India Inc India Inc: Friday, 06 January 2017 12:55

Gujarat - India's Laboratory of Development

by Manoj Ladwa

Gujarat is a laboratory of a development model that is uniquely home-grown, writes India Inc. Founder & CEO Manoj Ladwa.

A lot has been written and even more spoken of the Gujarat Model of Development that has been praised the world over, including by the United Nations. But in India, the media narrative, disseminated mainly by people who view Prime Minister Narendra Modi – who authored this model as chief minister of Gujarat – solely through the prism of their opposition to everything he does, has been mixed.

Though people on the ground have responded positively to the Gujarat Model, giving Modi a huge mandate in 2014 on the promise of replicating it across India, dominant sections of India's so called 'intelligentsia' have mocked its backers.

According to their narrative, Gujarat is a laboratory of Hindutva, which they define as a narrow ideology based on Hindu majoritarianism where minorities are treated as second class citizens. They have also tried to paint the Gujarat Model as some kind of a political-corporate plutocracy that privileges a few large industrial groups while riding roughshod over the rights of minorities, the poor and the marginalised.

This is nothing but utter fiction.

The fact is that Gujarat is a laboratory – but of a development model that is uniquely home-grown. Just as China’s Deng Xiaoping authored a new development model based on Chinese ground realities that turned that country from an also ran into a world leader, Modi’s Gujarat Model promised to do the same to India. The big difference, however, is that Modi's development agenda is rooted in democratic values, making him ultimately accountability to the electorate at every juncture.
Modi transformed Gujarat into India’s industrial powerhouse by reaching out to the world and by attracting investments from every single developed country. This global outreach is an integral part of the Gujarat Model. At a time when countries across the world – from the US to many other countries in Europe – are pulling up the drawbridge on foreign companies, foreign professionals and foreign capital, India is proactively reaching out to the world. Little wonder that the country received record FDI of $53 billion last year, making it the largest recipient of such investments in the world.

All the government’s flagship programmes – such as Make in India, Start-up India, Digital India, pensions for all, insurance for all, housing for all, the ambitious initiative to light up India with 100 GW of solar power, among others – have their seed in Modi’s tenure as chief minister of his native state.

The parallels are strikingly similar. When he took over as chief minister in 2001, Gujarat was coping with the aftermath of a devastating earthquake. Droughts, cyclones and floods, too, had taken their toll. Gujarat, people said, would take years to get back on its feet.

But less than three years later, Gujarat emerged as the leading Indian state on most parameters of development.

How did Modi do this?

The most important facet of the Gujarat Model of Development was (and is) that it wasn’t the discredited and corruption riddled trickle down model that had been followed since Independence. Instead, it initiated a new paradigm that took into account the views of the people who would be affected by it. By making the people active stakeholders and participants in the development process, the model was able to create a sense of ownership around government schemes that had, till then, been the exclusive domain of bureaucrats and technical experts.

Let’s break for a moment and consider Modi’s bold move to demonetise the high value Rs 1,000 and Rs 500 notes. By all accounts, this has caused tremendous hardship, especially for the poor. But despite this and the best efforts of almost the entire combined Opposition, the ordinary Indian has borne the pain with a smile, confident that their temporary pain will lead to better times in the not too distant future.

How did Modi pull this off? You guessed it. The Gujarat Model of Development! By making every Indian a foot soldier in his fight against corruption, he gave them a stake, a sense of ownership of a scheme that promises to wipe out, or at least substantially curtail, the shadow economy.

Yes, Gujarat is a laboratory, but of a balanced approach to economic liberalism and welfare economics. India was a country without a social security net before the Modi government introduced three affordable medical, life insurance and pension schemes that have been resoundingly welcomed by long suffering ordinary Indians.

In Gujarat, farmers received soil health cards that provided guidance on productivity enhancement under Modi’s annual Krishi Mahotsav (farmers) initiative. This and various other programmes led to never seen before rural prosperity in Gujarat.

As Prime Minister, Modi has introduced the Pradhan Mantri Fasal Bima Yojana (Crop Insurance Scheme) wherein farmers pay between 1.5 per cent and 2 per cent premium to insure their crops against failure. The plan: cover 50 per cent of all farmers within 2-3 years.

Then, his crusade against corruption and his achievement in stamping out high level corruption from the corridors of power in Delhi and using technology to root out corruption lower down the government’s hierarchy are based on his experience in Gujarat – and the Gujarat Model of Development.

Two important touchstones of this model are Sabka Saath Sabka Vikas (development for all) and the Antyodaya Yojana, a reach out to the last person in the queue – and both these ideas are the cornerstones of that same model.

These are just a few examples taken from the laboratory that is Gujarat. But the crucial question is: can this model, that has served Gujarat so well, be replicated across India?
The canvas, of course, is far more massive and the complexities unimaginable. But given the success of the Jan Dhan scheme (a financial inclusion programme that provided bank accounts to 260 million unbanked families) and the initial success of others like the scheme to provide cooking gas cylinders to the poor whilst encouraging the less needy to relinquish theirs, there is no reason to believe that the Gujarat Model, honed in the laboratory that is Gujarat, cannot be rolled out successfully across the country.

On the eve of the 8th Vibrant Gujarat Summit, let us celebrate this uniquely Indian model of development that is being feted all over the world.

Manoj Ladwa is the founder of India Inc. and chief executive of MLS Chase Group @manojladwa

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