BOOK REVIEW. The business of books on Gujarat

What is the Gujarat “model”? Is it about numbers, or about principles? There is a difference. Take the Chiranjeevi Yojana healthcare programme, claimed to be an “innovative partnership with the private sector obstetricians to provide skilled care at birth to the poor in Gujarat”.

Under this programme, expectant mothers in below-poverty-line or BPL households can also access medical services through private practitioners. This is public-private partnership (PPP), as opposed to government delivery through PHCs (primary health centres).

Take the Vanbandhu Kalyan Yojana, where two animals are offered free to tribal households, but they have to pay for animals in excess of two.

Examples can be multiplied to substantiate a template of decentralisation, PPP (not just corporate sector), user charges, use of information technology and so on.

True, that template should lead to improvements in indicators, such as Chiranjeevi Yojana to increases in institutional delivery.

But too often, the debate isn’t about the template but about numbers. What’s great about Gujarat’s growth rate?

That’s because of history. Other States have also grown fast. What about poverty and inequality? What about social sectors, health and education? To use the clichéd example, what about malnutrition? What about the environment?

The 13 papers in this volume tread the same ground. There is also a Foreword by Yoginder Alagh, who describes himself and the authors as “Charawaks” (sic). “You may be aware that the Charawaks, my favourites in Ancient India, were outsiders, even though they were part of the system.”

No doubt Professor Alagh knows there is little record of what the Charvaka (based on ‘ charu ’ and ‘ vak ’) school actually believed in, as opposed to Lokayata beliefs. To the extent we know what the school believed in, it rejected inference as a means of knowledge, hardly a compliment to the authors.

To return to the authors and the introductory essay by the three editors, “It shows that even in a state, which is considered a classic success story of the neoliberal policies, inclusive growth is not forthcoming easily.”

That introductory essay also promises us an in-depth analysis “especially during the first decade of this millennium”.

So let’s take inequality, as reported by Indira Hirway in the essay on “assessing inclusiveness”. Let’s also take the Gini coefficient (which maps income inequality) as a measure.

To compute Gini coefficients, one needs data. That comes through the National Sample Survey’s (NSS) consumption expenditure surveys, or through the economic think tank, the National Council of Applied Economic Research (NCAER). Hirway quotes the last NCAER survey, for 1995-96 to 2004-05. So much for the “first decade”.

But there is more. “This study shows that at the all-India level the Gini ratio of income inequality increased from 0.43 in 1995-96 to 0.46 in 2004-05. The study also notes that Gujarat is one of the states with a high value of Gini ratio, slightly higher than the all-India ratio.

According to this study, the Gini ratio in Gujarat was 0.47 in 2004-05. This is much above the acceptable levels.” We are then given a helpful footnote. “The acceptable level of Gini ratio in the literature is up to 0.32-0.33.”

Since this is a remarkable and fairly strong statement, one would have liked further references. In distributions of income (not consumption expenditure), who has said that 0.32-33 is “acceptable”? And to set the record straight, the all-India Gini in the Rajesh Shukla/NCAER study was 0.45. That’s quite a bit of suppressio veri, suggestio falsi .

Since this is about the first decade, how about using the NSS survey for 2011-12? Surjit Bhalla has written on this. Suffice to say, it will be impossible to establish inequality in Gujarat is significantly higher.

From that same survey, we have expressions like “recent” Human Development Report (Planning Commission) and “latest” National Family Health Survey (NFHS).

A reader can be pardoned for not knowing this “latest” NFHS is from 2005-06 and “recent” HDR uses data from NSS 2004-05 and NFHS 2005-06.

Hence, there are serious methodological issues with these essays. First, as the authors, with such a lot of expertise on Gujarat, should know, the social sector thrust started in 2007, not 2002, by the government’s own admission.

Therefore, any improvement should occur thereafter. Second, there is a difference between incremental improvements in any indicator and its base level.

Third, there are sources (however unsatisfactory) to probe social sector changes for the entire decade. (Try NSS and Census.)

Fourth, if there is no special growth story in Gujarat, there can be no social sector success story either. There is a logical fallacy in arguing there is no special growth story and then arguing there is no social sector story.

Or perhaps this is the Alagh understanding of rejecting inference as a means to knowledge. This leaves additional papers on subsidies/incentives and environment.

Subsidies/incentives exist in every State. There can be a general argument against all production subsidies/incentives, applied to all States.

But when they exist, it is important to ask whether this is discretionary for specific categories, or uniform for all investors.

I have yet to come across any evidence (including this book) where subsidies/incentives today (not historically) are discretionary.

Finally, if this is to be treated as an academic book, one would have expected less reliance on newspaper reports as evidence. A review is not the right place to pick holes in 13 individual papers.

Whatever be the Gujarat story, it has spawned a cottage industry of books on Gujarat. This is one more, with very little value addition.

The writer is an economist who teaches at the Centre for Policy Research in New Delhi. He is the author of, among others, ‘Gujarat: Governance for Growth and Development’

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