Narendra Modi Development model of gujarat

Gujarat growth story is about inclusive growth that has its foundations on Modi’s vision, quick decision making, transparency and innovative development initiatives. The three key pillars of the Gujarat model are – roads, electricity and water-supply. Here are what I consider the top 5 achievements of the Modi administration:

1) Transparent, technology-enabled, decisive and largely corruption-free administration:
Modi’s Gujarat has embraced e-governance to slash corruption
Gujarat, under Narendra Modi, has been widely praised for its transparent and largely corruption-free administration. For example, the U.S Congress’s Reporttitled “India: Domestic Issues, Strategic Dynamics, and U.S. Relations  observed, “ Chief Minister Narendra Modi has streamlined economic  processes, removing red tape and curtailing corruption in ways that have made the state a key driver of national economic growth.”.  Economists have placed Gujarat among the least corrupt states in India. [Reference: Corruption in India: the DNA and the RNA]. In fact, the Rajiv Gandhi Foundation too found corruption in Gujarat to be “relatively low”. How has he been able to do this?He took the following steps to promote good governance: [Reference: Economic Times]

• Empowered his bureaucrats: Modi has been able to do this, in part, by   empowering his bureaucrats to take decisions. An Albright Stonebridge Group (headed by former U.S Secretary of State Madeline Albright) report points out how Modi has virtually done away with the process of frequent transfers of bureaucrats, thus giving the administration the stability needed to provide good governance.

• Introduced e-governance and digitized most government services: The Modi administration made heavy use of technology to reduce corruption.  His administration was able to digitize a large part of the procurement process, thus allowing people and companies to submit bids online, thereby bringing transparency to government contracts. Every village in Gujarat has internet connectivity and is part of the Gujarat State Wide Area Network (GSWAN).All basic services such as death certificates, birth certificates, income certificates, applications for government schemes and tax payments are available at e-Panchayats. With so much computerization, the scope for giving or receiving bribes has come down drastically![Reference: Elets Online]

• Promoted inter-departmental co-ordination and transparency: Modi instituted a practice where all his top officials from various departments met regularly in “Chintan Shivirs” to present the progress made in their departments to him and to the other department heads. This gave all administrators a holistic understanding of the issues that the overall state was dealing with. It also promoted a healthy sense of competition among bureaucrats-thus leading to higher efficiency and faster implementation of key initiatives.

2) Sweeping reforms in the power sector:
Modi: Revolutionized the power sector in Gujarat
Electricity is as basic to a country’s economy as food is to a household. Can you imagine living for just one day without electricity? Is it not a shame that India, which calls itself a “growing world power” (no pun intended), cannot supply electricity (power) to its people, especially in summer? “Power-cuts” are still a routine occurrence all over India. The industry and the “aam-admi” alike have been suffering from roiling power-cuts that have become the norm in India. [Reference: FICCI]. The overall country faced a power generation shortfall of 9% of demand between 2007 and 2012.
Amidst all this gloom, there is a bright spot (pun intended this time) -If you were living in Gujarat, you would have had 24-hours power supply around the year! Modi transformed Gujarat into a power-surplus state! [Reference: Wall Street Journal]. While power plants in the rest of India struggled to secure coal and gas for power generation, Gujarat produced 14,000 MW of electricity – surplus of 2,000 MW.[Reference: Times of India].This was not always the case. When Modi took power in 2001, the Gujarat Electricity Board was a mess. Power supply was erratic at best; power theft was rampant and the state electricity board used to bleed money. How did Modi turn the situation around? For starters, he empowered Manjula Subramaniam, a bureaucrat known for her efficiency and made her the chairperson of the GSEB (Gujarat State Electricity Board). She was instrumental in the reform story of the power sector in Gujarat. Here is what the Modi administration did:

•  Re-organized the Gujarat Electricity Board: The Electricity Board was split into 7 different companies – each with a different non-overlapping mandate. Efficient management and political non-interference were the keys to the turnaround of the electricity board. The Electricity Board is now profitable and supplies power round-the-clock!

