India's 'Model' State — Is It Gujarat? Or Tamil Nadu? Or Neither?

The idea of a "model state" in India captures the imagination of policymakers, citizens, and media alike, symbolising a region that excels in governance, economic progress, and social welfare.

A model state can be broadly characterised by three key dimensions:

• Economic Vibrancy: This includes high growth rates, robust industrial development, and an environment conducive to ease of doing business.

Several Indian states are often labelled as "model states" in public discourse, each excelling in different areas. Gujarat, Tamil Nadu, Kerala, and Maharashtra are frequently cited as examples.

Human Development Index (HDI)

The Ministry of Statistics and Programme Implementation (MOSPI), through its National Statistical Office, published a working paper in 2021 titled "Gendering Human Development: A Working Paper for Computing HDI, GDI, and GII for States of India," which computes the Human Development Index (HDI), Gender Development Index (GDI), and Gender Inequality Index (GII) for India and its states/union territories for 2011–12 and 2017–18, using the methodology of the UN, though not fully comparable to it.

The HDI is calculated by geometrically averaging three indices: health (proxied by life expectancy), education (proxied by mean and expected years of formal education for the population), and income (per capita state domestic product).

The HDI section of this report underscores India’s steady progress in human development from 2011–12 to 2017–18, with a national HDI score rising from 64 to 67 (indexed to 100), due to improvements in life expectancy, educational attainment, and per capita income over the period.

Based on this index, some modifications (using NSDP per capita instead of GSDP per capita, etc) and updating using the latest available data, a similar index for HDI was created for some of the key large states for 2023–24. The India score increased to 71 (not to be compared with UNDP’s HDI index for India), with Kerala leading with 81 and Maharashtra and Tamil Nadu following with 79. Bihar does quite poorly with a score of 59.

Below is a summary of the results.

SDG India Index by NITI Aayog

The SDG India Index 2023–24, released by NITI Aayog, is a tool to measure and track India's progress toward the United Nations' Sustainable Development Goals (SDGs) at national and state levels.

Launched in 2018, it evaluates the performance of all Indian states and UTs across 16 SDGs using 113 indicators aligned with MOSPI’s National Indicator Framework (NIF). It gives importance to human development indicators like ending poverty, zero hunger, quality education, gender equality, and climate action.

Kerala and Uttarakhand lead with a score of 79, followed by Tamil Nadu (78) and Goa (77). Gujarat scored 74, higher than the national average of 71, while Bihar (57) and Jharkhand (62) performed poorly.

However, one can argue whether it gives social sector indicators primacy over economic or fiscal indicators, which are also crucial for a state.

CareEdge State Rankings 2025

The CareEdge State Rankings 2025, released by CareEdge Ratings, evaluates Indian states across seven pillars—economic, fiscal, infrastructure, financial development, social, governance, and environment—using 50 indicators.

The report, in its second edition, excludes Union Territories and categorises states into Group A (large states) and Group B (northeast, hilly, and small states). Maharashtra (score: 56.5) leads the rankings among large states, excelling in financial development, economic, fiscal, and social pillars.

Western (Maharashtra, Gujarat) and Southern (Karnataka, Telangana, Tamil Nadu) states dominate the top five. While there are differences in the top-ranked states, this report has a similar finding as NITI Aayog when it comes to the states performing poorly, with Bihar being the lowest ranked among large states and Jharkhand being the second lowest.

In contrast to the NITI Aayog’s SDG Index and HDI, “a higher weight has been assigned to the Economic and Fiscal category as better performance on these pillars has a trickle-down effect on the state’s overall performance.”

The Human Development Index (HDI) and the NITI Aayog SDG India Index place significantly higher weight on human development and social indicators, and a smaller proportion of weightage to economic indicators, while giving very little to no emphasis to fiscal factors.

In contrast, the CareEdge report prioritises economic and fiscal indicators, assigning relatively low weight to social measures.

A summary of the scores as per all three reports for some of the key states and an average of the three indices is shown below.

