The famous ‘Gujarat Model’ development has been a topic for debate ever since the term was coined in the second half of last decade. While economist Jagdish Bhagwati strongly endorsed the model, Nobel laureate Amartya Sen strongly criticised it and pointed out its basic flaws and has strongly articulated a model which pushes inclusive growth.
Historically, as a state, which was more into trade and commerce because of its geography and arid climate, Gujarat had better growth rate compared to other states, except for a brief period of four years from 1998.
Towards the end of this period, Mr Modi took over as the CM of the state and within two years came the first Vibrant Gujarat Summit.
As per the latest reports, in all the eight editions put together, the Gujarat government has declared that it has signed 51,378 memorandums of understanding (MOU) since the first summit in 2003, worth a whopping Rs84 lakh crore. The government in initial years used to publish the data, but of late no such efforts are made and mere statements are given.
It will be apt to remember, the GDP of India currently stands at nearly Rs170 lakh crore. The government claims, 57% of these signed MOUs are either implemented or under implementation. We have no option but to believe this claim as no concrete data is available in any of the Gujarat government websites including www.vibrantgujarat.com. But they forgot to remove the data from one place, the website of the Commissionerate of Industries, government of Gujarat
. It gives an honest picture by putting out the actual data. From 1 January 1983 to 30 September 2016, a total of 6,251 projects were implemented in Gujarat with a cumulative investment of Rs2.76 lakh crore. It generated 10.67 lakh jobs. Further, it states, another 4,033 projects are under implementation with a total investment of Rs951,980 crore, which is projected to generate another 9.30 lakh jobs. Note the stark difference in the generation of employment. In the already implemented projects, every one crore rupees invested generated approximately four jobs whereas the projects under implementation will generate less than one job for every one crore rupees invested!
Let us check then how come the Gujarat government is projecting so many MOUs and letters of intent (LOI), which is in stark contrast with the actual figures? This is a very interesting story.
Let us go back to www.vibrantgujarat.com
and check the tab, which says approved projects. Approved projects are those, which have signed LOIs and MOUs committing to start a new business in Gujarat with fresh investments. Once opened, a lot of different heads can be seen like urban development, road and railways, etc. Just for a fact check, open the road and railway tab and you will see a lot of construction companies' names with address. I checked one particular company.
Out of curiosity, I went to www.zaubacorp.com
to check the details of this particular company, which turned out to be a new one (three years old), formed as a subsidiary of an infrastructure development group with a paid up and share capital of Rs5 lakh each. I was wondering what kind of investments a company with such small paid up capital will make in roads and railways. Then this name caught my attention - NHAI. Wow!
NHAI signed an MOU with the Gujarat government! That was the eureka moment. Just visit www.nhai.org and check "establishment" and "vision" to get a clear idea.
National Highway Authority of India-NHAI is the nodal agency, which takes care of the development and maintenance of National Highways. There are two things to be noticed here - a) National Highways are a central government subject under Ministry of Road Transport & Highways and b) NHAI never invests directly in any project. NHAI, once it identifies the area for either re-development or new construction, auctions the project and invites tenders. Technically and financially qualified bidders will get the contract for the construction.
Then how come NHAI signed an MOU with the Gujarat government to invest in the state? The answer is that NHAI is not investing anything. Technically and financially sound engineering construction companies who already won the contract from NHAI after bidding will offload their big projects to small companies like the one mentioned earlier. NHAI gives funds to start a project, called mobilisation advance. With that the sub-contractor starts the work and submits his bills monthly and claim the dues in a stipulated time till the project is finished. In a nutshell, what the Gujarat government is projecting as investment generated through its much hyped Vibrant Gujarat Summit is a central government funded highway development project, which has nothing to do with either Gujarat government or the Summit.
To clarify the unusually high number of MOUs, let us check one more head - Urban Development. Check the name and details of the companies mentioned. After checking more than 37 companies mentioned and speaking to 14 companies over phone, we can say these are small-time builders who have been asked by officials to sign up MOUs for the small-scale housing or commercial buildings they are developing in their respective localities. One gentleman, requesting anonymity, said almost all the builders in Ahmedabad signed up MOUs, irrespective of the size of the company. And whether they sign up these MOUs or not, that is the business they are into since years!
The state government says all investments came to Gujarat through foreign direct investment (FDI) route. That is what Mr Modi claimed as Gujarat CM, “Gujarat is the growth engine of India, which attracts maximum FDI.”
Let us check that now. The Reserve Bank of India (RBI) and central government data clarify that Gujarat is far behind, in a distant fifth position, much behind Maharashtra, Haryana, Tamil Nadu and Karnataka. This link (http://dipp.nic.in/sites/default/files/india_FDI_June2015_0.pdf
) will show the actual amount Gujarat received in 15 years, starting 1 April 2000. Gujarat attracted less than one sixth of FDI than Maharashtra. Let us not forget, in these 15 years, Mr Modi was Gujarat CM for 13 years.
