Myth called Gujarat model
25 April 2014 12:00 AM GMT
Notwithstanding BJP’s prime ministerial candidate Narendra Modi’s persistent claim of the success of the Gujarat model and the need for its nation-wide replication for faster development and higher empowerment of the people, the Modivision appears to be not only politically prejudiced but also undermines the very indomitable Gujarati spirit of entrepreneurship. Modi’s so-called development treatise has provoked controversies across non-BJP ruled states and among Congress party bigwigs pointing at its statistical shortcomings and inapplicability outside Gujarat. The criticism is partly correct. In reality, what really aided Gujarat’s economic progress overcoming all natural obstacles and deficiencies is the pathological connect of its people with the spirit of entrepreneurship that tends to dwarf, even globally, the enterprise of the Jewish clan. Modi is wrong to claim credit for ‘invention’ of the so-called Gujarat model. Factually, there is no Gujarat model. It was never there. However, there exists a universal Gujarati model that has put Gujaratis, in general, as an entrepreneurial class, on top not only in India, but also in highly competitive global economies such as the USA, Canada, the EU and the African continent.
Gujaratis perform their best in a liberal enterprise regime. And, one must give some credit to Narendra Modi to recognize that. Although his predecessors too tried to follow a similar policy, their success was less visible due to the centre’s control-permit system until almost 1994. One of Modi’s Lok Sabha election campaign commercials promises that if his party forms the next government, there will be less of government (controls) and more of governance. Modi’s 12-year rule in Gujarat as its chief minister has tried to do exactly that since after the governance collapse soon after he sat on the hot seat of power in 2002. Modi was charged with from administrative inaction to inspired revenge killings, arson and loot in the bloody communal riot in the state, leaving some 2,000 dead, a large number injured and incapacitated, and their properties destroyed. The infamous Gujarat riot was ignited by the burning of a packed stationary passenger train at the Godra station in Gujarat causing horrific death to scores of home-bound devotees from
Ayodhya. Though Modi failed to govern and check the minority massacre, the state never had another communal riot since.
Behind Gujarat’s remarkable development in the last 25 years was a series of economic reform by the union government of which the state took probably the maximum advantage. The privatisation of the power sector and off-shore hydrocarbon find helped the state become a hub of petroleum refining, petro-chemical, cement, fertiliser, pharmaceutical, synthetic fibre, dyes, chemicals and textile industries. Successful Gujarati NRI businessmen started flocking to the state with investments in small and medium sectors and services such as hotel, hospitality, healthcare and education. Modi, however, deserves credit for being able to muster Gujarati NRI support through investment fairs and intense marketing of the state among rich non-resident Gujaratis in North America and Europe. These hi-profile investment fairs and external marketing can at best be termed as a very effective mode but not an economic model.
Before the creation of the state of Maharashtra on 1 May 1960, the Bombay state was an adjunct of Saurashtra. Under the colonial rule, Bombay was developed as British India’s second most important city and commercial hub after Calcutta with Bombay boasting the country’s biggest sea port and textile centre. Enterprising Gujaratis and Parsis from Navsari (also in Gujarat) moved in to Bombay to set up hosts of industries, including international shipping (Scindia Steam Navigation), textile mills, clearing and forwarding agencies, stock broking firms, finance companies and import-export trading. The formation of the states of Gujarat and Maharashtra by the acts of Parliament got Bombay merged with Maharashtra, taking away a massive Gujarati wealth and investment in the country’s richest city and the centre of trade, commerce and financial activities, including two principal stock exchanges.
Post-economic reform, Gujarat has outperformed all other state economies following massive investments by the Ambanis (petroleum, petrochemicals and port), the biggest Indian and Gujarati entrepreneur, Adanis (port and power) and Tatas (automobile) to name a few. Thanks to pro-business state agencies such as the Gujarat Industrial Development Corporation (GIDC) and Infrastructure Corporation (GIIC), the state has lately emerged as a symbol of the country’s march towards economic progress and high pace of development. Today, the number of Gujarati employers in the state far outstrips the number of Gujarati employees. As a result, Gujarat has emerged as the No. 1 destination of inter-state migrant labour engaged by various local industries.
Almost the entire workforce employed in the jem-jewelry-diamond business in Gujarat, the country’s largest, with Surat as its epicenter, comes from outside the state. Employers are almost all Gujaratis. Enterprising Gujaratis are also leading the diamond trade in Belgium and the Netherlands, seizing the centuries-old control of the business from traditional Jewish traders. In North America, they control the mid and lower segment of the hospitality business. About 70 per cent of motels in the US and Canada are owned by Gujaratis. The Gujarati business community was among the earliest Asian settlers in mineral rich colonial Africa. A new research by US National Foundation for American Policy (USNFAP) revealed that 23 of the country’s top 50 venture-funded companies had immigrant founders, most of them having India, especially Gujarat, as their common place of origin. These Indians, mostly Gujaratis, have created an average of 150 jobs per company in the US.
