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From: "sanjeev nayyar"
http://blogs.economictimes.indiatimes.com/policypuzzles/entry/reporting-hype-over-the-gujarat-hype – by Bibek Debroy
It is curious how Gujarat’s growth story always raises a controversy. This is all hype. There is no substance in it. “Hype” is an odd kind of word to use. “Hype” suggests something that is the result of a media blitz, based on advertising and PR. It isn’t real. Surely, that can’t be a serious argument on growth figures, interpreted as growth in State domestic product (GSDP). GSDP is an objective variable, or should be, especially if one uses Central sources, rather than data that come from a State government that have not been Centrally-vetted, so to speak.
Arguing about composition of growth is a completely different matter. For instance, has it tended to accentuate inequalities, interpreted as personal inequality or geographical (spatial)? Has it been based on industry (not just manufacturing) and has agriculture suffered? Has it led to increases in employment, on quantity, as well as quality and reductions in poverty? Has it led to improvements in social sector outcomes and has that been sufficiently broad-based? These are important questions and need discussion, both in the Gujarat context and outside Gujarat. But let’s ignore those for the moment and concentrate on growth figures alone. Those other points can be taken up later.
ET itself has carried a story on Gujarat’s growth (1st July) and it has raised many of these issues. As I have said, I will talk about these other points later, in subsequent blogs. For the moment, let’s focus on growth. ET carries a graph and a tagline, “The numbers tell the story” on growth numbers. While GSDP growth ought to be purely factual, there are different ways to slice the numbers. For instance, I can track a State’s growth record over a period of time, or I can make comparisons with other States.
The ET story does both and slices Gujarat’s growth into three periods, before 1979 (pre-reform), 1980-92 (partial reforms) and 1992-2010 (post-stabilization). For Gujarat, based on Sebastian Morris numbers, we have Gujarat growth figures of 4.44% for before 1979, 4.35% for 1980-92 and 6.9% for 1992-2010. For the moment, ignore comparisons with other States. The question to ask is the following. In inter-State comparisons, or even in inter-temporal tracking, should one take the 1992-2010 period as an integrated whole? For example, across States, we know that performance in decade of 1990-s has been different from 2000-s decade.
We have some natural cut-offs based on Plan periods and Planning Commission figures. For Gujarat, these show the following – average growth of 6.1% during 7th Plan (1985-90), 12.9% during 8th Plan (1992-97), 2.8% during 9th Plan (1997-2002), 10.9% during 10th Plan (2002-07) and an expected 11.2% during 11th Plan (2007-12). Admittedly, 11th Plan figures are still not final, from Planning Commission sources, so we have to go with “expected” numbers. This suggests to me that the ET slicing is misleading. Yes, Gujarat had high growth during 8th Plan. But yes, growth slowed during 9th Plan and yes, growth has picked up since 10th Plan.
Notice, in this, one isn’t getting into hypotheses about what caused growth pick-up, whether it was one particular CM or not. That’s a subsequent question and at the moment, one is just in the realm of facts. In the ET slicing, Gujarat’s growth is compared with States like Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu and Delhi. Delhi is a peculiar kind of State and it is a moot point whether comparisons should be made between small States and UT-s and larger States. The answer is probably in the negative. Let’s stick to the other fourth and given the ET slicing, the proposition is that Gujarat hasn’t done remarkably well compared to those other four States.
Here is what Planning Commission tells us. During 10th Plan, Gujarat’s 10.9% compares with 8.6% for Maharashtra, 7.7% for Karnataka, 8.3% for Andhra and 8.5% for Tamil Nadu. With this kind of slicing, there is no comparison with the States identified, though those are high growth States too. During 11th Plan, Gujarat’s 11.2% compares with 9.1% for Maharashtra, 11.2% for Karnataka, 9.5% for Andhra and 7.4% for Tamil Nadu.
Karnataka is comparable, but not the others. Because Gujarat’s growth story is so very controversial, one therefore needs to be careful in making comparisons. While growth rates are objective, or should be, there can be subjectivity in choosing arbitrary time-lines, of any variety. If one accepts the growth story, and the improvement since 2002, one can then go on to discuss the other questions, which are much more interesting.
Also read earlier articles on Gujarat’s performance
1. What works and what doesn’t work in NM’s Gujarat -
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/what-works-and-what-doesnt-in-narendra-modis-gujarat/articleshow/14533602.cms?curpg=12
2. Electricity Lessons from Gujarat MINT editorial - http://www.livemint.com/2012/06/17210346/Views--Electricity-lessons-fr.html
3. Agriculture be like Gujarat by Shankar Acharya - http://www.businessstandard.com/india/news/shankar-acharya-agriculture-be-like-gujarat/442588/
4. Gujarat sets the Agenda for Energy Sector by Shashi Shekhar - http://dailypioneer.com/columnists/item/51653-gujarat-sets-agenda-for-energy-security.html
5. India’s Guandong says Economist - http://www.economist.com/node/18929279?story_id=18929279&fsrc=rss
6. Good ideas from Gujarat are neither communal or secular by Sumit Gulati - http://blogs.economictimes.indiatimes.com/Sumitup/entry/lessons-from-gujarat-good-ideas-not-communal-or-secular
Warm Regards
sanjeev nayyar
https://twitter.com/#!/NayyarSanjeev
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