Monday 24 March 2014

Gujarat Model - More myth than reality

Here is a list of 13 claims made by Gujrat govt. to substantiate the so-called Gujrat Model of development.  All of them are almost totally false.

CLAIM #1
Gujarat’s GDP growth under Modi is exceptional.
Fact: Plain lie.
It’s pure propaganda that Gujarat’s growth is exceptional under Modi. Not only Gujarat was one of most industrialized state of India in the past, but also Gujarat’s growth almost always surpassed that of India. Nevertheless, the recent GDP growth numbers of Gujarat are in line with other industrialized states of India like Maharashtra and Tamil Nadu.
Gujarat had an extremely poor growth during 1997-2001 and even a 5 percent fall in 2001 (negative growth). Thereon, the growth numbers look better, but that’s only a temporary recovery, that’s why after 2005, Gujarat’s GDP growth is in line with other industrialized states of India like Maharashtra and Tamil Nadu. Modi was made CM in 2001. However, if you compare Gujarat GDP growth pre-1999 to post 2005, Gujarat GDP growth looks to have slowed down a bit compared to the rest of India.





References: Page 6, State Domestic Product 2009-10, Gujarat State, The Directorate of Economics & Statistics, Government of Gujarat.
Page 142, Real Growth Rates of States GSDP % at Constant Prices, Data for use of Deputy Chairman, Planning Commission, 03 May 2013.
Prior to Modi’s CMship, Gujarat’s GDP
Taking the “progressive” states in India to be Maharashtra, Tamil Nadu , Andhra Pradesh, Gujarat, Delhi and Haryana. Reference: Page 144, GSDP at Constant Prices, Data for use of Deputy Chairman, Planning Commission, 03 May 2013.
The GDP shares of these 6 states relative to each other is almost constant from 2004-05 to 2011-12. If Gujarat is doing well, so have been the other “progressive” states.



In absolute GDP addition (2005-2012), Gujarat is way behind, Maharashtra.



In below graph, State GDP as percentage of India GDP, Gujarat, a performing state, had an extremely bad 1997-2001 years, thereafter due to lower base; Gujarat’s growth rate, in immediate aftermath looks good. However, in last 5 years or so, Gujarat’s share of India’s GDP pie, has grown in line with other fast moving states at expense of known laggards (like UP & WB).



References:
1. RBI State Net Domestic Product 1984-2013
2. Page 142 and 144 GSDP at Constant Prices, Data for use of Deputy Chairman, Planning Commission, 03 May 2013.
One of the well heard argument is that “Gujarat is top progressing state in India, because we live in Gujarat and we know it”. Even if by some magic you can feel whole of India by living in Gujarat, the all India growth data begs to differ. The Gujarat GDP growth rank have highs and lows, before year 2002 and after.



Page 142, Real Growth Rates of States GSDP % at Constant Prices, Data for use of Deputy Chairman, Planning Commission.
A better measure of growth is CAGR (Compounded Annualized Growth Rate) on this. Lets calculate, CAGR at constant price of 1994-1999 (five years, pre Modi period), 1999-2004(half of that under Modi) and 2004-2012(last 8 year under Modi). Well, Gujarat has almost have same CAGR in 1994-1999 and 2004-2012, but India (Maharashtra and Tamil Nadu also) has picked up growth substantially during these two periods.



CONCLUSION:
1. Gujarat’s GDP growth rate higher than India, predates Modi’s term.
2. Initial GDP growth rate of Modi’s term, constitutes a recovery, from a low base of extremely bad 4 years of growth.
3. Under Modi, Gujarat’s GDP growth is inline with other progressives States.


