Gujarat is less than developed as a state on the development ranking. The committee headed by RBI governor arrived at this conclusion by creating an index that used measures such as per capita consumption and poverty ratio. The index ranges from zero to one, with one being the most backward and zero the least backward or the ‘relatively developed’, according to the committee. It has ranked Goa and Kerala as the most advanced states, Odisha and Bihar the least and Gujarat in the ‘less developed’ category. This puts Modi’s Gujarat ‘development model’ in the spotlight once again. Is the latest report a testimony to the impression that Gujarat is great for big business and not doing enough to truly develop different constituencies of people across class categories? India Inc is often spotted praising Modi’s model, but all that they look for is swift decision making. Modi wins praise for cutting red tape and making government more responsive and predictable, calling them the ingredients for ‘growth’. Gujarat for long has been considered business friendly. In the seven years through March 2011, according to Reuters, Gujarat’s economy grew an annual 10.08 percent at constant prices, against 6.45 percent in the eight years through March 2002 (Modi took office in October 2001), which was still ahead of the all-India average of 6.16 percent. A handful of states, including Maharashtra and Tamil Nadu, clocked bigger gains over the same recent period. But then at the centre of this report lies a debate around what is the right measure to indicate level of development. The report, by using consumption expenditure as a measure as opposed to state domestic product or per capita income, has managed to displace the Gujarat growth story from the top mantle for now. If one takes into account the dissent note in the report by one of the members, it does indicate that the Rajan report may not have done complete justice to many states – whether they are developed or under developed. But for now questions will surely be raised on why Modi continues to harp on the Gujarat story so much? Can the garb of capitalism capture the true story of a Gujarat that’s not so ‘vibrant’? What about the tribal areas? Are small businesses also as happy with the quick decision making as big businesses make it out to be? So while Mr Modi’s well-oiled back office will want to highlight the phenomenal incremental growth in most of the economic and social well-being indicators, the question remains why it is still not at the top of the development index. Has Gujarat developed inclusively or is it just crowning capitalism? And what that growth really means for the state if its people are not able to turn that into higher consumption and if their social indicators cannot be improved? One can question whether the setting up of the committee was politically motivated with an eye to boost Nitish Kumar’s Bihar. The report has been put out to improve the efficiency of the outgo of the Centre to states based on their development need. As regards the allocation of funds, the report suggested that each state should get a basic fixed allocation and an additional allocation depending on its development needs and performance. In spirit there is nothing inaccurate in the report, but it’s content having been questioned already by one of its members, there will clearly be a mood of discontent from states who need more and those who feel they have been placed unfairly on the development index.
Posted on: Mon, 17 Mar 2014 15:36:46 +0000
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