Lessons from Gujarat model of development

At present, Gujarat is among the leading states of India in almost all aspects especially industry and manufacturing. The state accounts for about 8.3 % of all India Gross domestic
products(GDP), whereas its population is just 5.2 % and area is 6.0 % of the country.

The growth story of the state is the phenomenon of last 15 years or so as its share in all India GDP was just 6.4 % in 2001 and 1990. In last decade (2012-24), the growth of state GDP at
constant price has been about 8.5 % as compared to 5.6 % of all India. The per capita income in the state is about 60% higher than all India average. The dynamics of the buzzing economy
are discussed to bring out lessons for the other states.

The composition of Gujarat’s GDP is about 20 % from primary sector, 44 % from secondary sector (manufacturing 35%) and the rest 36 % from services as compared to 18 %, 27  (Manufacturing 17%) and 55% shares of these sectors in all India GDP. It is to be noted that Gujarat alone accounts for about 27% of our total merchandise exports and 20 % of all India’s merchandise trade.

The state is exporting refined petroleum products, chemicals &
pharmaceuticals, gems & jewellery, ceramic & sanitary items and castor oil. About 40 % of ocean cargo is handled by ports of Kandla and Mundra in Gujarat. Almost 100 % India’s
ship-breaking activity is in Gujarat at Along Sosiya Yard in Bhavnagar of Gujarat and its dismantled items are traded all over India.

In addition to exports to other countries; Gujarat
market the above commodities to to other states of India. Besides, the refined edible oils, milk, processed salt, groundnut, castor oil, machine goods like metal valve, pumps, brass
parts, etc sold to other states. Gujarat is the biggest producer of cotton fabrics and it is known as ‘denim capital of India’. Completion of Narmada Dam in 2017 gave big boost to its
agriculture in 15 districts, resulting in 9.7 % growth rate compared to National average of 5.7%.

The question arises how the GDP of Gujarat has increased at annual rate of about 12% 9(current prices) over the last 15 year and it has become India third largest state economy of 30 lakh crore. Broadly the drivers of accelerations are aggressive industrialization, infrastructural expansion, rapid Narmada dam supported agriculture and proactive policy reforms of the state. Gujarat provided land at affordable rate to facilitate shifting of Tata Nano project from Singur in West Bengal to Sanad in Gujarat in 2008 and many operations of Maruti to Sanad from Gurgaon Haryana in 2014. Similarly, it is reported that Tata Airbus-aircraft facility, Vadodara-Foxconn Semiconductor and Renew solar panel Project originally proposed in Maharashtra shifted to Gujarat due to better facilities.

Gujarat is also attracting the highest share of FDI in India in recent years relegating Maharashtra and Karnataka from
their first and second position. The main FDI supported projects are in semiconductors, defence manufacturing, smart infrastructure and renewable energy of windmills and solar
panels.

Over last 15 years, Gujarat has received massive central assistance for high speed rail including bullet train & Vadodara Mumbai expressway, green energy including expanded
interstate Transmission to sell in other states, industrial corridors & hubs for semiconductors, Jamusar bulk drug park, Dholera special investment Region(920km), gift city, etc.. Even central investment is made in name of 2030 Common Wealth games in Ahmadabad.

Even tourism in Gujarat is promoted with advertisement by centre and some states are sponsoring pilgrimage visits to Gujarat with the state funds. All these have boosted logistic efficiency and economic connectivity.

Above all, improved governance has reduced crime rate in Gujarat over the last decade or so. To illustrate rate of crime related to violence, kidnapping, rape and murder are
much less than the all-India average, moreover there is reduction in the rate over last two decades.

The other states may draw lessons to improve law and order, arrange land for industrial projects, upgrade ease of starting the new units especially in manufacturing for lasting development and employment.

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