.

6 http://www.narendramodi.in/cm-gives-zero-defect-mantra-for-manufacturing-sector-to-shine-at-sparkle-international-2013/

The Modi Government with its Kanya Kelvani and Shala Praveshotsav programme in Mission Mode focused attention on primary education in the State for the first time. In 2000-01 the drop-out rate in Gujarat (Std 1 to 5) was a staggering 20.93. After a decade under Shri Modi led Gujarat Government, this drop-out rate stands at 2.05 in 2011-12. Enrolment has increased from 75.07% in 2003-04 to 99.25% in 2012-13

This huge success in education was due to more money being spent on education especially in building infrastructure. The performance of Gujarat is far better than the National performance which can be seen below:

o 99% of schools in Gujarat have electricity Vs 50% nationallyo 89% of schools in Gujarat have boundary walls Vs 58% nationallyo 98% of schools in Gujarat have girls toilets Vs 75% nationally

Gujarat has 33624 Government primary schools with 2.04 Lakh teachers. Gujarat government has recruited almost 1.4 lakh teachers only in Modi's time and this has improved the Pupil-Teachers ratio in primary

schools. In 2001-02 the pupil teacher ratio was 42 which has tremendously improved to 29 in 2013-14.

Universities – from 11 in 2001 to 42 in 2011, including specialised universities like Raksha Shakti, Forensic, Children University, Sports university, Indian Institute of Teachers’ education

Colleges – 442 (2001) to 1762 (2011)

Engineering & Management seats–22,535 (2001) to 123,592 (2011)

ITIs – from 275 in 2001 to 1054 in 2011, including on PPP basis

Employment

As per NSS 68th Round All India Survey on Employment and Unemployment in India, published in June 2013 , unemployment rate is least in the country in Gujarat with 7 persons(per 1000) being unemployed while the All India average was 29.

Ten years of UPA rule have seen “JOBLESS GROWTH”. The reason for this is contraction of manufacturing and disproportionate expansion of services sector. Gujarat is one state where there is constant focus on manufacturing sector which continues to contribute around 28% of the State’s GSDP as compared to manufacturing contributing around 14% to National GDP. This emphasis on manufacturing has created jobs for the youth and prevented distress in urban areas.

Health

The health budget which was Rs. 1317 Crores in 2007-08 is increased to Rs. 5554 Crores which is a four fold increase. This shows the priority of the Government. It has been taken as a big social movement.

Recently critics point out figure of non-availability of specialist doctors like gynaecologists in PHCs / CHCs etc. Gujarat is a progressive and highly urbanized state offering doctors bright possibilities of private practice. Hence doctors pay bond money and do not like to serve in rural areas. Therefore Gujarat Govt. introduced schemes like Chiranjivi and Bal Sakha by tying up services of private specialists with Govt. hospitals like PHCs etc without people paying for such services.

The State Government has introduced an 'Amrutam Scheme' (MAA) where all the BPL persons are given free treatment upto Rs. 2 lakhs for major deceases like heart, kidney and cancer.

According to the latest figures of IMR for 2012, released by Registrar General, IMR of Gujarat has declined by 33% as compared to decline of 30% for All India between 2003 and 2012. Gujarat’s IMR at 38 is lower

than the All India IMR of 42. Gujarat’s IMR has declined from 60 in 2001 to 38 in 2012.

Gujarat had a rank of 10 in 15 Bigger States in SRS 2005. This rank improved to 8th in 19 Bigger States which have been taken up in SRS 2013. Also important to note that in Gujarat IMR reduced from 69 in 1991 to 60 in 2001, but in the next 11 years decreased from 60 to 38!

Gujarat’s Maternal Mortality Ratio has shown a healthy decline from 202 in 2001 to 122 in 2010-12. Even according to the Census 2011, Gujarat is the 6th best state in the country when it comes to the Maternal Mortality Ratio.

Even the 2011 census acknowledges Gujarat’s healthy improvement in MMR and says “Andhra Pradesh, West Bengal, Gujarat and Haryana are in closer proximity to achieving the MDG target.”

