Does Narendra Modi actually have a great Gujarat model, or just wellpackaged hype? Critics say that Gujarat has grown fast, but some others have grown faster. Gujarat is the best state in pendency of corruption cases, and in the proportion of non-violent crime. It is close to the top in completion of police investigations. It scores poorly in judicial vacancies and recovery of stolen property. Its quality of government spending is high: it has the lowest ratio of administrative GDP to total GDP. Spending is focused on infrastructure rather than staff. Modi’s repeated state election victories show that his approach produces high voter satisfaction. Gujarat is not a classical free-market state. It has large, expanding public sector companies, and substantial taxes on capital and commodities. It has many subsidies, though fewer than in other states. Still, business thrives in its business-friendly climate. One businessman told me that in Tamil Nadu, it took six months and several visits (and payments) to ministries for industrial approval. But in Gujarat, the ministry concerned called him the day before his appointment, asking for details of his proposal. Next day, he found the bureaucracy had in advance prepared plans of possible locations for his project, and settled the matter on the spot. This was unthinkable elsewhere, and showed both efficiency and honesty. Corruption has not disappeared in Gujarat, but is muted. Modi’s Jyotigram scheme provides 24/7 electricity for rural households, plus reliable power at fixed times for tubewells. This explains why Gujarat has India’s fastest agricultural growth (10%/year for a decade, say economists Gulati and Shah). Indian agriculture is crippled by regulations, but Gulati shows that Gujarat has the highest agricultural freedom among states. Modi charges farmers for power, and so all his three state power companies are profitable. By contrast, power companies in other states with free rural power have accumulated losses of almost Rs 200,000 crore. Critics accuse him of giving cheap land to favoured industrialists. But state and national governments the world over use such sops to attract industries. Unlike most politicians, Modi has clearly not enriched himself. Read full article --> bit.ly/1jBpopk
Posted on: Sun, 13 Apr 2014 05:19:03 +0000
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