CLAIM #2
2003-2013 is the only 10 straight years ever in Gujarat history which are complete Riot-free.
Fact: Plain Lie
Belies even basic common sense, clearly when the inter-community trust reaching nadir, even a trivial incident like a motor accident can flare-up.
Large scale riots happened within Vadodara in 2006 (no coincidence that next Gujarat elections were in 2007), but this time there were no Modi-protectors at Centre, so he had to fall in line.
Apart from that, regular stream of incidences involving arson, stone-pelting, stabbing, lynching etc kept on happening regularly all over Gujarat – Ahmedabad, Rajkot, Dohad, Veraval etc.

References:
Vadodara: Centre sends paramilitary help
Delhi-wary Modi calls in the army
PTI May 3, 2006, 10.23am IST
NEW DELHI: As violence did not show signs of ebbing in Vadodara, the Centre on Wednesday dispatched five companies of 500 personnel belonging to paramilitary forces to assist the Gujarat police in containing the situation.
Below are some references of incidences that keep on happening (will be many more, as not all get reported in first place and I have very limited links).
11 hurt in ‘communal’ clashes in Rajkot, A’bad
Curfew in parts of Dahod after clash
One killed in riots in Bhavnagar
26 shops gutted in Kodinar violence
Violence in Gujarat town, 3 dead
Three die in Vadodara clashes
Gomtipur violence smacks of poll agenda
Religious riots in western India leave two dead
30 people hurt in in Ahmedabad
Tension brews, violence spreads to Kalupur


CLAIM #3
Automobile majors are flocking to Gujarat because of great industrial climate Modi has created.
Fact: Plain lie.
Tata was given sops estimated to be worth Rs. 30 Thousand Crores over a period of time for investing only a fraction (Rs 2 Thousand Crores) in Sanand, Gujarat. That’s what brought Nano to Gujarat.
Modi’s sops to Tata for Nano Plant : Rs 30 Thousand Crores (estimated, on interest free loans and other sops)
The details have been made known through a government resolution dated January 1, 2009, listing the incentives offered to the Tatas. The group has been given 1,100 acres in Sanand, 35km west of Ahmedabad.
According to the agreement with Tata Motors, the government has decided to give the company a loan of Rs 9,500 crore for 20 years at 0.1 per cent rate of interest. By contrast, the CPM regime in Bengal had offered a subsidy package which included subsidies on land, power, tax paybacks and a soft loan of Rs 200 crore.
The Gujarat resolution is, however, silent on the existing policy of the state on 85 per cent job opportunities to local people.
Tata Motors’ investment in Sanand Plant Gujarat : Rs 2 Thousand Crores
Spread over about 1,100 acres, the plant in Sanand has been created at an investment of about Rs 2,000 crore.


Modi’s starting gift to Tata for Nano plant
Free public money in form of Rs 9,570 Crore loan as the interest is 0.1% and payment time is 20 years (23% of Gujarat’s budget for that year).
Plus, usual sops of tax and duty exemption, infrastructure development and 100 acres of land near Ahmedabad for township.
Which businessman will refuse such a deal?



Its “free” money that’s attracting, not Modi.
Gujarat government have already approved the interest free loan exceeding Tata’s investment.
According to a top official, a Gujarat government committee has approved a provisional loan of Rs 2,138.85 crore at 0.10 per cent annual interest, but the company’s demand is much higher.
An counterexample of a “real” success story, whoever heard of ND Tiwari, must have heard of wrong reasons.
The 2 Billion Dollar boom town.
2002 to 2006 (four years) Pantnagar, Uttarakhand, 2 Billion Dollars invested, not proposed, at a fraction of sops offered by Gujarat.