Institutional deliveries have gone up from 47% to 95% in the last decade.

The Child Sex Ratio (0-6 years) of India went from 945 in 1991 to 927 in 2001 which further decreased to 914 in 2011. On the other hand the child sex ratio of Gujarat (0-6 years) decreased steeply from 928 in

1991 to 883 in 2001. But due to the efforts of the State Government this ratio was not only arrested from falling like the national trend but also improved from 883 to 890 in 2011.

To measure the impact of government policies, sex ratio at birth is an alternative indicator to child sex ratio. On this front Gujarat has fared extremely well on this front. For all-India, the sex ratio at birth was 894 in 2001 and 906 in 2011. For Gujarat, it was 837 in 2001 but achieved a tremendous rise and reached 909 in 2011.

Due to proactive governance of Gujarat Government in tackling malnutrition, the number of malnourished kids reduced from 70.69% in 2007 to 38.77% in 2011 which was much faster than national decrease and other states as well.

Land Allocation

In 1997, Vaghela government (who is now Leader of Opposition in Gujarat) allotted around 30 lakh square metres of land to Adani at Re. 1 per square metre. None of the land allotted by Modi government has been at this price.

In about 28 instances during Congress rule of 1985 to 1995, many industrial houses were allocated lands on the rate of Rs. 2/ or less. A cement company (Sanghi cement) has been allotted land by Congress government in 1993 at as low as 23 paisa per square metre. L&T was given land in 1982 by Congress Government at 74 paisa per square metre.

After Narendra Modi came to power land pricing has been significantly increased. Land was allocated at prices almost 25 times higher than the past to Adani Group. Essar was allocated land at about 300% higher rate compared to the past. L&T was charged 700 times higher than that charged by the earlier Congress governments. Reliance group was charged nearly 120 times higher rates.

Commenting on the forcible land acquisition hurting farmers in Uttar Pradesh, the Supreme Court commended the prudency of the processes followed in Gujarat. It said:

“The Land Acquisition Act has become a fraud. It seems to have been devised by people with a sick mind who had scant regard for the welfare of the common man. It is time the Act is scrapped, But there is one state from where we do not receive any such complaints. Look at Ahmedabad which is developing but there are no complaints from that place. They have the same officers of the same cadre as in the rest of the country," the court said, adding officers from other states can train under their Gujarat counterparts.”

The Gujarat Government has in place a scientific method for determining allotment price pursuant to which sales in adjoining areas in

the past five years and a technical assessment of the land is done in the first stage itself. The price is arrived at after appropriate valuation process after going through a scrupulously followed three-stage elaborate process involving the appropriate district Collector, Chief Town Planner and the State Evaluation Committee. If the valuation is above Rs 50 lakhs, it is re-checked at two other stages by two separate committees.

An extra amount of 30% was charged to industrial houses for the allocation of Gauchar land during 2001-2012, which was used for developmental works through district panchayat.

Of the total land allotted between 1985 and 1990, 94% of it was Gauchar (grazing) land. Between 1990 and 1995, 32% of it was grazing land. Since Narendra Modi has become CM, only 4.97% of the total land allocated is Grazing land.

In the cases of necessity to procure the farming land for industrial development, the state government has solved the issue with total clarity, without any pressure and prejudice through mutual understanding between the land-owners (farmers), industrial houses and then only the lands were procured. Thus, as far as the issue of land procurement is concerned, the land agreement cannot be reached till the farmers get adequate prices for his land. Thus, the question of meting out an injustice to the farmer does not arising at all.

Power Sector

While our nation faces an energy crisis today, Gujarat leads by example in terms of providing uninterrupted electricity to the last mile. Not only has Gujarat’s power sector PSUs have been turned profitable from reporting huge losses in 2001, Gujarat is also energy surplus today.

Gujarat is also one of the leaders in the country in terms of energy generation from renewable sources.

The Jyotigram Scheme has revolutionised the power scenario in Gujarat. 18,000 villages of Gujarat get 24 hour uninterrupted power supply .as a result of this scheme of the Gujarat Government