People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 18

May 10, 2009


The Development Record Of The Narendra Modi Government

Prabhat Patnaik

IMPORTANT BJP leaders are currently busy “selling” Narendra Modi as the future prime minister of India. The fact that this “sale” has started even before the fate of their present aspirant for the prime minister’s post has become known, suggests, not just a tacit acceptance that L K Advani is getting nowhere, but even a lack of faith in him. It is like saying in the midst of a battle, “we shall win the next time around when we have this new General”. But, how senior BJP leaders treat L K Advani is of no great moment to us. What is significant is this marketing of Modi. And it would be sheer complacence to dismiss it as inconsequential.

A view is gaining ground that Modi, even if a communal bigot, is “good for development”. The media hail him as having worked wonders on the “development front”. The bureaucracy retails anecdotes of Gujarat’s “pro-development governance”. The neo-liberal politicians scarcely utter a word against Modi’s “development” record (though it must be admitted that Sonia Gandhi and her progeny do). The Tatas laud Modi’s commitment to “development”; and when the Tatas do so, can the rest of corporate India be far behind? Even some, who would normally be counted as part of the progressive camp, profess a grudging admiration for Modi’s “development drive”. In fact so surrounded is Narendra Modi these days with the halo of a “development messiah”, that even the communal pogrom in Gujarat he presided over is being quietly forgotten. It seems almost in bad taste to dredge up such old stories about so haloed a figure.

Let us therefore take a look at Narendra Modi’s record, not on communalism which is well-known, but on “development” itself, to see whether it is indeed as impressive as is made out. Gujarat undoubtedly has been one of the faster-growing states of India during the Modi era. Given the fact that it was in per capita terms among the very richest even in the 1960s, and that it was among the faster-growing states even then, one would have thought that Narendra Modi’s “development drive”, coming on top of all this, would have made Gujarat banish poverty and hunger from within its borders. Such however is far from being the case.

According to the World Health Organisation, a working person needs a minimum of 1800 calories per person per day for sustenance. (This incidentally is much less than the “poverty line” which is 2100 calories in urban India and 2400 calories in rural India). In Gujarat in 2004-05, according to the data collected by the National Sample Survey, the proportion of rural population ingesting 1800 calories daily was as high as 41 per cent! It was way above the average for all-India which was 25 per cent.

Of course it may be thought that since Gujarat has a large tribal population, to whom the benefits of “development” percolate only slowly, its having a higher proportion of rural population than the all-India average does not signify much. But the point is that in 1993-94 Gujarat’s figure for the proportion of rural population below 1800 calories was 36 per cent, while the all-India figure was 20 per cent. The all-India figure has gone up, despite high growth; but so has Gujarat’s despite Narendra Modi’s so-called “development drive”. A “development effort” in the course of which the proportion of the rural population below the very minimum calorie norm required for a working person, actually increases, cannot by any stretch of imagination be called “successful”; on the contrary it represents the most awful retrogression for society.



Why did this happen? Since the world is not short of apologists, some would argue that people are ingesting less calories these days because they need less calories anyway, thanks to the fact that arduous manual labour is no longer being undertaken to the same extent in rural areas as before, owing to the introduction of labour-saving devices and practices. But this is an absurd argument: calorie intake is never governed by need; it is on the contrary strongly linked to the level of income, which is why we find that the per capita calorie intake is higher in rich countries, where the burden of manual labour is much less, compared to the poor countries. If calorie intake has gone down then the reason for it has to do with the fact that the people in Gujarat could not afford to buy more food than they did. This inability in turn can be a result either of rising prices of foodgrains relative to the purchasing power in the hands of the people, or of relatively shrinking purchasing power at the given prices of foodgrains. Since inflation in food prices became pronounced only in 2007-08, the decline in calorie intake during the decade we are talking about, namely 1993-04 to 2004-05, must have been a result of shrinking purchasing power in the hands of the people.

