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Gujarat and Growth: Media does a Flip-Flop

In an embarrassing situation to major media houses, they had to “Modi”fy articles published based on GDP of Gujarat state. Business Standard, one of the leading newspaper, had carried an article by A K Bhattacharya today, with some numbers to prove growth of Gujarat is a myth. Many other media houses, including the British Broadcasting Corporation(BBC) wrote articles quoting the numbers mentioned by Business Standard. BBC published a story with title “Is Gujarat’s red hot economy a myth?”.

After Vijay(@centerofright) exposed huge difference in the numbers given in articles, Business standard had to edit the article with a clarification “This column has been modified to incorporate corrected data.” (Read the article here) It lead to a big noise in twitter about the credibility of BBC. BBC had to change the title to Gujarat IS a red hot economy finally.

In the article, GDP of Gujarat is mentioned to be 6.3% instead of the actual figure 10.08%. “It is silly that reputed media houses make mistake in a topic like GDP of Gujarat when Growth of Gujarat is a heavily debated issue.” Many tweeple raised their concern. You can read modified article of BBC here: “Gujarat IS a red hot economy.”

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First version
Is Gujarat's red hot economy a myth?

Is Gujarat's so-called red-hot economic growth a myth peddled by the government of the controversial chief minister Narendra Modi?

Mr Modi, who was blamed for not doing enough to stop the horrific 2002 anti-Muslim riots in the state after the burning of a train carrying Hindu pilgrims, has modelled himself as a no-nonsense economic reformer leading 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.

But a raft of recent articles in the Indian media suggest that that Mr Modi's claims may be overblown.

Examining data on the economic performance of Indian states during a seven-year-period - 2004-11 - AK Bhattacharya, editor of Business Standard, is puzzled by Gujarat's performance.

He finds that its 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 2003.

'Breakout' state?

More interestingly, states like Uttarkhand (13.2%), Bihar (10.9%), Maharashtra (10.7%), Tamil Nadu (10.4%) and Haryana (10.1%) recorded double-digit growth in the seven-year period under review.

None of these states have the kind of hype associated with them as does Mr Modi's Gujarat, which is often called the most business friendly state in India.

Of the five states with double-digit growth, Mr Bhattacharya notes, three are ruled by the Congress party, which has come under fire in the capital for going slow on economic reforms!

So is Gujarat really the "breakout" state that Mr Modi wants the world to believe?

"It has seen the most stable of governments for the last several years," Mr Bhattacharya writes. "And yet, it has seen its growth hovering around 6% for the last seven years." Is there something amiss?

Analyst Salil Tripathi has written about how "of all the hype surrounding Mr Modi, the oddest are some of the claims concerning the state's economic performance". Gujarat, he says, "has done well in recent years, but it lost ground soon after the riots, picking up pace only later".

Mr Tripathi writes about how states like Maharashtra, Tamil Nadu and Uttar Pradesh have bigger economies, and Gujarat actually spends more than it has earned, thus depleting its surpluses.

Gujarat also signed on to a fiscal responsibility law only after five other states did, and 20 states preceded Gujarat in implementing value added tax.

I have written in the past on how Gujarat fares the worst among Indian states in terms of overall hunger and malnutrition - 45% of children there are malnourished, according to the latest Indian Human Development report.

The state also has a poor record in checking infant and maternal mortality. And as journalist Hartosh Singh Bal pointed out recently, Gujarat's ranking among states in terms of literacy (18th) had actually slipped one place, the year Mr Modi took over.

"These figures belie Mr Modi's reputation as an efficient administrator" he wrote. "But you wouldn't know it reading the foreign media."

So is Mr Modi a spinmeister or is there something everybody is missing?


Gujarat IS a red hot economy

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





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