After all, India Inc is pumping in well over $2 billion in the Pantnagar Integrated Industrial Estate on the outskirts of Rudrapur. The sugarcane and paddy fields have given way to pre-fabricated industrial structures. Sturdy Sikh farmers atop tractors have had to make way for senior executives in cars and SUVs. The buzz of a boomtown is unmistakable.
In the last two years, 397 plots have been sold at Rudrapur to set up industrial units. The list of buyers includes top companies like Tata Motors, Bajaj Auto, Escorts, Voltas, Britannia, Nestle, Parle Biscuits, HCL, Hewlett-Packard, Dabur, Kores India.
India is growing, even poor old UP can boost of growth in high-tech industriesUttar Pradesh, Uttarakhand lead in high-tech manufacturing.
Furthermore, Sanand after 5 years, so far only Maruti (2015) and Ford (2014) have confirmed investments. Even after humongous “free public” money doled, as of now, at best Sanand is huge hype.
The famous argument of cascading effects of the plant, that will create employment and economic activity.
The same plant if relocated to any other place in India, the effects would have been same (say Tata expanded it’s Pantnagar plant). Here a CM has lured away Nano plant using huge amount of money directly from Gujarat government’s coffers. What has the state gained till now, Nano has failed, so have “cascading effects of the plant” Tata Motors’ Sanand plant stays idle (April 2003 plant utilization was mere 4.5%).



Well, some noteworthy points are
1. Gujarat already had a history of automobile production, prior to Modi. Hindustan Motors had a plant in Halol (150 km from Sanand), which was bought over by GM.
GM Halol.
2. Rest of India continue to attract automobile companies. TN vs Gujarat comparison.
List of vehicle plants in India 
Page 176, RBI State budgets 2007-08



CLAIM #4
Gujarat is only state in the whole India to provide 24*7 and 365 days electricity to almost all of its 18000 villages.
Fact: Plain Lie
This is a two part claim
1. 100% village electrification
2. Gujarat’s leadership in electricity availability to its populace
Gujarat’s villages were fully electrified by 1996 (or even before), Modi has no role in 100% village electrification. 
Electrification of villages, Page 23, Annual Report 1996-97, Ministry of Power
Moving on to availability of electricity, refer to a report of Census 2011, Availability of Electricity Census 2011



Percentage of households using electricity as the source of lighting in Gujarat is 90.4%, ranked 14th behind big states like (TN 93.4, Andhra 92.2), many smaller states and UTs. Thus, Gujarat is not the leader in providing electricity to its populace. Interestingly, Gujarat rank fell from 12th in 2001 Census to 14th in 2011 Census.


CLAIM #5
Every Gujarati is in love with Modi
Fact: Less than 50% Gujaratis are voting for Modi and around 40% are voting for Congress. BJP’s high vote share pre-dates Modi.



Below are vote shares of BJP and Congress in 5 elections prior to Modi and 5 under Modi.





In last, General Elections (2009) in Gujarat, vote share difference between BJP and Congress was only 3.5%. Correspondingly, seats won BJP 15 and Congress 11.
In India electoral systems, winners are based on seats won in which Modi/BJP is clear winner, but that does not mean everyone in Gujarat is voting for Modi/BJP. Within Gujarat Congress too have a healthy vote share in range of 40%.
References:
Election Commission of India


CLAIM #6
In WikiLeaks US diplomat described Modi as “incorruptible” — in fact, “the lone honest Indian politician”.
Fact: Plain Lie, no US diplomat mentioned that. On the contrary, complete reading of the cable is an another proof of “pseudo-secularist” charges on Modi (downright communal, big-ticket corruption and low on achievements).
This “fact” is based on Indian Express’s news item WikiLeaks show Narendra Modi honest: BJP
Narendra Modi and the BJP today made the most of the latest diplomatic cables released by WikiLeaks, saying these showed that the Gujarat Chief Minister was “incorruptible” — in fact, “the lone honest Indian politician”.
Dated November 2, 2006, the cable sent by Michael S Owen, the Consul General in Mumbai, refers to Modi’s growing potential as a national leader of his party and the need to engage with him to “directly” deliver a message on human rights.
Here is the link from WikiLeaks of the Cable sent by Michael Owen, Consul General
Gujarat CM Modi sets his sights on national politics
2006 Nov 2 Cable ID:06MUMBAI1986_a