In case of GDP, with Rs10.94 lakh crore, forget other states, Gujarat is even behind UP.
Gujarat's public debt has grown nearly 3.6 times since 2006 and almost five times since 2001. The State is paying Rs44.15 crore per day as interest on outstanding debt, which is again public money. The latest available data on this is the Government budget document. The total interest outflow (http://financedepartment.gujarat.gov.in/Documents/Bud-Eng_716_2017-2-23_167.pdf
) and the interest Gujarat is paying on its debt is one of the highest in the country. Interest payment on public debt as percentage of revenue receipt stands at 14.32% on 2016-17. And total liabilities stands at Rs2.43 lakh crore as on 31 March 2017.
Mr Modi had a dream to clean up India when he became Prime Minister. A state in which he was the Chief Minister for more than 13 years stands at 21st place in the country when it comes to in-house latrine facility. Small and poor North Eastern states are much ahead of Mr Modi's home state. Interestingly, all the states where Bharatiya Janata Party (BJP) was in in power for long are lagging much behind. And the states where BJP was in power at some point of time is the worst in this count.
The same report shows that the state has just 8.8% of population owning a computer or laptop and Gujarat stands at 19th position in the country in this parameter. And the same state stands at 13th place in the number of households, which uses computers or laptops with internet connection. In mobile and fixed line, Gujarat is at 20th place. Fifteen states are ahead of Gujarat when it comes to families owning a car. If one counts the number of families who owns all of the things mentioned here, 18 other states are richer than Gujarat.
Developed Gujarat stands at 16th place when it comes to electricity as the primary source of lighting in households. Remember, the three biggest corporate houses have put up massive power plants in the state for which Mr Modi gave them the land at such a price that was never heard of before, besides other tax soaps.
Literacy rate? A proud 17th place in overall literacy rate (Population of 7-plus age group). And the amazing fact is that in his first 10 years as Chief Minister, Mr Modi managed to bring down the overall literacy rate from 79.31% to 69.14%. About 87% of the male population was literate in 2001. It came down to 79.66%. And females? It fell from 70.73% to 57.8%. A good 12.75% reduction. (http://niti.gov.in/content/literacy-rate-7years
In the case of female children, Gujarat is a bit better than Chhattisgarh and Jharkhand, at 10th place, but below West Bengal.
Infant Mortality Rate is a very important parameter in HDI ranking. As per the last data available (2013) Gujarat stands at 9th with 36 out of 1,000 live birth. West Bengal Stands at 6th with 31 while Kerala tops the chart with 12. If we divide same parameter gender wise, state has the ratio of 35 and 37 for male and female infants respectively. All India ranking is nine for both category. (http://niti.gov.in/content/infant-mortality-rate-imr-1000-live-births
In sex ratio -- number of females per 1,000 males -- Gujarat had a marginal improvement in 10 years, from 2001-2011, though it is still one of the worst performing states. Overall numbers improved from 918 to 920. That puts the state at 19th position out of 28.
Health was a totally neglected sector by Gujarat government under Mr Modi. He never thought of spending money to improve the sector. In fact, Gujarat's allocation for health came down from 4.25% on 1995-00 to 0.77% in 2005-10. (http://wcd.nic.in/sites/default/files/RHS_1.pdf
The latest report suggests that Gujarat has severe manpower shortage in government-run rural health systems, whether it is normal physicians or gynaecologists or any other specialised doctors. The same goes with nurses and trained midwives. For example, total specialists needed is 1,280. Out of these, 1206 positions are vacant. Look at any health related parameters in Gujarat and it is one of the worst in the country. (https://data.gov.in/catalog/rural-health-statistics-india-2011
Some 44.6% children under 5 are suffering from malnutrition. And 54.9% female population between 15 to 49 years and 40% children under 5 are underweight. 70% are anaemic. Just because the current PM was the CM of the state for 13 years and still Gujarat is at the bottom of the table in these parameters, as per various newspaper reports, government did not publish the data from Gujarat. Select any district of Gujarat once unopened the link and Check to verify yourself. You will see no data at all. (http://niti.gov.in/file/675/download?token=-cWumkeD
But we have other sources which shares the actual data of the government. This link
will open the latest National Health Survey report of Ministry of Health & Family welfare and gives a clear picture. Immunisation is another area Gujarat is far behind and is one of the states in the mid bottom level of the table.
Gujarat pays the third lowest wage for agricultural labourers in India. Compare that with what Kerala pays for the same work. For industrial workers
(Ravi Nair can be contacted on twitter @t_d_h_nair)