People's Democracy

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


No. 50

December 16, 2012


Gujarat 2012: Rich State, Poor People


                                                                                                                                                                          Archana Prasad


GUJARAT chief minister, Narendra Modi, released the BJP’s election manifesto or a sankalp patra (a pledge to the people) for Gujarat 2012 on December 3, 2012. Recounting the achievements of the Gujarat growth story, the patra claims that Gujarat’s administration has been “admired nationally as well as internationally with more than 250 awards, at an average rate of one award every fortnight.” It also claims that in its 11 years in power, the Narendra Modi government has excelled itself by doing “all inclusive, all pervasive and all round development” in the state, thus providing a replicable model to the entire country. However, these claims need to be evaluated on the basis of hard empirical evidence that has been collected, published and analysed by a team of researchers and published in a recent book, Poverty Amidst Prosperity: Essays on the Trajectory of Gujarat (Aakar, 2012). The book uses current comparable data and shows how the Gujarat growth story has been much exaggerated and has perpetuated growing inequities within the state. Hence the evidence provided by the book needs to be counterposed with the claims and future pledges of the Gujarat BJP.




The BJP manifesto claims the growth and expansion of a neo-middle class as one of the major impacts of the Gujarat growth story. Consequently the party promises several measures to meet the aspirations of this middle class through pledges of making cheap houses, providing power, cheap loans and insurance.


However, the emergence and expansion of the middle class is dependent on the expanding income and employment opportunities and this is belied by the evidence with regard to the employment as well as the character of the economic growth within the state. In terms of the overall performance of the economy, the Gujarat growth story has been described as “unspectacular,” especially in comparison with states like Maharashtra and Tamilnadu which have similar growth rates. While the state comes first in terms of attracting investment, but it is only seventh in terms of the growth of employment. Conversely, a state like Tamilnadu ranks seventh in terms of the investments it attracts but is on the top of the rankings as far as employment is concerned.


Further, the concentration of investment in particular sectors has created unbalanced development and has had negative implications for employment. Of particular significance in this textile, petroleum and chemical sectors which constitute more than 60 per cent of the total investment and provide half the employment. Still further, the state’s record of project implementation is itself abysmal. At the time of the first vibrant Gujarat summit 73 per cent of the projects garnered were implemented, but in 2011 this proportion came down to about 13 per cent (Poverty amidst Prosperity, pp 6-7). This effectively meant that industrialists have been given cheap land and infrastructural facilities to make investments and dump their money in non-productive projects. The recent revelations on the links between the Adani Group and Narendra Modi only provide more evidence for this pattern.




Given this scenario, it is hard to explain the claims of the BJP manifesto that growth has led to the growth of a large middle class. This is exemplified by the growing inequities within the economy.


In 2009-2010, one third of the people in the state lived below the poverty line with 18 per cent of the urban and 27 per cent of the rural households being poor. Though this proportion was lower than the all-India average, these figures were not better than those of the high growth states of Tamilnadu and Haryana (Poverty amidst Prosperity, p 20).


This means that the benefits of the investment were not being transferred to the ordinary people despite the claims of overall development. The distribution of income (gauged by the per capita consumer expenditure) amongst social groups reveals another dimension of the growing inequities. The gap between the rate of change in income for the scheduled tribes and others has grown exponentially between 2005 and 2010 especially in the rural areas.


Further, in the same period income has declined for both scheduled caste and tribes in the urban areas. For both these social groups the head count of poor people has also increased at a higher rate than for other social groups (Poverty amidst Prosperity, pp 22-23). These inequities manifest themselves in the poor educational and health status of the state.



In its pledge, the BJP has given primacy to youth and education. It announces that it has achieved 100 per cent enrolment in primary school and reduced the dropout rate to two per cent. These claims are belied by the data collected through the 52nd (2000-2001) and 64th (2007-2008) NSSO rounds of survey, which show that the overall educational ranking of Gujarat fell from 21 to 26 amongst all states in this period for children going to school at the primary level. At the level of all youth and children attending any educational institution from the ages of 6-29, the ranking of Gujarat declined from 9 to 14 amongst 15 states with which it was compared (Poverty amidst Prosperity, p 182 and Table 9.2, p 269).