Modi has  successfully branded himself as a non-corrupt, effective administrator, as a facilitator of business in a state with a  deep commercial culture, and as a no-nonsense, law-and-order  politician who looks after the interests of the Hindu majority.
He has successfully cultivated the image of a clean politician who has reduced corruption in public life in Gujarat.  Views differ on how clean and non-corrupt Modi actually is, however.
However, several people tell us that big ticket corruption is still common.
Since, when branding becomes reality or opinion, moreover the cable mentions commonplace existence of big-ticket corruption.
The cable is extremely critical of Modi on various accounts (positive points also were also there)
The Chief Minister is openly distrustful of the higher-caste party officials around him, yet is careful not to make caste an issue since he seeks the support of the Gujarati commercial class, most of whom are Patels or other higher castes.
By all accounts, however, he is an insular, distrustful person who rules with a small group of advisors. This inner circle acts as a buffer between the Chief Minister and his cabinet and party. He reigns more by fear and intimidation than by inclusiveness and consensus, and is rude, condescending and often derogatory to even high level party officials.
Modi continues to support a Hindutva agenda in the state, with the recent passage of amendments to the state’s anti-conversion law (ref A) being seen as a concession to his supporters on the Hindu right.  Both supporters and critics of Modi confirm that the state government continues to use administrative tools to marginalize and ghettoize the Muslim minority.
Although Gujarat tops all Indian states in terms of investment intentions,actual investment is far less, and certainly less than the neighboring state of Maharashtra.
Ahmedabad does not have the visible construction activity, and increasingly noticeable foreign presence, of Pune in neighboring Maharashtra, for example.


CLAIM #7
Gujarat’s agriculture growth is 10-11% since whole last decade.
Fact: Plain Lie
In last 6 years, Gujarat’s agriculture had -ve years of growth -1.08% (2007) & -8.71% (2009), and a zero growth year 0.3% (2010).
Importantly, functioning of Sardar Sarovar project, BT cotton and normal monsoon for last decade, have provided a great boost to Gujarat’s agriculture.



Page 61, GDP by Industry of Origin, Data for use of Deputy Chairman, Planning Commission.
Furthermore, another data table of Ministry of Agriculture, mentions Gujarat’s agriculture from 1996-97 to 2010-2011 (not given whether it is at constant/current price or gross/net DP), to have frequently years of high negative growth and high positive growth, the variance is so high, by selecting a year, the corresponding growth can significantly change over a period.



Page 53, GDP by Industry of Origin, Data for use of Deputy Chairman, Planning Commission.
By no stretch of imagination Gujarat’s agriculture growth is consistent 10%-11%.


.CLAIM #8
Gujarat tourism is growing faster than ever before.
Fact: Gujarat tourism’s %age share and rank is stagnant during most of Modi’s tenure.
Detailed statistics of India Tourism since 2003 is available on the Ministry of Tourism
Note:
1. Comparison, is up to 2011 only (as verified data is available till that date only).
2. Statistics data of a state, fluctuates too much. In 2011 Karnataka tourism jumped 120%.
3. Low bases, can look percentage increase in a year, impressive.
Gujarat tourism and rest of India’s
2003 (Page 48, Table 4.1), 2011 (Page 89, Table 5.1.2)



Gujarat State Tourism Rank (Domestic and Foreign)



Absolute increase in number of tourists 
2003 (Page 48, Table 4.1), 2011 (Page 89, Table 5.1.2)




Conclusion, Gujarat tourism is growing almost in line with the national tourism, and lags far behind in absolute numbers.