The fact of shrinking purchasing power in the hands of the people in a situation of high growth, which necessarily implies rapidly rising per capita incomes, may appear incongruous at first. But there were two reasons for this. The first one, which is most obvious, is a very sharp increase in income inequalities, especially between the urban rich and the bulk of the rural population. Neo-liberal economists, while occasionally conceding that such increases in income inequalities do accompany economic growth in the economic regime they espouse, usually argue that fiscal policy can always be relied upon to rectify such increased inequalities. The eleventh five year plan for instance had argued for a continuation of the neo-liberal economic regime on the grounds that it would produce high growth, and that even if the effects of such growth would not automatically trickle down to the poor, the fiscal policy of the government could be used to ensure better living standards all around.

But since the purchasing power in the hands of the people that we are talking about, already incorporates the effects of fiscal policy, it is obvious that fiscal policy did not nullify the effects of increased income inequalities. On the contrary, since we do know that there were sharp cutbacks in rural expenditures in the country as a whole, including in Gujarat, the role of fiscal policy was to supplement the effects of increased inequalities in curbing the purchasing power in the hands of the people.



Gujarat’s being a rich state with a high growth rate ensured that its government revenues were far from meager, but the expenditure of that revenue was in directions other than those that put purchasing power in the hands of the people, especially in rural areas. According to an estimate published in The Hindu the Gujarat government has given to the Tatas a total amount of Rs 31,000 crore (spread no doubt over a number of years) as subsidy for the Nano project. Sums of this order are not easy to come by; and it is obvious why the Tatas shifted their plant from West Bengal to Gujarat. But the fact that the government which offers a subsidy of Rs 31,000 crore to one business house has no money to spend in rural areas with which the rural population could have acquired enough purchasing power to access the bare minimum of 1800 calories per person per day, shows its ruthless class bias. The so-called Gujarat “model of development” is nothing else but the manifestation of extreme class bias; those who laud it, whether they know it or not, are lauding this class bias.

But then, it may be thought, is this not what Rahul Gandhi is saying? True, he does not talk of class bias, but he is talking about Gujarat’s development being pro-rich and anti-poor. But Rahul Gandhi, while criticising Modi, fails to see that Modi presents in the most ruthless and no-holds-barred form, the very same economic policy that their own Manmohan Singh has been pursuing. And with similar results.

True, during the decade for which figures have been quoted above, the main occupant of power at the centre was not the UPA but the NDA, but their economic policies were identical, and were characterised by an adherence to neo-liberalism. It is not surprising then that what we find in Gujarat is exactly what we find over the same period at the all-India level too. As in Gujarat, in the whole of India too the proportion of rural population below 1800 calories has been going up even in the midst of extraordinarily high GDP growth rates. As in Gujarat, in the whole of India too central government expenditure in rural areas has gone down as a proportion of GDP, reducing the availability of purchasing power with the rural population, and hence pushing them into greater hunger.

Modi, just as he is a hardline communalist, is a hardline neo-liberal. Neo-liberalism, contrary to what is often made out, does not mean a hands-off approach by the State in economic matters; it means State support, in the most blatant, explicit and ruthless form, for corporate capital and finance capital. And Modi displays this support in abundance. He represents undiluted neo-liberalism.

It is precisely for this reason that the media and the corporate world like him; and the neo-liberal coterie at the helm of economic affairs in the country under the UPA dispensation, is scrupulously silent about his development claims. They cannot criticise him without that criticism rebounding upon themselves. But this is also precisely where the danger from Modi lies. As the world economy plunges into recession, and the hegemony of finance capital comes under threat, including in our own country, finance capital in its desperation may try all kinds of manoeuvres, including pushing to the forefront a politician who happens to be hardline neo-liberal as well as a votary of divisive and communal politics: since, in a situation of high unemployment caused by crisis, the soil for communal and divisive politics gets enriched, such a politician can garner votes on the basis of a communal-fascist appeal, but for the pursuit of a neo-liberal agenda that preserves the hegemony of finance capital. The obscene accentuation of economic dichotomy that the Modi “model of development” entails must therefore be brought home to people all over the country.