Broadly speaking, the southern states (except Andhra Pradesh) and the western states of Maharashtra and Gujarat have average performance scores ranging from 67 to 69 across combined development indices.

While Kerala stands out with very high human development indicators, its economic model—characterised by a relatively low industrial base and heavy dependence on inward remittances (which account for nearly 20% of India’s total remittances despite Kerala’s population being just about 3%)—makes it less suitable to be considered a comprehensive model state.

In contrast, states like Gujarat, Karnataka, Maharashtra, Tamil Nadu, and Telangana demonstrate a more balanced mix of economic vibrancy, fiscal management, and social progress, making many of their policies and practices worthy of emulation.

Recently, a critique of the Gujarat model and its comparison with Tamil Nadu’s economic model by Dr. Christophe Jaffrelot has acquired prominence. His articles on certain digital news platforms and a paper co-authored with Vignesh Rajahmani and Neal Bharadwaj highlight some key points about Gujarat and contrast it with Bihar and Tamil Nadu.

More than a decade ago, Gujarat was hailed as a powerhouse with some of the best infrastructure in India and impressive economic growth, especially when many other regions were struggling with low growth, fiscal mismanagement, and poor infrastructure. Narendra Modi, as the architect of this "Gujarat model," played a significant role in shaping its image, which contributed to his rise to the Prime Ministership.

Hence, it is important to look deeper into some of the claims made by Dr. Jaffrelot about Gujarat and Tamil Nadu.

While we will examine some specific claims to either refute or add additional context, it is important to clarify at the outset that Dr. Jaffrelot acknowledges Gujarat’s high economic growth and infrastructure development. However, he attempts to portray Tamil Nadu as a more egalitarian and well-rounded state compared to Gujarat, which he characterises by higher inequality and poverty rates.

Claim 1: Gujarat and Tamil Nadu had similar Gross State Domestic Product (GSDP) growth rates in 2023–24 and their per capita incomes are quite close.

What it misses: Over the longer period from 2011–12 to 2023–24, Gujarat’s per capita Net State Domestic Product (NSDP) grew at an average annual rate of 6.9%, while Tamil Nadu’s averaged 5.6%. Both states, however, significantly outperformed the national average growth rate of 4.7% during the same period (Source: S1). Other large states such as Odisha, Karnataka, and Telangana have also recorded faster growth than Tamil Nadu.

Claim 2: “...if we refer to World Bank criteria, in 2023, the proportion of people living below the poverty line (€3.02 a day) in our three states was, respectively, 5.8 percent in Tamil Nadu, 21.8 percent in Gujarat, and 23.3 percent in Bihar.”

What it misses: The chart below shows the latest available consumption-based and multidimensional poverty rates (MPI) for these three states and India as a whole. While Tamil Nadu performs exceptionally well on poverty-related indicators, Gujarat also fares significantly better than the national average as well as Bihar. Kerala leads in most social sector indicators, with Tamil Nadu catching up quite well in recent years. Although Gujarat is doing better than the national average, there is still much work to be done. (We will discuss this aspect in more detail later)

Claim 3: “In 2022–23, the average daily wage for men working in rural areas as ‘non-agricultural labourers’ was much higher, at Rs 481.50, in Tamil Nadu than in Gujarat (Rs 273.10) – a figure that is the lowest in India, Madhya Pradesh excepted.”

What it misses: While Gujarat has the lowest daily wages, the proportion of daily wage earners (also called casual workers) among its total paid workforce is just 16%, compared to nearly one-third in Tamil Nadu and one-fourth across India as a whole, according to the Periodic Labour Force Survey (PLFS).

Claim 4: “In 2015–16, Tamil Nadu had 4.95 million SMEs, compared with 3.32 million in Gujarat.”

Additionally, the number of MSME units is marginally higher in Gujarat, with 4.6 million units versus 4.5 million in Tamil Nadu. Furthermore, while casual workers in Gujarat earn much less, unorganised sector regular workers (those with salaries) in Gujarat earn nearly 20% more than their counterparts in Tamil Nadu—INR 1.73 lakh per year compared to INR 1.45 lakh. This wage level is among the highest in large Indian states, with only Kerala and Telangana slightly ahead at INR 1.76 lakh.

