When riots hit Gujarat, nobody ever imagined it would again emerge, stall tall and surpass other states in the run for becoming next Silicon Valley. A sneak peak at the growth of Gujarat – Nidhi Gupta
Five years ago, few would have imagined that the state of Gujarat (on the western shores of India) could bounce back as a major destination for global investment. The state had just been ravaged by one of the worst communal carnages – beginning with the torching of two coaches of a train filled with pilgrims. In retaliation, the state experienced some of the worst riots and bloodbaths the country has witnessed. Many thought that Gujarat would be regarded as a pariah state.
Gujarat had achieved 35% of its prosperity before Modi became the Chief Minister of Gujarat. Besides, if taken into account the industrial development of the state, it is evident that between the periods of 1960– 1990 Gujarat had already established itself as a prospering state and was well ahead of the other states in terms of industrialization. Gujarat today is the hub of industrialization and the state of Gujarat happens to be the first choice amongst the potential corporates, industrialists and investors. Gujarat had been leading in industrial sectors like petrochemicals, pharmaceuticals, engineering, textiles, chemicals, dairy, cement, ceramics and gems and jewelry, to name a few. From 1994 to 2002 (the post–liberalization period) Gujarat’s State Domestic Product (SDP) had touched an average of 14% per annum. While the skeptics may argue that a comparison with China is basically pointless because the country as a whole is far ahead of our nation, a fact just to highlight Gujarat’s economic development would be that, Gujarat’s automobile industries sector and the diamond polishing sector is almost at par with the China’s Guangdong industrial province. A survey conducted by the Associated Chambers of Commerce and Industries of India reconfirms the fact that, Gujarat has recorded the highest of investment propositions both in value and numbers amongst all other states of India in the last five years. Gujarat is the present day choice of international giants like the Tata Group and Ford. So Gujarat stays ahead while the other states of the nation are still plagued by low investments and unemployment. As aptly commented by Prashant Agarwal, the Mumbai-based columnist for the business newspaper Mint, “I meet guys who marvel at the efficiency of Gujarat. The red tape, the bureaucracy, are gone. Gujarat is open for business. On the social front, sure more can be done, but that’s true anywhere (in India).”
The NSSO survey data of 2009–2010 claims that Gujarat has an employment problem which in reality is ridiculous. Gujarat, as per the survey reports of Labor Bureau of India, 2012, happens to record the lowest unemployment rate of only 1% as compared to all the other states of the nation, where the national unemployment rate is estimated at 3.8% by the same report. The short claim for the MGNREGA in the state is a yardstick of the significantly high employment rates among the rural poor. It needs to be mentioned here that, Gujarat also records the highest employment rate among urban women as compared to the other states of the country.
In fact, the estimations of the Human Development Index which features Gujarat in the fifth position after Kerala is also grossly misleading. Take for instance the issue of the population of the state below the poverty line. Planning Commission Survey data confirms that Gujarat has recorded a sharp curbing of poverty from 31.6% in 2004–2005 to 23% in 2009– 2010. The steep fall in the rural poverty is also commendable and exemplary, from 39.1% to 26.7% in the last five years.
Narendra Modi would not have thought of Gujarat International Finance Tec-City (GIFT) as the testbed for future city technologies, but his dream project in Gandhinagar may well have this interesting spillover. Work on the proposed Rs 78,000-crore nano city has now started, and the first occupant may move in by March.
GIFT is an under-construction central business district between Ahmedabad and Gandhinagar in the Indian state of Gujarat.
Question is Why Gujarat?
On August 14, 2007, India’s Central Bank released a report showing how the state of Gujarat had mopped up Rs731.7 billion (US$18 billion) of the Rs2,836 billion invested in India during 2006-07. Gujarat, thus attracted almost 26 percent of all investments made in the country – and trounced the erstwhile leader, the state of Maharashtra, which accounted for only 8.6 percent of the funds. But avid observers of Gujarat weren’t surprised. And they believe that economi c growth in this state will continue to accelerate in coming years. After all, seldom has a community been as closely identified with the development of business and commerce in a country as have the people of Gujarat in India. Commonly referred to as Gujaratis, they have been at the forefront of almost every financial innovation in the country. Many people note that the state of Maharashtra remained India’s industrial leader for several decades because Gujarat was part of the undivided Bombay Province under British rule and part of Greater Maharashtra for more than a decade after independence. Only when the state was bifurcated along linguistic lines into Maharashtra and Gujarat in 1961 did the latter begin to catch up with Maharashtra, where most Gujaratis had set up their businesses in the past. Last year, Gujarat finally caught and surpassed Maharashtra.
The contribution of the Gujaratis to nation-building can be appreciated from the fact that they set up the country’s first cotton exchange more than 200 years ago and the country’s first stock market (the Bombay Stock Exchange) more than 130 years ago, and they continue to account for a significant portion of the both stockbroking and the commodity exchange fraternity. Some of India’s leading banks were started by Gujaratis: Bank of India, State Bank of Saurashtra, Central Bank, Dena Bank – and even one of the first private banks in the new liberalized India, Kotak Bank.
Gujaratis also control a great deal of business in many East African countries, own quite a few motel chains in the US and have significant business interests in the UK as well. The management of gift city is inclined to believe that the major differentiating factor (aside from the entire package of facilities and lifestyle offerings) will be its investments in Internet and communications technology (ICT) – its state-of-the-art wired infrastructure backed by highleveraging of communication technology. Almost one-third of the project’s cost will likely go for ICT alone.
The focus of ICT will be “utilityon- demand” offerings on ubiquitous next-generation networks. The city envisions ICT not easily available in India today – bandwidth on demand, computing on demand, secured data center services, intelligent buildings, managed network services, and efficient city ICT governance.
Key benefits for the city’s population will include:
• Access to high-speed networks with seamless voice, video and data integration and use of advanced end-user applications.
• Faster setting up of businesses with plug-and-play services that let organizations spend more time on customer business services, rather than on setting up infrastructure services.
• Secure and resilient networks with disaster-ready data center operations.
• Availability of high bandwidth at reasonable cost, which ought to lead to innovative services not even anticipated at this stage.
• Availability of customized residential services (e.g. IPTV, video on demand and online gaming). Obviously, the speed at which work has commenced, and the methodical planning of all the pieces that must be developed simultaneously, lead to just one conclusion – that the GIFT project could change the financial services map for India, and possibly for the world, as well.
After the relocation of the Nano project in Gujarat, Ratan Tata had once commented that, ‘It is stupid if you are not in Gujarat’!