The Telegraph, July 6, 2012
Thursday, July 05, 2012
PLOT OF A GROWTH STORY - Where Narendra Modi stands in relation to the Gujarat miracle
By Swapan Dasgupta
The mere mention of Narendra Modi evokes controversy. To his admirers, the Chief Minister of Gujarat is the type of no-nonsense leader India needs at this juncture. Decisive, single-mindedly purposeful, hugely popular in his state and with an uncontested reputation for honesty and personal integrity, he is seen as the leader who has steered Gujarat in the direction of efficient growth. To his detractors, Modi’s style of leadership is authoritarian, divisive and unsuited to a complex and diverse country such as India.
The debate over Modi and his style of leadership was hitherto centred on Gujarat. However, now that the Bharatiya Janata Party is very seriously considering projecting him as a possible prime ministerial candidate for the 2014 election, the battle over Modi’s credentials has acquired national importance.
To gain acceptance on the national stage as a serious claimant for the masnad of Delhi, Modi must first demonstrate his continuing hold over his home state. To that extent, the Assembly election in Gujarat scheduled for December this year has acquired a pan-Indian significance. If Modi prevails for the third consecutive occasion, it is more than likely that his burgeoning fan club will make it impossible for the BJP leadership to deny him the top slot in the hierarchy. A defeat, on the other hand, will reopen the leadership question in India’s premier opposition party.
In the Gujarat Assembly elections of 2002 and 2007, the opposition to Modi was focussed on two points: his handling of the 2002 riots and the so-called alienation of the powerful Patel community. Modi was able to brush away his opponents by invoking regional pride and, in 2007, pointing to his achievements in governance. For the forthcoming election, his opponents appear to have changed tack. Wiser with the knowledge that a Modi-centric campaign actually helped the incumbent, their approach is likely to be different.
Of course, the grievances of the Patel community are once again likely to feature thanks to the decision of the veteran Keshubhai Patel to forge a Third Front of sorts. However, the Congress seems to be gearing up for a very different sort of campaign: questioning Modi’s credentials as the new messiah of development.
Judging by the intellectual test marketing of the new anti-Modi rhetoric, what is significant is that the old secular-communal issue and the riots of 2002 will not feature. There appears to be recognition in the state Congress that reopening the old wounds actually benefits Modi. Gujarat, it would seem, is anxious to forget the 2002 nightmare for two reasons: the lapse of a decade and a new prosperity that in turn has created an yearning for stability and good governance.
The assault on Modi is likely to be on two issues. First, it is being suggested that Gujarat, far from being the beacon of development in India, has actually under-performed on crucial fronts. The claim is that Modi’s reputation as a formidable administrator owes more to hype and slick public relations than to hard reality.
The second point of attack is more complex and aimed at reassuring voters that meaningful progress will continue in a post-Modi Gujarat. The development of Gujarat, it is being said, owes nothing to Modi: the Chief Minister has merely ridden piggyback on a pre-existing high growth rate which owes everything to location and the entrepreneurial spirit of the Gujaratis. Modi or no Modi, it is being said, Gujarat would have developed anyway. As Bihar Chief Minister Nitish Kumar, who regards Modi as an unacceptable feature of Indian politics, pointed out in a recent interview, there is no big deal in developing an already developed state.
The quantum of development in Gujarat can be measured by statistics. Using statistics culled from the Planning Commission, Bibek Debroy has shown that Gujarat’s average growth has risen since the 1990s but unevenly. The average growth was 6.1 per cent during the 7th Plan (1985-1990), 12.9 per cent during the 8th Plan (1992-1997), 2.8 per cent during the 9th Plan (1997 to 2002), 10.9 per cent during the 10th Plan (2002-2007) and an estimated 11.2 per cent during the 11th Plan (2007-2012).
What is more, the growth rate has been consistent across sectors, including in agriculture—India’s most problematic sector. Despite four years of drought, agriculture grew on an average by 10.7 per cent in the period 2001-02 to 2010-11. Most significant was the rise in cotton production from 16.8 lakh bales in 2001-02 to 104 lakh bales in 2010-2011. In the same period, industry also grew by 10.3 per cent and services by 10.9 per cent.
Although jumping to instant political conclusions would be rash, statistical evidence would bear out the belief that sustained double-digit growth has coincided with Modi’s tenure as Chief Minister. Indeed, apart from Karnataka which equalled Gujarat’s 11.2 per cent growth during the 11th Plan, none of the big states of India has equalled Gujarat’s sustained growth over the past decade. Modi’s critics point out that Gujarat’s growth rate has been overtaken by Bihar (which began from a zero base), Delhi (which has a special status in Delhi) and Pondicherry. But that is like saying—as some politicians do—that India’s faltering six per cent growth is better than the United States’ projected two per cent growth.
The question therefore arises: is economic growth of the kind Gujarat has witnessed over the past decade completely unrelated to politics and governance, as Modi’s critics have maintained? If true, Modi, it would appear, has steered political economy in an entirely new direction by insulating economic activity from the dirty business of politics. Aspiring for this autonomy has long been the cherished dream of the Indian corporate sector. Are Modi’s critics crediting him for this unintended achievement?
That every state must act in tandem with the DNA of its people is a given feature of public life. In suggesting that it is not the job of the government to get too embroiled in business, Modi has been pursuing the goal of minimal but focussed governance. This corresponds well with the strong entrepreneurial instincts of Gujaratis, cutting across religions. The question, however, remains: is entrepreneurship alone a sufficient precondition of growth? Or, must the state act as the great facilitator of entrepreneurship for economic growth to go beyond individual success stories and touch the community?
In the past decade, Gujarat has focussed on the upgradation of infrastructure, particularly roads and ports. In addition, the Government has taken pro-active steps to attract enterprise aggressively by laying down attractive facilities and terms. This may explain why Tata Motors abandoned the troubled Singur in West Bengal and moved to Gujarat. And it was the Tata decision that had a multiplier effect and contributed to the creation of a new automobile manufacturing hub in Gujarat. Yet, none of this would have happened had the state not established a record of low corruption, quick decision-making and nurtured a civic culture that cherished entrepreneurship. True, Modi played to the pre-existing strengths of Gujarat. But had the Chief Minister been venal, unresponsive and mindlessly populist—as he so easily could have been—would India still be talking of the Gujarat miracle?
The Telegraph, July 6, 2012