Claim 5: “Gujarat is clearly a success story in terms of growth, but the wealth that has been generated has been captured by a minority, mass poverty remaining prevalent, whereas Tamil Nadu’s society is less unequal, and benefits from a similar growth rate.”

What it misses: This is at the heart of Dr. Jaffrelot’s critique, and all the earlier claims lead to this. Since some of those claims are either incorrect or half-truths, as a final check, one can directly address the inequality issue by looking at the Gini coefficient for Gujarat and Tamil Nadu from the Household Consumption Expenditure Survey (HCES) 2023–24. The Gini coefficients for rural and urban areas in Gujarat and Tamil Nadu are close to each other, suggesting that the degree of inequality in these two states is comparable.

Some Key Issues with the Gujarat Model

One must acknowledge that some of Dr. Jaffrelot’s critiques on Gujarat’s underinvestment in social sectors are valid. There are at least two key areas where Gujarat needs to significantly improve. Tamil Nadu, on the other hand, performs extremely well in these parameters and may be among the best in the country.

Nutrition: As per the National Family Health Surveys (NFHS), the proportion of stunted children in Gujarat stands at 39%, significantly higher than Tamil Nadu’s 25%. Surprisingly, the all-India average is lower than Gujarat’s at 35%. In this regard, Gujarat’s situation is almost as concerning as Bihar’s, which has a stunting rate of 42%. The pattern is similar for underweight children as well.

Looking back to NFHS-II (1999–2000), there was already a roughly 10% gap between Tamil Nadu and Gujarat in these nutritional indicators, with Tamil Nadu performing better even then. However, this gap has widened over the years. Similarly, during the same period, Gujarat had about a 10% advantage over Bihar, but Bihar has since caught up, indicating that Gujarat’s progress on nutritional parameters has been quite poor over the decades.

Some Key Issues with the Tamil Nadu Model

Fiscal management: Outstanding liabilities provide insight into how well a state manages its budget over the long term, as they reflect the accumulation of debt over time. As shown in the chart below, Gujarat began in 2006–07 with liabilities even higher than the national average of all states combined. However, by 2022–23, it has become one of the best-managed states fiscally.

Tamil Nadu, on the other hand, performed quite well in 2006–07 but has gradually slipped into a category of states with weaker fiscal management. Additionally, when looking at the total accumulated losses of electricity distribution companies across India, Tamil Nadu’s TANGEDCO accounts for nearly one-fourth of these losses.

Gujarat’s stronger fiscal position is likely to give it an advantage for faster growth over the medium term. It is hoped that Gujarat will use some of this fiscal space to address nutritional deficiencies in the state.

Political context: Jaffrelot’s critique of Gujarat’s model implicitly targets its political leadership but overlooks the dynastic politics prevalent in Tamil Nadu. Moreover, a state whose politics have, at times, conflicted with the idea of national unity cannot truly be considered a model state. Such a stance would go against the very spirit of our Constitution’s framers as well as our rich cultural heritage.

Similarly, other states like Maharashtra, Telangana, and Karnataka face their own challenges. For example, Maharashtra’s economic growth has lagged the national average from 2011–12 to 2023–24. Meanwhile, despite high economic growth and significantly higher per capita incomes, nutrition indicators in Karnataka and Telangana remain only around the national average.

There is no one-size-fits-all model

Jaffrelot’s study rightly points out Gujarat’s social shortcomings and praises Tamil Nadu for its human development indicators. However, it tends to undervalue Gujarat’s economic achievements and purports to exaggerate its inequality and relatively poor health indicators using selective data.

Given India’s vast diversity, it’s clear that there is no one-size-fits-all model. Instead, policymakers should focus on fostering inclusive and sustainable growth that respects the unique needs and contexts of each state.