Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
Notice (8): Undefined variable: urlPrefix [APP/Template/Layout/printlayout.ctp, line 8]latest-news-updates/gujarat-model039s-failure-explains-why-the-economy-is-a-significant-factor-in-the-coming-elections-jayati-ghosh-4683333.html"/> LATEST NEWS UPDATES | Gujarat Model's Failure Explains Why the Economy Is a Significant Factor in the Coming Elections -Jayati Ghosh | Im4change.org
Resource centre on India's rural distress
 
 

Gujarat Model's Failure Explains Why the Economy Is a Significant Factor in the Coming Elections -Jayati Ghosh
-TheWire.in

The model of development that was presented as a success story relies on patronising and providing incentives to large businesses while simultaneously suppressing wage incomes.

By now, almost everyone in the country knows the one thing Prime Minister Narendra Modi and the team around him excel in – the art of public relations and media management. This is the reason that the ‘Gujarat model’ of handling a state’s economy became such a major talking point in the run-up to the 2014 general elections. This model was widely projected across major media as a huge success in delivering both growth and development, even though that Gujarat’s performance was at best middling among all states, and in some cases, actually lagged behind in crucial indicators.

The myth of Gujarat’s economic growth was effectively punctured in 2014 by the impressive volume co-edited by Indira Hirway, Amita Shah and Ghanshyam Shah (Growth or Development: Which Way is Gujarat Going?”, Oxford University Press, 2014). They showed that much of the high growth so effectively advertised by the Modi state government was really a continuation of past trends which in turn were largely due to Gujarat’s advantages in agriculture and manufacturing, aided by the easy availability of land and infrastructure facilities such as electricity – all of which predated chief minister Modi. But in addition, further economic growth under Modi’s tenure as chief minister was heavily reliant on attracting large corporate investment through large subsidies and incentives of various kinds. This meant that the income growth was very unequal, so that the benefits of the growth did not percolate to the people as propagated by the ‘trickle-down’ hypothesis.

Ironically, given Prime Minister Modi’s famous invectives against corruption, the multiple favours given to large industry as part of the strategy of encouraging industrialisation also meant that Gujarat was one of the states where ‘crony capitalism’ flourished. Certain industrial groups were particular beneficiaries of the economic policies of the Modi government in Gujarat, such that the rise of the groups like the Adanis was almost coterminous with that of the Modi-controlled government in the state. Meanwhile, the large incentives provided to large corporate players (but not to small and medium enterprises) in terms of cheap or free land, water and other infrastructure created both extremely distorted markets for these as well as adverse fiscal consequences. The huge expenditure on incentives and subsidies left less public funds for social sectors, so that Gujarat had much lower per capita expenditure on social sectors compared to other states as similar levels of per capita income, and indeed performed quite poorly in this regard among the major states.

Other work, including by Maitreesh Ghatak, has also highlighted the growing gap between income growth and conditions of life, including the fact that Gujarat’s social indicators are generally much worse than comparator states with similar per capita GDP, and are only middling among all states – and indeed have worsened in some cases.

It could be possible, with effective media management, for these facts to be concealed from voters in the rest of the country, as they mostly were in 2014. So the electorate outside Gujarat could therefore fall for the tall claims made on behalf of ‘Modinomics’ and vote for someone who they thought would generate positive economic transformation and productive employment generation across the entire country, using the magic he had supposedly already produced in the state of Gujarat. But the hard reality of lack of developments would presumably be hard to conceal from the people of Gujarat themselves. Despite that, they continued to vote for the BJP, which even experienced rising vote shares over successive state elections.

Please click here to read more.