In the light of such global Gujarati entrepreneurial success, Modi’s oft-claimed Gujarati model under his political stewardship would appear to be an overstatement without denying the fact that his government has been more liberal and friendly towards business entrepreneurs in the state than the predecessors. Ironically, the bureaucracy or the babudom in Gujarat is almost entirely in the hands of non-Gujaratis, who enjoy considerable freedom in generating business and development-friendly ideas and innovations for their political masters to choose from for policy making and implementation.
That has made Gujarat different – no matter how political leaders and opponents from other states and the national government contest or interpret it. The credit goes to Gujaratis in general and not to a single Gujarati Narendra Modi.IPA
Gujaratis perform their best in a liberal enterprise regime. And, one must give some credit to Narendra Modi to recognize that. Although his predecessors too tried to follow a similar policy, their success was less visible due to the centre’s control-permit system until almost 1994. One of Modi’s Lok Sabha election campaign commercials promises that if his party forms the next government, there will be less of government (controls) and more of governance. Modi’s 12-year rule in Gujarat as its chief minister has tried to do exactly that since after the governance collapse soon after he sat on the hot seat of power in 2002. Modi was charged with from administrative inaction to inspired revenge killings, arson and loot in the bloody communal riot in the state, leaving some 2,000 dead, a large number injured and incapacitated, and their properties destroyed. The infamous Gujarat riot was ignited by the burning of a packed stationary passenger train at the Godra station in Gujarat causing horrific death to scores of home-bound devotees from
Ayodhya. Though Modi failed to govern and check the minority massacre, the state never had another communal riot since.
Behind Gujarat’s remarkable development in the last 25 years was a series of economic reform by the union government of which the state took probably the maximum advantage. The privatisation of the power sector and off-shore hydrocarbon find helped the state become a hub of petroleum refining, petro-chemical, cement, fertiliser, pharmaceutical, synthetic fibre, dyes, chemicals and textile industries. Successful Gujarati NRI businessmen started flocking to the state with investments in small and medium sectors and services such as hotel, hospitality, healthcare and education. Modi, however, deserves credit for being able to muster Gujarati NRI support through investment fairs and intense marketing of the state among rich non-resident Gujaratis in North America and Europe. These hi-profile investment fairs and external marketing can at best be termed as a very effective mode but not an economic model.
Before the creation of the state of Maharashtra on 1 May 1960, the Bombay state was an adjunct of Saurashtra. Under the colonial rule, Bombay was developed as British India’s second most important city and commercial hub after Calcutta with Bombay boasting the country’s biggest sea port and textile centre. Enterprising Gujaratis and Parsis from Navsari (also in Gujarat) moved in to Bombay to set up hosts of industries, including international shipping (Scindia Steam Navigation), textile mills, clearing and forwarding agencies, stock broking firms, finance companies and import-export trading. The formation of the states of Gujarat and Maharashtra by the acts of Parliament got Bombay merged with Maharashtra, taking away a massive Gujarati wealth and investment in the country’s richest city and the centre of trade, commerce and financial activities, including two principal stock exchanges.
Post-economic reform, Gujarat has outperformed all other state economies following massive investments by the Ambanis (petroleum, petrochemicals and port), the biggest Indian and Gujarati entrepreneur, Adanis (port and power) and Tatas (automobile) to name a few. Thanks to pro-business state agencies such as the Gujarat Industrial Development Corporation (GIDC) and Infrastructure Corporation (GIIC), the state has lately emerged as a symbol of the country’s march towards economic progress and high pace of development. Today, the number of Gujarati employers in the state far outstrips the number of Gujarati employees. As a result, Gujarat has emerged as the No. 1 destination of inter-state migrant labour engaged by various local industries.
Almost the entire workforce employed in the jem-jewelry-diamond business in Gujarat, the country’s largest, with Surat as its epicenter, comes from outside the state. Employers are almost all Gujaratis. Enterprising Gujaratis are also leading the diamond trade in Belgium and the Netherlands, seizing the centuries-old control of the business from traditional Jewish traders. In North America, they control the mid and lower segment of the hospitality business. About 70 per cent of motels in the US and Canada are owned by Gujaratis. The Gujarati business community was among the earliest Asian settlers in mineral rich colonial Africa. A new research by US National Foundation for American Policy (USNFAP) revealed that 23 of the country’s top 50 venture-funded companies had immigrant founders, most of them having India, especially Gujarat, as their common place of origin. These Indians, mostly Gujaratis, have created an average of 150 jobs per company in the US.
In the light of such global Gujarati entrepreneurial success, Modi’s oft-claimed Gujarati model under his political stewardship would appear to be an overstatement without denying the fact that his government has been more liberal and friendly towards business entrepreneurs in the state than the predecessors. Ironically, the bureaucracy or the babudom in Gujarat is almost entirely in the hands of non-Gujaratis, who enjoy considerable freedom in generating business and development-friendly ideas and innovations for their political masters to choose from for policy making and implementation.
That has made Gujarat different – no matter how political leaders and opponents from other states and the national government contest or interpret it. The credit goes to Gujaratis in general and not to a single Gujarati Narendra Modi.IPA
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