CLAIM #9
According to central govt’s labour bureau’s report, Gujarat has the lowest unemployment rate in country.
Fact: As per 2012 report, Gujarat was ranked 1st among states (excluding UTs), which has fallen to 5th in 2013 report.
Labour Bureau reports page
2012 Report
2013 Report
2013 Report lowest unemployment rates per 1000 among states is as follows
1. Chhattisgarh 14
2. Karnataka 20
3. Madhya Pradesh 22
4. Andhra Pradesh 25
5. Gujarat 27
6. Rajasthan 32


CLAIM #10
Gujarat is the first state in country to have “high speed wireless broadband” service in its all 18000 villages.
Fact: BSNL brought that to Gujarat. Ironically this is one of deals for which former Telecom minister A. Raja is under investigation.
Timeline
BSNL, US’ Soma Networks in tie-up for largest WiMAX deal
Jan 25, 2008 NEW DELHI: State-run telecom operator BSNL has tied up with US-based WiMAX solutions firm Soma Networks for the largest WiMAX deployment in the country covering four states in three circles. The proposed infrastructure would provide services to about 20 crore people in Gujarat, Maharashtra, Andhra Pradesh and Goa.
BSNL Launches India’s First High-speed Wireless Broadband Network in Gujarat
Feb 26, 2009 AHMEDABAD, INDIA and SAN FRANCISCO, CA
Bharat Sanchar Nigam, Ltd (BSNL), India’s state-owned and largest telecommunications company, and SOMA Networks, Inc., a leading provider of WiMAX solutions, today announced the commercial launch of “BSNL Wireless Broadband” service in the state of Gujarat.
WiMAX comes to Goa, finally
Jun 30, 2009 PANAJI: Almost six months after it was announced, Bharat Sanchar Nigam Ltd (BSNL) on Monday launched its Wireless Broadband service called WiMAX’ with a target of 10,000 customers for the first year. Twenty-five Base Transceiver Stations (BTS) have been installed on mobile towers across the state, mostly in urban and coastal areas, to serve the purpose, said BSNL officials.
Incidentally, BSNL-SOMA WiMAX deal is under investigation in corruption saga of former Telecom Minister A Raja.
A Raja may be booked in BSNL’s WiMax deal
Aug 26, 2011 NEW DELHI: In a move that could portend fresh trouble for former Telecom Minister A Raja, the CBI has registered a Preliminary Enquiry (PE) to probe the alleged bunglings in the allocation of franchisees of WiMax services by state-run operator BSNL.
In January 2008, BSNL had selected Soma Networks for WiMax service in Gujarat, Maharashtra, Goa and Andhra Pradesh.
In other words, its A Raja, who bought WiMax to Gujarat.


CLAIM #11
2010 Forbes magazine rated Ahmedabad the fastest growing city in the India and 3rd in World.
Fact: Everything about this claim is falsified and misleading.
The World’s Fastest-Growing Cities
1. This not a list by Forbes magazine, rather an opinion of Professor Joel Kotkin
2. This list excludes traditional powerhouses of Mumbai and Delhi, as outside of scope.
3. Nowhere it is mentioned that the list is a ranking of some sort.
4. It mentions three Indian cities Chennai, Bangalore and Ahmedabad, in no particular order.
5. It’s a focused study, limited in scope for top cities. The top 7 Indian cities by population are Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad and Ahmedabad. So, only ones left out are Kolkata and Hyderabad. 
We have also passed over cities that have achieved prominence in the past 20 years such as Seoul, Shanghai, Singapore, Beijing, Delhi, Sydney, Toronto, Houston and Dallas-Fort Worth.
Nor does our list include the massive, largely dysfunctional megacities–Mumbai, Mexico City, Dhaka, Bangladesh–that are among planet’s most populous today. Bigger often does not mean better.
Instead, our list focuses on emerging powerhouses like Chongqing, China, which Christina Larson in Foreign Policy recently described as “the biggest city you never heard of.
India, although not by plan, also is experiencing a boom in once relatively obscure cities. Its rising urban centers include Bangalore (home of Infosys and Wipro ), Ahmedabad (whose per-capita incomes are twice that of the rest of India) and Chennai (which has created 100,000 jobs this year). Many of India’s key industries–auto manufacturing, software and entertainment–are establishing themselves in these cities.
The list intends that American came to know about the emerging economic centres in the World. I don’t think for an Indian, news that after Delhi and Mumbai, it’s Chennai, Bangalore and Ahmedabad, which are fast growing economic cities is an “astonishing” information.
City wise links with for the said list are here BangaloreAhmedabad andChennai

