The famed 'Gujarat model' is back on the discussion table.
It remains important for Prime Minister Narendra Modi and is his trump card in the crucial Assembly elections in his home state. After all, it was the apparent success of this model that acted as a launchpad for Modi and elevated him to the national scene in the summer of 2014. Modi’s years as the chief minister of the industry-heavy state are closely linked to the evolution of the term itself.
Modi is tasked with selling the model in the poll-bound state for the simple reason that there are hardly any alternatives on the table for his party to rely on as its savior in the tough battleground. Hence, it wouldn’t be surprising if Modi switched on the old 'Narendra Bhai' avatar in the next few days and invoke his golden days as chief minister, hoping to convert those fond memories into votes this time around.
That strategy would make immense sense for the BJP, because Modi the prime minister — the originator of the contentious demonetisation plan and the anchor of a hastily-implemented Goods and Services Tax (GST) regime — is certainly a less desirable man to his fellow Gujaratis than Modi the chief minister, known for his administrative skills. He has been tasked with the job of averting a major embarrassment to his party in the ensuing polls. Even a sharp drop in the victory margin will be very unwelcome for the BJP. Also, Modi needs to safeguard his invincible image ahead of the 2019 Lok Sabha election.
Things have changed in Gujarat. What was initially thought to be a cakewalk for Modi and the BJP has turned into a tough fight. This is also partly due to the repackaging of Congress vice-president Rahul Gandhi — who was initially thought to be a lightweight by his political rivals. Rahul has undoubtedly begun to find an alignment with the public mood on the ground.
So, it is Rahul versus Modi in Gujarat, with state-level leaders playing a very small role.
Will Modi, once again, manage to sell the 'Gujarat model' story to the vote bank to overcome some negative factors (unemployment/rural distress)? Before attempting to find an answer, let’s look at what the 'Gujarat model' did for the state. To understand the picture, let’s look at a few numbers.
On a host of economic indicators such as per capita state domestic product or gross state domestic product (GSDP), Gujarat is among the top states in the country. Economic indicators look good — according to data on the NITI Aayog website, Gujarat recorded a growth of 16.26 percent in 2013-14 (as per 2004-05 series). If you look at state-wise per capita availability of power, Gujarat once again excels (1,714.7 kilowatt-hour in 2015-16), ahead of Madhya Pradesh and Maharashtra. The state’s gross fiscal deficit is comparable to other large states (Rs 246.1 billion in 2016-17); again it is not far behind when it comes to capital expenditure (Rs 367.6 billion). Similarly, if one looks at the number of factories set up, Gujarat is one of the top states with 23,433 units in 2014-15 — only behind Tamil Nadu and Maharashtra.
So, on these parameters one can safely assume that whatever the so-called Gujarat model worked well for the state.
But social indicators lag. The Gujarat model has certainly benefitted the industries, but has this improvement in the economic indicators translated into growth at the bottom of the pyramid? Let’s find out.
When it comes to social sector expenditure, Gujarat (Rs 619.6 billion in 2016-17) lags far behind Maharashtra (Rs 1,226 billion), Tamil Nadu (Rs 743.3 billion) and Uttar Pradesh (Rs 1,412.9 billion). Its literacy rate is 78 percent, behind other comparable large states; the poverty rate continues to be one of the highest (16.63 million) among the heavily industrialised states and infant mortality rate too remains high (33) compared with states like Maharashtra (21) and Tamil Nadu (19).
But, the most critical indicator one should look at is the total employment data of state-wise medium and small scale industries. Here, Gujarat (47.73 lakh) lags far behind states like Tamil Nadu (80.98 lakh), Uttar Pradesh (92.36 lakh), West Bengal (85.78 lakh), Maharashtra (70.04 lakhs), Andhra Pradesh (70.69 lakh) and Kerala (49.62 lakh). This means while a large number of companies have been set up, not enough jobs have been created by the state.
On the whole, it is quite clear that while Gujarat has advanced or stays among the top states on certain economic indicators, it has lagged behind when it comes to important social indicators, raising serious questions on the much-hyped success of the model and its actual benefit to the poor in the state. In simple words, the Gujarat model has, so far, failed to make an impact on the lives of poor people in Gujarat as indicated by the not-so-impressive performance of social sector indicators and employment generation trend in proportion with the increase in the number of companies.
So, if one looks at Gujarat economy in this backdrop, there is no big surprise in the protests over job reservations and rural distress. It is needless to probe the deep unhappiness among the Patidars and other socially/economically backward communities with respect to the lack of availability of jobs and access to education facilities.
The fall in social indicators show rising social inequality and this is why Rahul’s standard accusation against Modi in Gujarat — that only industries benefitted from the state GDP growth and not the poor — resonates well with the people on the ground.
That takes us back to the original question: Can Modi once again sell the 'Gujarat model' to Gujaratis to win this round of elections? Traditionally, there isn’t much of a relationship between economic growth and poll results. People don’t take notice of details. They often fall for promises and personality politics. Hence, the BJP may still win the Gujarat elections all while singing the same tune. One needs to wait and watch. But one thing is for sure: As Modi kicks off the last leg of his election campaign in Gujarat, he has a gigantic task ahead to save his party’s fortunes.
Updated Date: Nov 27, 2017 15:03 PM