• Separated agricultural, domestic and industrial electricity feeders: Under the Jyoti Gram Yojana, electricity feeder lines for agricultural use were separated from the feeder lines catering to residential and industrial uses. This allowed the electricity companies to better cater to each of these segments, balance load and measure the exact amount of electricity used for agriculture, thus minimizing the abuse of the differential pricing mechanism. It also allowed the board to supply electricity to domestic users for 24 hours a day while providing high quality (voltage) supply to the agricultural sector for 8-10 hours a day. [Reference: LiveMint] The Jyoti Gram scheme was endorsed by the Planning Commission, which stated, “The programme of feeder separation has to be carried through across the country. Gujarat has achieved very good results by combining feeder separation with an extensive watershed programme for groundwater recharge.”

• Implemented large-scale rural electrification: All villages in Gujarat have access to electricity. In fact, Gujarat became the first state in India to achieve 100% rural electrification.[Reference: Economic Times] This was achieved via the” Jyoti Gram” scheme which was eventually adopted as a flagship scheme for the 12th Year Plan.

• Took effective steps to curtain power theft: Power thefts ranged from 20% (urban) and 70% (rural). Once Modi’s administration realized this, they passed a law to curb power thefts, setup special police stations to clamp down on power thefts and started disconnecting the power connections of those with large unpaid dues. [Reference: Business Today] Imagine the amount of political will needed to accomplish this. If you were the Chief Minister of a state, would you have been able to take on powerful lobbies of industrialists-some of whom could possibly have supported your party? Could you imagine angering powerful people who were blatantly stealing electricity for their homes or industries and risk losing their votes in the next election? Yet, Modi did all of that and transformed the power sector into what it is today.

• Instituted mechanisms to minimize transmission losses: Gujarat’s Transmission and Distribution losses came down from 35.27% in 2001 to a mere 19% today. This is in stark contrast to the national average of 27%.[Reference: Hindu Businessline and World Resources Institute].  This was made possible by a combination of investment in infrastructure, separation of feeder lines, strict monitoring of ground level data and the administrative will to ensure that T&D losses came down.

  3) Agricultural growth story: Perhaps the best known achievement of Gujarat under Narendra Modi was in the agricultural sector. The Gujarat agricultural story has won praise from ASSOCHAM, from Anna Hazare and from Dr. Abdul Kalam who once remarked that all states should follow Gujarat’s example in the agricultural sector. [Reference: Business Today].
Before one goes into the statistics, it is important to remember that the Rann of Kutch, the largest salt-desert in the world, is in Gujarat. I don’t know about what you think, but I don’t exactly expect a state with such a large desert to produce crops and top the country in agricultural growth. Here is what the statistics say- The average agricultural growth in the decade of 2001-2011 was 11.2% p.a., up drastically from 3.3% p.a. in the 1990s. [Reference: Planning Commission]. Compare this to India’s agricultural growth during the 10th Five Year Plan (2002-2007) -> 2.13% p.a. and in the 11thFive Year Plan (2007-2012) -> 3.44%. [Reference: Planning Commission].
It is a no-brainer that the lifeblood of agriculture is water. Gujarat isn’t exactly Cherrapunji and consists mainly of arid and semi-arid regions. [Reference:Department of Agriculture, Govt. of India]. Some economists have classified 70% of the area of Gujarat under the arid and semi-arid categories. How did Gujarat manage to achieve such growth rates despite having barren, arid land and the biggest salt-desert in the world? Here is what the administration did to achieve this:

• Implementation micro-irrigation projects on a gargantuan scale – After Modi took over as the Chief Minister of Gujarat, his administration focused on building micro-irrigation infrastructure in Gujarat.

• • Check dams: Over 1, 00,000 check dams were built under his reign as C.M- over 10 times the number constructed in the 1990s.[Reference: Economist Swaminathyan Iyer of Economic Times and Cato Institute]. These check damns help conserve water and irrigate the vast, arid regions of Saurashtra and Kutch.