CLAIM #12
Modi made the Asia’s biggest solar plant.
Intending: Solar energy revolution was started by Modi.
Fact: Solar energy revolution in India was started by UPA govt in 2010.
Jawaharlal Nehru National Solar Mission
JLNSM was launched on the 11th January, 2010 by the Prime Minister. The Mission has set the ambitious target.of deploying 20,000 MW of grid connected solar power by 2022.
Jawaharlal Nehru National Solar Mission 2010-2011
Since launch of the JLNSM, the capacity of solar power projects has grown from 8 MW in January 2010 to over 979 MW in the country.
Clearly Rajasthan and Gujarat, being the biggest desert states in India, solar program was likely to have the largest impact there. Due credit to Gujarat though that it beat Rajasthan to first place.
Rajasthan is second state to cross 500MW capacity mark
According to Rajasthan Renewable Energy (RREC), the agency responsible for implementing solar policy in Rajasthan, the state added 5MW of grid-connected PV in fiscal year 2010-2011, 191MW in 2011-2012 and then jumped by 314MW in the most recent fiscal year
Rajasthan to Build World’s Largest Solar Power Plant
The Rajasthan government is gearing up to build an ‘Ultra- Mega Green Solar Power Project’ (4000 MW) close to Sambhar Lake, 75 km from the Jaipur capital. The power plant, which will spread across 23,000 acres of land, will be world’s largest solar energy project when completed.
To complete the Renewable energy picture, Tamil Nadu is the leader
Central Electricity Authority, Jan 2013



Note: Hydro stations with installed capacity <= 25 MW are considered Renewable Energy.

CLAIM #13
World bank’s statement of 2011 said, Gujarat roads are closer to international standards.
Fact: Plain Lie, World Bank gave no such statement. Claim is a gross exaggeration of a World Bank report.
Source on these claims are primarily based on Times of India news itemGujarat roads closer to international standards: World Bank. The mentioned World bank report is here Maintaining road assets : a fresh look at the World Bank’s 1988 policy paper “Road Deterioration in Developing Countries” (English).
This document is primarily an internal policy assessment of World Bank funding of road projects in developing countries. Developed countries, thus their “international” roads are outside the report’s preview. While the document is generally appreciative (it criticizes also) of Gujarat’s working model. Nowhere, World Bank said that the Gujarat roads are of international standard, let alone give a “statement”.
Another article appeared in Times of India to “strengthen” this claim in 2012Gujarat highways’ quality flies over global standard. The mentioned World bank report is here Project Performance Assessment Report.
This report is an assessment of only two WB funded projects, not an all India study on roads.
This Project Performance Assessment Report assesses the development effectiveness of two transport projects in India, the Gujarat State Highways Project (2000-07) and the Karnataka State Highways Improvement Project (2001-07).
The report selected Gujarat and Karnataka, as these states have almost equivalent length of road network in 2011 (in fact, Gujarat and Karnataka, are quite close in terms of area and population also).
Karnataka also had “World Class” roads in 2010
ToI  failed to mentioned that, the only other state that was evaluatedKarnataka also had “World Class” roads in 2010, only in 2011 there was a quality fall. The report sets “International Roughness Index” 4 as the expected result after project execution.

Related
The "Awards" Modi supporters circulate are full of Half-Truths or Plain Lies.
The myth of Gujarat's exceptional GDP growth under Modi.
Lure of free public money many times its investment made Tata shift Nano plant to Gujarat.



Source : Debunking Facebook myths

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