Modi's development agenda: What is the ground reality?

Gujarat has been one of India's most industrialised states for decades and its people are known for their enterprise. So, when Gujarat’s chief minister and BJP’s  prime ministerial candidate Narendra Modi is marketing his development agenda across the country, questions are  being raised on the reality of his propaganda and social development index of the state.

While his critics term his development agenda as a marketing gimmick, his supporters point out that without reality, the visible changes and winning elections would not be a possibility for him for three consecutive terms.

The talking point of  the industrial investments has been the capital inflow that Modi has been able to attract in the Vibrant Gujarat Industrial Summits organised biannually by the state government and marketed as a gala fanfare event. This showcases Gujarat and has the who’s who of industry present promising investments and vouching for the `Gujarat success story’. 

Till 2011, the total investment promised were to the tune of Rs 39.6 lakh crore.  The 2011 Summit alone generated MoUs worth Rs 20.83 trillion (one trillion is equal to Rs 100,000 crore). However, according to the Reserve Bank of India, Gujarat was fifth among the states in cumulative foreign direct investment (FDI) inflows between April 2000 and November 2012. Maharashtra, Delhi-National Capital Region, Karnataka and Tamil Nadu were ahead.

Hemant Shah, a renowned economist, points out that the numbers are unrealistic and has been marketed by Modi’s strategists to showcase his tall claims. Shah says the reality is different when compared with other states. To substantiate his argument and pooh-pooh the state government’s claims of growth, he cites the Union government’s Economic Survey 2011-12, which says the total industrial investment in India during the three years through 2009-10 was about Rs 24 trillion.

"How can one state claim to get so much investment in just one year?" he asks. The Gujarat government's Socio-Economic Review 2011-12, reveals that just above one per cent of the investments promised at the 2011 Summit have come in so far, and perhaps another 12 per cent are in the implementation stage.

In 2003, the conversion rate was 55 per cent. Shah points out that apart from these inflated figures of investments, the infant mortality rate is much higher than in rival states like Mahashtra and Tamil Nadu. While even as Modi points out skill development, Shah notes the labour force is low on skills.

Check the status

Officials of the state government, rubbishing the criticism of Shah, assert that the large investment promises in Gujarat began in 2009 especially in the education and information sector. They point out that it was too early to check on the implementation of these projects. “The earliest time to check the status should be 2014. If a large project has been signed in 2011, it should be taken into account in 2016 or 2017,’’ pointed out the official. 

Shah pointed out that one man cannot take the claim to success as Gujarat had started riding on the development agenda and industrialisation within just a decade of being formed in 1960. In the 1980s and 1990s, as India's manufacturing grew at 5.5 and 8.1 per cent, respectively, Gujarat touched 6.6 and 7 per cent.

However, those who stand by the claims of the CM point out the advantages that Gujarat has and why it draws the attention of investors across the country, adding that land is easy to acquire. “That is the reason why Tata Motors could be set up in Sanand, thus changing the land prices in and around the town”, said an official of the state government.

They pointed out that the recent buy out of land by the Gujarat Industrial Development Corporation (GIDC) directly from the farmers in Sanand has made cashless farmers, cash-rich and they are now raking in crores. And keeping the Sanand experience in the context, the government has now offered lands to other car manufacturing companies  like Maruti and Ford in other parts of Gujarat. Officials point out that most of the farmers were receiving more than what they were expecting for their lands hence they too may not mind selling their lands to industrial giants.

Officials aver that Gujarat has the advantage of having a 1,600-km coastline, and big and small-sized ports including the massive Kandla port, making trade easy. Special Economic Zones like the ones in Dahej, Kandla and Surat help in trading and adds on to infrastructural facilities for trading with the neighbouring states.

Analysts point out the advantages of being Modi say, “the credit for the power surplus goes to Modi. When he took charge of the state, the Gujarat State Electricity Board was sitting over losses of Rs 2,200 crore. Power cuts were rampant, but with steps such as negotiating power purchase agreements with private players and a crackdown on power theft turned the tables and made them profiting ventures. 

So, now most of Gujarat's 18,000 villages get electricity through his much popularised Jyotigram Yojana, a scheme launched in 2006 to provide three-phase power supply round-the-clock,’’ says political analyst Vishnu Pandya, adding that it is these steps which have ensured praise for him especially from those who want to set up shop in the state.