Gujarat’s Vibrancy

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Gujarat’s economic trajectory has been cited as a model for growth by economists, hopeful foreign investors, and party faithful alike. And virtually all of them agree that the state’s achievements were initiated by Prime Minister Narendra Modi, a firebrand Bharatiya Janata Party leader and former Rashtriya Swayam Sewak pracharak, who is committed nationally to a path of clean government, and industrial and agricultural growth, energized by transformational technology.

According to the Indian Brand Equity Foundation (Ibef.org), a body established by India’s Ministry of Commerce and Industry, Gujarat is one of the high-growth states in the country with an average annual Gross State Domestic Product (GSDP) growth rate from 2004-05 to 2015-16, of 12.02 per cent. Gujarat has achieved the distinction of being one of the most industrially developed states and contributes about a quarter to India’s goods exports, the report notes.

At this January 2017 Vibrant Gujarat Summit, the U.S.-India Business Council delegation led by John Chambers, USIBC Board Chairman and Executive Chairman, Cisco Systems, comprised of some 100 representatives from leading U.S. companies. Former president of USIBC, Mukesh Aghi, who is now with the breakaway U.S.-India Strategic Partnership Forum, said in January, “Vibrant Gujarat has placed India on the world map, providing an impetus to industrial growth, innovation and has paved the way for multinational companies to integrate India in their global supply chain. I congratulate Prime Minister Modi for realizing the dream of not just Vibrant Gujarat but a Vibrant India.”

Columbia University professor and freemarket economist Jagdish Bhagwati, and his colleague at the same university, Arvind Panagariya, India’s first vice-chair of the newly formed NITI Aayog, have been among the leading supporters of the entrepreneurship- driven growth in Gujarat. While economists continue to battle on the ‘Gujarat model’, Indian-American Gujaratis as well as foreign investors place their bets on Gujarat and want to see the rest of India go the Gujarat way.

Gujarat, the IBEF maintains, “has achieved the distinction of being one of the most industrially developed states.” Among the major initiatives are the Vibrant Saurashtra Expo and Summit which was held in Rajkot in January 2016, and during which MoUs worth US$ 341.88 million were realized for the development of various sectors of the state; The government is developing a High Speed Rail passenger corridor from Ahmedabad to Mumbai with the cooperation of the Government of Japan, and undertaking the modernization of 20 railway stations: An incentive program for the Industries (General) from 2016-2021 in accordance with the New Industrial Policy of 2015, has been announced to attract increased investments in the manufacturing sector to create more employment opportunities; New Delhi has plans to set up a medical device park in the state, which has a well developed infrastructure with one major port and 44 non-major ports, making Gujarat the state with the highest number of operational and commercial cargo ports in India; and an Industrial Policy, 2015, which offers attractive incentives and concessions to prospective investors.
Those who travel frequently to their ancestral home state, and investors engaged with the country, believe the strength of that growth model will endure years after the architect left for New Delhi – – as an industrial and technological hub, viewed as a prime destination of foreign investors eager to locate their enterprises.

“Gujarat is energy surplus, blessed with natural gas infrastructure. Of all the states in India, Gujarat remains on the top of the list as foreigners consider expansion entry to India,” Ron Somers, former president of the U.S.-India Business Council, told News India Times. Somers now heads his own consultancey, India First Group, of Washington, D.C. “The greatest asset of the state is the dynamic entrepreneurial people who live there. This is a state which means business. The heritage and culture of Gujarat are unmatched,” Somers added in his email responses while on a visit to India Nov. 29.

During the 2000s, Gujarat’s growth rate was 6.9 per cent compared to the national average of 5.6 per cent, the website Narendramodi.com, points out. “The entire world talks about the Gujarat Model of Development. This is a Model that celebrates the collective efforts of the people of Gujarat,” it adds, noting further that, “Gujarat’s development journey is characterized as development oriented, inclusive and participative,” and all three sectors, agriculture, industry, and services, were tackled, with optimum use of technology “to minimize corruption (sic) increase the pace of development.”

Most observers and analysts, as well as those who remain connected to the state by emotional and ancestry ties, tend to describe the history of the state in “Before-and-After Modi” terms. Economists writing in those years also described the state’s trajectory in similar fashion.

“Gujarat has come a long way since early 2000s, bringing in economic reforms, deregulation, electrification of villages, growth of industries including manufacturing, and exponential service industry growth,” said Dr. Sudhir Parikh, publisher of News India Times and recipient of India’s Padma Shri award, “The credit going to the initiator – Narendra Modi.”

“Gujarat is still progressing well. There seems to be religious harmony and no riots, so it is socially more stable, as well as economically and politically. To continue that, I’m sure voters will go for growth and stability rather than chaos,” Parikh said looking to the Dec. 10 elections.

“As in every place which is heading towards elections, there is an overload of information being disseminated to the public,” said Somers when asked about his view from the ground.

“In the case of Gujarat, the proof is in the pudding. Employment is robust. Industries are succeeding there. Infrastructure has come in a big way. And the future remains bright as new investors still view Gujarat as the premier destination. The beauty of democracy is that it rewards such performance.”

The respected British publication, The Economist said in its Jan. 8, 2015 issue, on the eve of the “Vibrant Gujarat Summit” which some 125 countries to attend, that “Gujarat is richer, enjoys faster GDP growth and a greater intensity of jobs and industry than India as a whole.” The state pulls above its weight, the magazine contended. “With just 5% of India’s population and 6% of its land mass, it accounts for 7.6% of its GDP, almost a tenth of its workforce, and 22% of its exports,” The Economist said.

Today, at the national level, the popularity of Modi, remains undiminished, according to survey results brought out as recently as Nov. 15, by Pew Global, an American research organization. It’s February-March poll shows nearly nine-in-ten Indians hold a favorable opinion of Modi, comparable to their view of him in 2015, after a year in office. Roughly seven-in-ten say they have a very favorable view of the prime minister, again similar to public views in 2015. Gujarat’s performance remains a talking point in America, as does the reputation of the man who catapulted that state to global notice reaching the cover of Timemagazine and leading to The Economist naming the state “India’s Guandong”, referring to the Chinese province with a galloping economy.

“If you talk about Gujarat’s development you cannot separate it from Modi,” Ramesh Patel of New Jersey, a senior leader in the Indian-American community and co-founder of the Federation of Indian Associations, insists. Returning to India every year for decades, Patel says, “You did not need TV or radio to tell you how the state has progressed. You see it with your naked eye,” emphasizing he holds no special brief for the BJP.

“Before I came to the United States 51 years ago, there was dynastic rule in Gujarat,” he recalls. He recalls the early 2000s when Indian-Americans stepped up with aid after the natural disasters that struck the state and how over the years, he saw the change as he drove around the state, outside the cities – “industries springing up, rapid transit appearing, housing complexes growing by leaps and bounds, and people look happier,” and while poverty is there, he concedes, so is it in New York City.

Shekhar Tiwari, an Indian-American businessman in Greater-Washington, D.C., and founder and chairman of the American Hindu Coalition, notes that Gujarat and Karnataka remain the two “inherently pro-business” states in India. Modi made Gujarat’s development his main agenda, and the gains made in those years will sustain, Tiwari maintains. “You cannot destroy something so quickly. Once you have tasted good roads, 24-hour electricity, a police under control, you don’t want to go back to chaos,” Tiwari told News India Times.