PSEUDO GUJARAT

In the colourful world of media imagination, fed by economistsand columnists, Gujarat have recorded an extraordinary economic performance in the past decade. But a careful analysis shows that Gujarat, always one of the richest states, has done no better than before. In neither industry nor agriculture has its position radically changed. The only dramatic difference has been the emergence of import-dependent and export-oriented petroleum refining, which has few linkages with the state economy. As in the past decades, Gujarat’s social development continues to lag behind its economic development.

Pseudo Gujarat...!!

Gujarat is among the richest states in the country. It contains only 4.9% of the population (2011) but contributes to 7.9% of the total domestic output of all states.Gujarat is highly urbanised with 42.6% of its people living in towns and cities while national average is 31.2%.Gujarat have drawn considerable attention for their supposedly outstanding economic per formance, which is credited to the good governance of their political leadership. So because of Gujarat’s eco nomc standing,some believe that on this count Chief Minister Narendra Modi has demonstrated an ability to be a candidate for the prime minister’s post in nextyear’s general elections.

Table 1 ranks the states by per capita income at constant prices from 1993-94 to 2011-12. For most years, Gujarat’s rank has remained at 8th or 9th, though it slipped a few notches during the first half of the previous decade.

Table 1:        Ranking of the States by Per Capita Income at Constant Prices

Year             Gujarat

1993-94         9 

1994-95         8 

1995-96         7 

1996-97         8 

1997-98         8 

1998-99         6 

1999-2000      10 

2000-01         12 

2001-02         12 

2002-03         11 

2003-04         10 

2004-05          9

2005-06          8 

2006-07          8 

2007-08          8

2008-09          8

2009-10          9

2010-11          9

2011-12          9 

Performance of Agriculture

The growth of agricultural output in Gujarat is said to have accelerated in the last decade on account of efficient groundwater usage and the diffusion of Bt cotton(Shah et al 2009). Indeed, we find that between 2001-02 and 2011-12, Gujarat’s share in agriculture GSDP of all states went up from around 5% to 7%. However, if one takes a longer time horizon from1993-94, then the observed surge in Gujarat’s agriculture in the last decade merely represents a recovery of the lost ground of the 1990s.

Gujarat’s Industrial Performance

Gujarat is known to be an industrialised state with industry (mining, manufacturing,
electricity, gas and water andconstruction) constituting 37% of its GSDP in 2011-12 (compared to 27.5% for India). It is also know to be an entrepreneurial and industry-friendly state. Has its performance improved during the last decade, as many believe? Table 2 shows that for most years the state held the 2nd rank in GSDP in total manu facturing since 1993-94 (after). But, its share in GSDP of total manu facturing of all the states has steadily gone up from about 11% in 1993-94 to 14% in 2011-12. rise is sharper in registered manufacturing – that is, in factories employing 10 or more workers using power or 20 or more workers without using power – from about 11% to 16%.

However, on a closer look, the incremental manufacturing output is mostly coming from a single industry – petroleum refining – whose share in gross value added in the state’s registered manufacturing has risen from 4% in 2000-01 to nearly 25% a decade later (Table 3).This is on account of output from just two refineries – the shore-based refineries Reliance and Essar in Jamnagar.In other words, excluding petroleum refining, the contribution of the rest of manufacturing industries in the state actually declined. Pending a deeper inquiry, it seems reasonable to infer that Gujarat’s industrial lead is mainly on account of 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.

Table 2: Gujarat’s Rank in GSDP in Manufacturing at Constant Prices (1993-94 to 2011-12)
Year     Gujarat's Rank
1993-94       3
1994-95       3
1995-96       2
1996-97       2
1997-98       2
1998-99       2
1999-2000    2
2000-01       3
2001-02       2
2002-03       2
2003-04       2
2004-05       2
2005-06       2
2006-07       2
2007-08       2
2008-09       2
2009-10       2
2010-11       2

2011-12       2

Table 3: Petroleum Industry in Gujarat (1998-99 to 2009-10)Year Petroleum Industry’s Share in Gross Value Added in Registered Manufacturing Industries at Current Prices
1998-99      6.5
1999-2000   5.8
2000-01      4.0
2001-02     16.0
2002-03     24.4
2003-04     25.0
2004-05     26.7
2005-06     32.2
2006-07     25.9

Social Development

As a measure of social development, we have computed the physical quality of
life index (PQLI) – a simple average of the literacy rate, infant mortality and
life expectancy at age 1 – for India and for the two states from 1981 to 2011. To
identify the position of the states in relation to the national average, an
indexed value of PQLI is reported in Table 4. It shows that Gujarat has all
along maintained a marginally better status than the national average. Gujarat
ranked 7th among 17 major states of India in 2001 as well as in 2011 (Table 5).
In other words, Gujarat has not improved its position in social development relative to other states. it is also to be remembered that the position of kerala in realation to social development. Kerala has been standing for first since 2001.this implies that it is better to adopt kerala model of development rather than pro corporate Gujarat model.

Table 4: Index of PQLI for Gujarat
1981     1991      2001      2011
103.4    109.9   105.6      104.3

Table 5: PQLI Ranking of the Major States
in 2001 and 2011
States               PQLI Ranking in
                           2001         2011
1 Andhra Pradesh    11             11
2 Assam                  14             15
3 Bihar                   13              13
4 Gujarat                7                 7
5 Haryana                8               10
6 Himachal Pradesh   2                4
7 Jammu & Kashmir  10               9
8 Karnataka               9               8
9 Kerala                    1               1
10 Madhya Pradesh    15            17
11 Maharashtra           3              2
12 Odisha                 16            14
13 Punjab                 4                5
14 Rajasthan              12            12
15 Tamil Nadu            5               3
16 Uttar Pradesh         17           16

17 West Bengal            6             6

The fact that Gujarat had a low PQLI illustrates a general point. Economic backwardness is generally associated with a low level of social services development, but it is possible for particular regions to be economically better off and socially backward, or versa. Gujarat has a high industrial development status but remains backward in social service development.50)

conclusion

GUJARAT impies a pseudo model of development.It has been found that there has been no change in gujarats national ranking. Gujarat has remained roughly the ninth richest state. Its manufacturing sector is the second largest (after Maharashtra), though its share in national manufacturing value added has steadily gone up in the last two decades.

However, the incremental output has come mainly from export-oriented petroleum refi ning, accounting now for about a quarter of gross value added in registered manufacturing. This implies that the contribution of the other industries to Gujarat’s industrial output has declined. Its position in social development is only marginally better than the national average, ranking seventh in PQLI among the major states in 2001 and 2011. Contrary to popular and political perceptions, in none of the indicators has there been a measurable improvement in Gujarat in the last decade relative to the national average.

Bibilography- Mathrubhumi weekly, EPW, booklet of CPI(M),Economic times.

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