What works and what doesnt in Narendra Modis Gujarat One tcf of natural gas is enough to heat 15 million homes for a year, generate 100 billion kilowatt-hours of electricity, or fuel 12 million natural-gas-fired vehicles for a year. Modi gave it a different spin. With the pomp that was already his signature, Modi said farmers would see oil pouring out of taps. He also said in subsequent public speeches that farmers would now be selling packets of petrol and diesel instead of milk, recalled an analyst who was present. Cut to the present day, those statements are recounted with chuckles or guffaws. No sooner did Modi make his grand announcement than doubts began to surface. VK Sibal, the then director general of hydrocarbons, the oil and gas sector regulator, said the discovery of 20 tcf appears to be a tall claim based on the result of one (oil) well. Closer home, GSPCs technical partner GeoGlobal Resources said it was premature to quantify the gas reserves. Yet, Modi stood by his claims until most of 2007. Turns out the sceptics were right. In truth, GSPC found no more than 2 tcf. But Modi and his administrators now treat the claims as an unfortunate episode that must be quickly forgotten, as they have with every development that runs counter to the Gujarat growth story. Growth Story There is little to suggest that Modi has learnt lessons from the GSPC affair. To this day, he is as eager as ever to collect superlatives for his rule. An oft-repeated claim is the spectacular economic growth in Gujarat under his watch. Agriculture in Gujarat has grown more than 9% in the past five years, the highest in India. Every village in Gujarat is self-sufficient in drinking water thanks to taking the waters of the Narmada river to every nook and corner of the state. Gujarat is the No. 1 in providing jobs. The most retold accomplishment, if it can be called that, is investments worth Rs 39.6 lakh crore promised in the five Vibrant Gujarat summits, Modis showpiece meeting of global investors. Modi has reeled out these headline figures time and again. He also leaves no one in doubt about his starring role in these feats. His website is packed with reports such as: Narendra Modi holds online grievance programme and CM gives necessary directives to the district functionaries for satisfactory solution of peoples problems. Each of these seemingly impressive exploits appear lacklustre under scrutiny. Experts and independent observers say it is wrong to identify Gujarats development with Modis rule alone. Dwijendra Tripathi, an economic historian who taught at the Indian Institute of Management, Ahmedabad for three decades, says Gujarat has historically enjoyed a locational advantage due to its 1,600 km coastline. Its soil is also good for cash crops. Complementing these factors is the famed entrepreneurial zeal of the Gujarati. Entrepreneurship, trade and business are in the blood of every Gujarati, says the head of a brokerage in Ahmedabad. But this aspect is omitted when talking about Gujarat these days. Indeed, the Gujaratis affinity for trading and business is legendary. While other states were taking baby steps in industrialisation, Gujarat was about to take the next big leap. Surat was among the first big ports in India and Ahmedabad was the first city to commission a textile mill after Mumbai in the pre-independent era, says Tripathi. The people of Gujarat are also known for their support for development. Sebastian Morris of IIM Ahmedabad says industrial growth in Gujarat has taken place in capital-intensive and labour-intensive industries where the usual considerations of safety and environment have been kept to a manageable level. Economist Yoginder K Alagh, chairman of Institute of Rural Management Anand, says Gujarat has always been an open society with a penchant for global ideas and experience. He says the state has grown fast in the last three decades and will continue to do so. Morris agrees. When it comes to Gujarat, the first thing to recognise is even in the past, the state has had higher growth than the rest of the country, particularly in manufacturing. (see The Numbers Tell the Story). What happened after economic reforms is that other states were able to catch up. Not Miraculous Morris says Gujarats growth is undoubtedly quite good, but not miraculous. Other states may have even exceeded Gujarat in certain sectors, according to him. The latest data of the ministry of statistics under the central government supports this argument. Bihar, Delhi and Puducherry are the fastest growing states in the country and Gujarat found no place in the top five for the second successive year, according to the data. Other headline figures too appear tame on closer look. According to Morris and Alagh, to peg the agricultural growth at 9% is incorrect. In separate studies, they have concluded that average growth in the sector since 2005-06 has been around 3-5%. The difference in the two estimates alone would give reason to pause. There are two statistical sins here, according to Alagh, which he says are unforgivable. One is to take bad initial and good terminal years. And growth has been calculated accounting for current prices because that includes inflation. Both economists prick holes in the claims of the governments contribution to the agricultural progress. Irrigation coverage is still low, says Alagh. According to Morris, the main reasons for the agricultural revival are two-fold. Gujarat has benefited from a major shift in rainfall in the past 10 years. He says the Sardar Sarovar Dam project across the Narmada has helped farmers in the state. But there would be a bigger impact if the canals were finished — they are nowhere near completion. The output [in agriculture] we see is because of water being stolen... pumped through plastic pumps.
Posted on: Sat, 09 Nov 2013 10:01:07 +0000
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