This abysmal condition is further exemplified by the fact that the school going children between 5-14 years constitute 85.5 per cent of all school-going children, a proportion lower than that of states like Tamilnadu, Maharashtra and other states with similar growth rates. Only 31.6 per cent of all school-going children between the ages of 15-20 attended secondary and high school in 2007-2008 (Poverty amidst Prosperity, Table 9.14, p 272).


At the same time, almost a third of the children in Gujarat had no formal education whatsoever and only 13.5 per cent of the children had secondary or high school education and 2.6 per cent of the youth were college-going as compared to the all-India figure of 4.2 per cent in 2007-2008 (Poverty amidst Prosperity, Table 9.15, p 272). These figures clearly show that the claims made by the Gujarat BJP are inflated and untrue.


This abysmal situation in this crucial social structure is to be seen in the context of the declining state expenditure in education within the state. In 2007-08, where as the Gujarat government’s per head expenditure in rural areas was Rs 984, the expenditure of private aided institutions Rs 3509 and private unaided institutions was Rs 5015 per head. This gap between public and private institutions is also reflected in the urban areas where the per head government expenditure on education was Rs 2815 and by private aided and unaided institutions was Rs 7509 and Rs 8037 respectively. In both (the urban and the rural) cases, the per head government expenditure in Gujarat has been much less than the average all-India expenditure whereas the expenditure by private unaided schools in rural areas is higher than the all-India expenditure by the same agencies. The level of per head educational expenditure by private aided institutions in rural and urban areas and by unaided institutions in urban areas is comparable to the all-India spending in 2007-2008 (Poverty amidst Prosperity, Table 9.20, p 274). This indicates that the level of privatisation of education in Gujarat was higher than that of the rest of India and this is reflected in the low and unsatisfactory indicators in the education sector. A cursory look at the future educational agenda of the Gujarat BJP as revealed in the manifesto also shows that this trend is unlikely to change as most of its promises are about providing scholarships to students attending private schools rather than basic educational infrastructure.



The BJP manifesto claims that it will provide decentralised health services to all. It also makes a step towards a greater privatisation of medical education by promising the setting up of government self-financing medical colleges in each tribal district, and providing monetary assistance to students in these self-financing colleges.


This focus is in line with the current role of the state government in the health sector where the total health expenditure in Gujarat decreased from 4.25 per cent of the total budget in 1990-95 to 0.77 per cent of the total budget in 2005-2010. In the period between 2005-2010, Gujarat was ranked fourth from below as far as its health status is concerned (Poverty amidst Prosperity, pp 208-10). The Human Development Report 2011 also highlighted Gujarat as one of the states where about half its children were malnutritioned, and the rate of decline of the infantile mortality in the state was lower than that of other states with similar growth rates. Even here the scheduled castes and scheduled tribes showed a higher mortality rate as compared to the national average and the mortality of girl children is also higher than that of male children (Poverty amidst Prosperity, pp 204-05).


This clearly shows that the disparities that exist within the economy have affected the access of ordinary people to social infrastructure. This is especially so since the Gujarat model of development is largely relying on private capital for the growth of these sectors.


Seen in this context, the BJP’s sankalp patra is nothing but an eyewash and seeks to hide the failure of the Modi government on many developmental fronts. Though the BJP may claim that Modi is a model chief minister who has brought the politics of development to Gujarat, evidence based studies show that the pace of progress of the state slowed down during the eleven years of the BJP rule. Further, the hollow slogans of inclusive development are nothing but a way of attaining the hegemony of Hindutva forces as well as corporate capitalism, both of which strengthen each other within this state. As the state goes to the polls, the people of Gujarat would do well to remember these facts and defeat their current non-performing and tyrannical chief minister.