• • Drip irrigation: Inspired by the best-practices used in Israel, the Modi administration took steps to ensure the proliferation of drip-irrigation in Gujarat. It fast-tracked subsidies and loans for the purchase of drip-irrigation equipment by farmers. The farmers would pay 5% of the cost of the equipment while the state government subsidized it by 50%. Banks loans were arranged by the state for the remaining 45%. With such a pro-active government, farmers were quick to adopt drip irrigation. The area irrigated by drip-irrigation systems grew from 10,000 ha to 5, 00,000 ha over the last 10 years! [Reference: India Today]

• Implemented top-tier rural electrification – We have discussed the “Jyoti Gram” Yojana for rural electrification at length. Therefore, I shall not go into it again. It will suffice to say that Gujarat’s agricultural growth story would not have been possible without high-quality power supply to its tubewells and pumpsets- something that the “Jyoti Gram” scheme helped enable.[Reference: Business Standard]

• Facilitated diversification into high value and non-food crops- The availability of electricity and water enabled the switch to high-value crops like mango, banana, wheat, fennel and non-food crops like cotton. Farmers were encouraged to adopt BT cotton that produced higher yields per acre than traditional cotton. [Reference: India Today]

• Championed the adoption of new technology and best-practices in agriculture

Soil Health Cards

• • Soil-health cards- Gujarat was the first state to issue soil-health cards to its farmers. These Soil Health Cards (SHCs) were created after the scientific testing of soil for properties such as mineral composition, water-retaining capacity and productivity. The cards are custom-tailored to each farmer’s piece of land and contain information such as the right crops suited to the farmers’ soil, the right amounts of fertilizer, pesticide and water to be used on that soil. Thus, they helped farmers boost the productivity of their land.[Reference:Information Week]

• • Alternate methods of farming and marketing-New methods of farming e.g. contract farming were encouraged. Corporates started getting into agriculture. Corporates were encouraged to start sourcing from farmers directly. This practice is something that large retailers such as Reliance Fresh, Food Bazaar and Spencer follow across Gujarat.[Reference: Economist Swaminathyan Iyer of Economic Times and Cato Institute]

• • Krishi mahotsavs – Annual farmers’ events known as “Krishi mahotsavs” allowed farmers to interact directly with government officials and agricultural experts. These events helped in the proliferation of the best practices in agriculture among the farmer community. They also helped government officials get a better understanding of the problems that farmers face on-the-ground (no pun intended). [Reference: Indian Express]

• • Emphasis on animal husbandry – The state government actively promoted animal husbandry. Intensive animal vaccination drives were conducted at krishi mahotsavs. Animal health camps continue to be organized across the state where animals have health checkups and even dental checkups.

4) Built up massive amounts of basic infrastructure- If there is one area where India is light years away from where it should be, it is infrastructure development. Whether it is roads, airports, ports or even internet connectivity, India lags far behind any developed country and now even developing countries. Gujarat is different, though. Here is why:
Yes, such roads do exist in India (Gujarat)

• Roads- Gujarat has one of the best road-networks in India, with a road network of 74,000km. 98.83% of Gujarat’s villages are connected by “pucca” all-weather roads. Yes, it is true that most of Gujarat’s villages were connected by roads even before Modi took office. So, what did Modi do? Well, he did a great job- that’s what he did. Here is why:

• Improved the quality of roads drastically: Gujarat now has highways that beat international standards. A World Bank Report stated that the International Roughness Index (IRI), a measure of the quality of roads, of highways in Gujarat was better than internationally desirable levels. It also stated that the IRI of Gujarat’s highways ranged from 6 metres per k.m. to 20 metres per k.m in the year 2000 and improved to less than 4 metres per k.m. in 2007. [Reference:World Bank]

• Constructed new roads and highways on a huge scale: Not only has Gujarat spent massively on the construction of new roads and highways, but it has also ended up constructing them – a huge achievement in a country where roads and bridges often exist on paper but not in real-life! For example, as part of the Pragathi Path Yojana, 3,710 km of 2 lane and 4 lane highways were constructed. [Reference: Ernst & Young]

