A Statistics Hitjob to Deny the Gujarat Development Story

 A rejoinder to an article titled “Gujarat: Myth and Reality” authored by Dr. Bhalchandra Mungekar, a Congress-nominated Rajya Sabha MP and former Member of Planning Commission.

With much grudge, one must hand it to Congress. How can it convince well-educated and qualified professionals to twist facts, take selective data and present a skewed picture when the truth stares on their face otherwise, clearly as election propaganda?! May be this is part of the price that is expected by Congress from its “nominated members” to the “house of the elders”!

The article takes a leaf from the famous words in Mahabharata – “Ashwathama Athaha Nakunjaraha” (Ashwathama dead, the elephant)! While the statements made per se in the article may not be outright lies, the article clearly obfuscates important information to present a misleading picture.

Random periods for comparison

The article uses random periods for comparison, and given the author’s title as “former member of planning commission” we cannot ascribe this random period usage to non-availability of data or oversight but plain and simple obfuscation! Sample these:

Growth rate used is till 2010, whereas 2011 actuals and 2012 estimates are very much available! When these two years are included, Gujarat tops the list of all major states in terms of aggregate growth rate between 2001 and 2012. But the author chooses to end comparison till 2010 probably because it suits his purpose!

• Industrial growth rate was chosen until 2009, leaving 3 full recent years!

• For Life Expectancy at Birth, the date chosen in 2006. For Mean Years of Schooling, it is 2005. For HDI, it is 2008. And in none of these cases, temporal comparison over 2001 data is made. That is probably because most of these parameters were weak in Gujarat in 2001 itself, and has shown decent improvement, though far from levels of Kerala.

• Share of population below poverty line – data used in this column by the author was of 2004-05, whereas in the same source (the author’s previous employer Planning Commission’s data, of course!), 2009-10 data is available which shows a very different picture! Even worse, the column doesn’t mention that this is 2004-05 data, as it goes against the grain of the column title!

Just to set the record straight, latest year figures are available for all the above-mentioned parameters (except HDI), which the author (deliberately?) chose to ignore!

Inappropriate selection of parameters

CD Ratio: The desperation of the author to berate Gujarat is evident when, of all the parameters on earth, the author chose to compare Credit-Deposit ratio (CD Ratio) of banks, and there too, gives absolute comparison as on date, instead of comparison over a period. CD Ratio, even at the level of a bank, or pan-India for banking system, is a sub-optimal parameter to measure a bank’s efficiency that was in vogue in 1960’s and 70’s. Now, with advanced measurement techniques emerging in line with Basel II requirements, this is an outdated parameter to measure anything useful!

FDI and job creation potential: Similarly, on FDI, the author chooses to highlight the quantum of MoU signed and the announced potential employment creation from these MoUs, to show Gujarat in bad light as though the investment that comes into this state are inefficient in terms of employment creation! This parameter itself is a dubious one, as the employment potential at the time of signing MoUs is anybody’s guess! Even here, the data on Gujarat seem grossly erroneous. The author claims “During 2006-10, Gujarat signed MoUs worth Rs 5.35 lakh crore with potential of 6.47 lakh jobs” which is clearly wrong. Just in a single event – the 2009 Vibrant Gujarat, as per the State Govt. press release (for all states, the sources are respective state press releases) “the two-day Vibrant Gujarat Global Investors’ Summit 2009, which concluded in Ahmedabad on January 13, attracted promised investments of over Rs. 12 lakh crore. More than 8,500 Memoranda of Understanding were signed between the State government and the intending investors. These have the potential to create over 25 lakh additional employment opportunities”.

Human Development Index: The author thunders with confidence thus: “With respect to Human Development Index (HDI), Gujarat’s story is devastating. The HDI for Gujarat, in 2008, was 0.527 and it ranked 10th among major states”. What is left unsaid is, the HDI rank of Gujarat was no better in 2001! And the improvement of HDI in Gujarat is a shade better than national average (Link Refer Page 302)

When you have a large data set in front of you, the figures you choose to use should be decided based on the importance of the parameter and the consistency of measurement. As seen above, this article fails on both.

The Unsaid Part

Now, let us examine the unsaid parts of the Gujarat story.

Quality of Growth: The real issue in the growth rate of GSDP (Gross State Domestic Product i.e. GDP of the state) is not the absolute growth rate itself (which in any case differs only in the last two decimals among the top states, when compared over the entire period). The real issue is the quality of this growth. Agriculture sector, as is widely known, is the largest employer in India and in that sense, is the most “inclusive growth” possible. When measured over the last 10 years, the agriculture growth rate of Gujarat is higher than every other state in the country!

Rural Poverty Line: The drop in share of population below poverty line in rural areas between 2004-05 and 2009-10 has been remarkable in Gujarat at 13% reduction (from 39% to 26%), which puts Gujarat among the top few states in this parameter. (Tendulkar methodology, compared between 2004-05 and 2009-10, Page 45 of 232, Planning Commission Report). This is a natural corollary of the earlier point about the quality of GDP growth, but remains largely an untold story so far.

Quality of Governance: The Gujarat growth story is more about providing effective governance, which the author has neatly sidestepped! At a time when corruption scandals emerge like mushroom in a rainy season across every major state – be it Adarsh in Maharashtra, or Jagan Reddy in Andhra Pradesh or CWG in Delhi, Gujarat has remained largely unscathed with no major corruption scandal emerging, which is no mean feat!

Basic infrastructure: The basic infrastructure viz. Power, Water supply and public transport are again integral part of the Gujarat story, which the author has not even touched upon! Gujarat is among the very few Power surplus states in the country today, despite having such high levels of industrialization. The water infrastructure in Gujarat has improved significantly in the last decade because of the number of initiatives taken by the government, with the involvement of local panchayats (Data reference not readily available, but anecdotal evidence confirms this. Read Ms. Meera Sanyal’s blog on this after on-ground visits to Mehsana and Sabarkantha districts). Ahmedabad BRTS is a good public transport success story comparable to international standards, which finds no mention in the author’s column.

The list can go on.

One must also not forget that Gujarat has achieved all this growth despite the state being the ONLY major state that has a prohibition on manufacture and sale of liquor, which is the largest source of revenue for all major states (the compensation in lieu of this loss from Central Government is a pittance).

There are more anecdotal stories and research papers that provide unbiased analytical opinion on Gujarat’s development. It is NOT my assertion (or for that matter, most balanced analysts’) that Gujarat has already reached pinnacle of development comparable to Scandinavian countries! But to deny the growth that the state has achieved in the last decade, through twisting statistics reeks of cheap stunt for electoral purposes!

Am sure this is not a stray column and more such hitjobs will be manufactured to counter Gujarat’s development until the state elections! May be the intended audience is NOT the voters in the state who live the reality everyday but votes in the rest of India, to prevent the ascent of the CM to become PM someday!