US India Policy Institute
Publication # USIPIPUB02 April 2012
A recent TIME magazine article (March 26, 2012 South Asia issue) has exalted the economic growth and development opportunities offered by the State of Gujarat and has appreciated the role of its chief minister for having made it possible. This paper reviews various economic and social data and concludes that on most of the measures Gujarat does not fare well, and rather it is way down on 4th to 6th place in the list of states of India. The study finds no evidence to the hype that Gujarat is the favorite destination of foreign direct investment (FDI) raking below Maharashtra, New Delhi and Karnataka. The study documents that in the past decade Gujarat received less than 1/6th the FDI received by Maharashtra and less than 1/3rd the FDI received by New Delhi.
Gujarat is one of the largest states in India known for sustained levels of development. ‘Gujarties’ the people of Gujarat so identified – ‘rings a bell’ in imagination as enterprising people with an edge to manage and invest money in businesses and enhance savings. These Gujarati attributes are not new, rather age old; and developed over centuries especially due to their easy contact with the travelling business men from all over the world at the Indian west-coast. No wonder then that Gujarat is one of the few states where income earning opportunities have always been better and praiseworthy. Notwithstanding, such a relative advantage in income growth, it is useful to review how Gujarat is faring in other measures of standard of living such as poverty, human development, hunger and so on. Further, it is also instructive to review as to how various socio-religious communities living in Gujarat are placed in a relative perspective and are they getting the benefit of higher growth experience in Gujarat.
Multiple data especially those from the National Accounts (NAS), The Reserve Bank of India, National Sample Survey Organization, the Human Development Survey of the National Council of Applied Economic Research and the Prime Minister’s High Level Committee (Sachar Committee) report are used in this analysis. The FDI information according to main centers of investments is drawn from ministries of Commerce and industry. This review explores, firstly the relative development of Gujarat, followed by the Socio-religious differentials in standard of living within the State.