• Took up the widening and upgradation of existing roads: Widening and upgradation of roads not only cut travel times but also give a huge boost to agriculture and industry as they enabled goods and agricultural produce to reach markets, ports and godowns faster. The Gujarat government laid special emphasis on upgrading existing roads to cut travel time between villages and markets, between factories and ports and between towns and cities. For example, urban roads measuring 551 km were modernized and upgraded under the Vikas Path Yojana, rural roads measuring 3,281 km were upgraded under the Kisan Path Yojana.[Reference: Ernst & Young] After the Bhuj earthquake struck Gujarat, the government promptly reconstructed roads measuring 4,095 km.

Guess which state the Kandla port is in.

• Ports- The Modi government put the Public-Private-Partnership model for port development on steroids by cutting red-tape. This model allowed private players to build greenfield ports under the BOOT (Build Own Operate Transfer) framework. Private players were given the power to determine pricing and tariffs at ports and even allowed complete operational freedom. This spurred massive private investment into the port sector. The Mundra port, the Dahej port, the Hazira port and the Pipavav port are all private ports build under this model. They have a combined capacity of over 100 million tonnes p.a. [Reference: Business Standard].The development of ports gave a huge boost to industry as it promoted easy exports and imports.  The result – Gujarat’s port led development model is being studied for emulation by Odisha, Karnataka and even Kerala. The involvement of the private sector has improved the cargo-handling capability of the ports. Gujarat’s ports now handle 72% of the entire cargo handled by Indian ports. Port capacity has more than doubled in Gujarat from 135 million tonnes in 2001 to 284 million tonnes in 2011.

5) Huge fillip to industry in general and manufacturing in particular: You probably already know that Tata Motors, General Motors, Ford and Maruti Suzuki have all setup large manufacturing plants in Gujarat. You probably also know that the actual factories are only the tip of the iceberg, that core-industrial factories spur the growth of ancillary industries (e.g. spare parts, components etc.), create large amounts of employment and raise land prices around the area. But, you probably didn’t know why Gujarat was chosen and to what extent Modi deserves credit for it.  Here is what he and his administration did:
Modi: General Motors, Ford, Tata Motors, Peugeot and more

• Modi personally wooed industrialists to setup plants in Gujarat: One well known incident occurred in 2008, when Tata Motors was virtually chased out of West Bengal by Mamata Banerjee’s agitation against the Tata Singur plant. When Ratan Tata announced in a press conference that the Tatas were pulling out of West Bengal, Modi famously sent an sms to Ratan Tata saying, “Welcome to Gujarat”. Tata Motors responded promptly by setting up the Tata Nano plant in Sanand after investing Rs 2,000 crores. [Reference: NDTV]The plant was up and running in about 2 years!

• He put in place equitable land acquisition policies and facilitated super-fast clearances: Gujarat’s clear land-acquisition policy (formulated by the Modi administration) ensured that acquiring land for factories was easy and beneficial to both farmers as well as to industrialists. The policy dictated that farmers would not only be paid market rates for their land but that they would be paid an additional 10% of the price paid by the acquirer and allotted 1% of the total land acquired for (their) commercial use. [Reference: Business Standard] Farmers who gave up all of their land were also paid an additional Rs 75,000 as compensation. To top all this off, one person from each affected family was provided free industrial training and almost-guaranteed employment at the factory that acquired land. No wonder farmers in Gujarat celebrate instead of agitating whenever a new industrial project is announced in their area.The Modi administration also took a pro-active role in facilitating all the required clearances for the setting up of all factories and plants. [Reference: The Hindu]The administration also gave special concessions to industries to make Gujarat attractive to them.

• Gujarat’s reliable electricity and water supply attracted industries:  Factories cannot run without continuous and stable supply of electricity and water. Gujarat’s excellent electricity situation is well known, as is the fact that water supply is plentiful due to the irrigation projects undertaken.[Reference: The Hindu]

Source : Why I, a Congress supporter in 2009, support Modi for PM in 2014

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