Gujarat elections: How has the state fared under BJP rule?
New Delhi: As campaigning for Gujarat elections reaches its peak, the so-called Gujarat model of development has come under the spotlight once again. The ruling Bharatiya Janata Party (BJP) and its supporters claim that the BJP rule has ushered in an unprecedented era of growth and prosperity in the state. Opponents and critics argue that the “Gujarat model” is a myth and that the state’s developmental outcomes have regressed during BJP rule.
Both proponents and opponents of the Gujarat model of development appear to be making exaggerated claims, shows a Mint analysis of a broad range of economic and developmental indicators. While Gujarat’s growth record appears impressive when compared to other states, this is in no way a recent phenomenon. The share of Gujarat in India’s gross domestic product (GDP) has remained largely unchanged since the 1980s irrespective of the dispensation in power. But this is also true of several other outcomes: some of Gujarat’s relatively weak social indicators predate the state’s BJP rule. Nonetheless, the critics of the Gujarat model of development are right in pointing out that the gains from growth have not been equitable in Gujarat.
To compare the performance of Gujarat under the BJP with earlier years, the analysis compares the trends for the 19 years of uninterrupted BJP rule (henceforth, the BJP era) since 1998 with the previous 18 years (since data for years before 1980 is not available for some variables)—a phase when different parties and coalitions ruled the state. To ensure comparability across time and at the same time account for broader economy-wide changes across the country, the variables have been expressed as a share of the national figures or have been normalized to account for the broader, economy-wide changes as far as possible.
Although Gujarat’s share in India’s total economic output has remained roughly stable at around 7% during the pre-BJP era as well as in the BJP era, Gujarat’s share in manufacturing output has gone up in the BJP era. In the pre-BJP era, Gujarat’s share in overall manufacturing output was nearly 10%. This has moved up to 12% in the BJP era. The old GDP series figures (available till 2013-14) have been used for these calculations to ensure consistent comparisons.
Gujarat’s employment record too is not as dismal as the opposition claims. At a time when the country has been witnessing increasing informalization of the workforce, the share of regular workers in Gujarat has been relatively stable, census data shows.
However, Gujarat’s share in factory jobs has lagged behind its share in factory output. While the latter has increased sharply since the late 1990s, Gujarat’s share in factory jobs has not changed much, data from the Annual Survey of Industries (ASI) shows.
What is more important is that wage growth of factory workers has been relatively anaemic despite Gujarat’s superior industrial performance. Although productivity of the average worker in Gujarat has outpaced the national average, wages have barely kept pace with the national average. It is worth noting that wage growth even at the national level has been relatively anaemic over the past three decades, and has lagged productivity growth. However, Gujarat’s outcomes appear weak even when normalized with respect to the national figures.
One reason why the distribution of the fruits of Gujarat’s growth might have been skewed is the concentration of growth. As a 2013 Economic and Political Weekly research paper by economists R. Nagaraj and Shruti Pandey pointed out, the gains in Gujarat’s industrial growth arose largely from a single industry: petroleum refining.
“As it is an import-dependent, capital-intensive, coast-based, export-oriented industry, its linkages with the rest of the regional economy are not likely to be very strong,” they wrote.
Another reason for the uneven distribution of growth may lie in Gujarat’s limited investments in human capital formation. While Gujarat enjoys a lead compared to the national average when it comes to the literacy rate, its lead has shrunk since the 1980s.
Gujarat’s record in bringing down the infant mortality rate since the 1980s appears slightly better, given that it has tracked the national average on this score.
However, in comparison to states with similar or slightly lower per capita outcomes, Gujarat’s health and educational outcomes appear weaker. Its nutritional outcomes place it nearly at the bottom of the league tables. Gujarat ranks 25th among 29 major states ranked according to the ratio of underweight children, data from the latest round of the National Family Health Survey (NFHS) conducted in 2015-16 shows. Its rank in the previous NFHS round, conducted in 2005-06, was just one notch higher at 24th.
The weakness in Gujarat’s social infrastructure is a pre-BJP legacy. However, the fact remains that after nearly two decades of BJP rule, Gujarat’s health and educational outcomes continue to look unimpressive.
Noting that the divergence between Gujarat’s superlative economic performance and its very ordinary social development outcomes was first pointed out by the renowned development economist Raj Krishna in 1980, Nagaraj and Pandey argued that the persistence of this divergence points to “deeper social and political factors at work, impervious to electoral competition and personal charisma of the leaders at the helm.”
- A year of hits and misses for Indian hockey
- India’s current account deficit widens to 1.2% of GDP in July-September
- Narendra Modi calls bad loans to banks by UPA regime a big scam
- Pawan Hans: Employees’ union evince interest in disinvestment
- Indian inflation spike hits bonds, spurs rate policy and fiscal worries