Gujarat IS a red hot economy

 
Poster of Mr Narendra Modi Mr Modi has become synonymous with Gujarat's growth

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This morning, a piece in Business Standard, one of India's most respected newspapers, caught my eye.

Examining data on the economic performance of Indian states during a seven-year-period (2004-11), AK Bhattacharya, editor of the newspaper, wrote that he was puzzled by the data on Gujarat.

Gujarat is ruled by Narendra Modi, one of India's most controversial politicians, who has modelled himself as a no-nonsense economic reformer of one of India's fastest-growing states.

In March, a senior minister of his cabinet told me that Gujarat has been recording scorching double-digit growth, prompting even The Economist magazine to call it India's Guangdong. "Modi Means Business" said Time magazine when it put him on the cover recently.

Mr Bhattacharyya, however, wrote in Wednesday morning's edition of his paper that Gujarat's economy grew by 6.3% annually during this period, up from average growth every year of 3.6% - a relatively low base - in a 10-year period ending in 2003.

"It has seen the most stable of governments for the last several years," Mr Bhattacharya wrote. "And yet, it has seen its growth hovering around 6% for the last seven years."

I wrote a blog post with a link to the piece wondering whether Gujarat's red-hot economic growth was an invention of the foreign media which has been written extensively about Mr Modi's reformist government.

I had also wondered whether there was something amiss with the data on Gujarat in the Business Standard article.

Indeed there was - and I have updated the blog post to reflect this.

Since I wrote my earlier version, Mr Bhattacharya has carried out some crucial corrections in his Business Standard article - the modified version appeared on the newspaper's website later in the day.

He has written that Gujarat actually clocked a growth rate of 10.08% annually during a seven-year period beginning 2004-05. That is obviously far better than the 6.3% growth that he mentioned in the earlier version.

He has also taken out a paragraph in which he wrote: "It (Gujarat) has seen the most stable of governments for the last several years. And yet, it has seen its growth hovering around 6% for the last seven years."

Double-digit growth, of course, puts Gujarat in the league of the high growth states in India. The doubts that I had about it after reading Mr Bhattacharya's piece have now been clarified by the writer himself.

He writes in the modified piece:

"… which are the states that clocked double-digit growth in its gross state domestic product during the seven-year period from 2004-05? Only six states will make that list. On top of that list is Uttarakhand at 13.2%, followed, as expected, by Bihar at 10.9%, Maharashtra at 10.7%, Tamil Nadu at 10.4%, Haryana at 10.1% and Gujarat at 10.08%."

In the amended version Mr Bhattacharya also adds that "Gujarat's story is well-known and shows what sustained growth-oriented policies can do to a state's economic fortunes".

There is a vigorous debate on whether such high growth is delivering adequate social development in Gujarat. It is a point which many believe is valid is for the whole of India. But Gujarat, going by the data, is indeed a red-hot economy.

 
Soutik Biswas, Delhi correspondent Article written by Soutik Biswas Soutik Biswas Delhi correspondent

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