A Matter Of Economics
By Dr R. Balashankar
Growth has no meaning if it does not transform the lives of the poor. And if it cannot lift the living conditions in villages it is futile. That the Gujarat Chief Minister Narendra Modi has in the last one decade changed the face of his state is well established. But the miracle in the Gujarat model, the high growth trajectory and structural changes that Modi has brought about in agriculture is yet to be widely appreciated.
The Planning Commission has noted it. The International Food Research Institute (IFRI) and other national and international agricultural bodies have acknowledged the amazing growth in agriculture in Gujarat. Consider also the fact that the national agriculture scene is witnessing neglect, policy perversion and decline in post-liberalisation India. The entire focus being hogged by the corporate and consumerist overdrive.
Modi model has presented a total vision statement in action where industry, agriculture, technology, infrastructure and the consumer find synergy for the making of a welfare state. Which other Chief Minister thought of the importance of 24-hour assured power supply throughout the state as the best guarantee for growth? Who else can boast of building rural roads and markets as a precursor to rural development? Modi first ensured the availability of sufficient water for irrigation before attempting a food revolution in a region not especially known for agriculture.
By March 2008, all the 13,693 village panchayats of Gujarat were equipped with required computer hardware and the internet connection. The project was implemented by Gujarat Government in partnership with IL&FS for infrastructure support and Google for technical expertise. This project represents a very successful PPP model implementation in Gujarat for infrastructure creation, maintenance, and operation. Significant role is played by Reliance Infocom in project implementation and Airtel in satellite connectivity. It is a combination of this and many such factors that has prompted comments like “phenomenal,” “incredible” and “miracle”— double digit annual agriculture growth when the overall national agriculture growth is limping at below two per cent.
Ravindra H Dholakia and Samar K Datta of IIM Ahmedabad in their interesting study (reviewed in Organiser dated December 25, 2011), High Growth Trajectory and Structural Changes in Gujarat Agriculture make a critical appraisal of the scene. Their conclusion, “the spectacular agricultural growth in Gujarat in recent times has been the result of a well thought out strategy, meticulously planned and co-ordinated scheme of action, sheer hard work and sincere implementation of programmes, political will to take bold decisions and commitment to economic policy reform by the state government. As such there is nothing magical or incredible about this growth story. It is reasonably replicable in other states and regions if firm determination exists.” This is the moot point.
In seven years the country has seen how absence of policy initiative and commitment to implementation of policies have gravely endangered the India story under Manmohan Singh.
How Modi fixed his goals and achieved them ensuring balanced growth at all levels is a fascinating instance in nation building. Samir K Datta, chairman of the Centre for Management in Agriculture says, the CMA faculty were being consulted and involved in the planning process, when the state government was evolving a good management system for Gujarat agriculture. On a visit to CMA, former President APJ Abdul Kalam, who was so impressed by the agro-revolution in Gujarat suggested to the faculty to take up a serious research study on the subject. Datta says, in any case it was a core area of the CMA mandate and naturally it could not “sit as a mere spectator when Gujarat agriculture made history by achieving double digit growth rate.” We will examine the details of this rare success story in a couple of future columns.
The CMA study explains how e-gram scheme, introduced by Modi Government has helped agricultural markets through efficient price discovery for best value, access to scientific expertise for farmers, and weather information. In addition, the common service centres have many spillover benefits for the villages of Gujarat, such as panchayat to panchayat communication, issue of documents (birth and death certificate, land ownership certificate) by village panchayats, payment of electricity and telephone bills, visa application, and e-postal service etc. The most relevant effect of the e-gram scheme is to provide a significant boost to the commercialisation of agriculture and encourage farmers to view agriculture as a potentially profitable business by opening up new horizons. People who talk of retail FDI as the panacea for Indian farmers, should take a look at the Gujarat experiment.
The performance of Gujarat has been more than exemplary in promoting agricultural production and exports during the last decade. In the same period, the growth of infrastructure was tremendous. The agricultural sector showed an unprecedented and sustained growth rate. The agricultural prices have sustained and not sunk in response to the rise in production and productivity, thereby letting the producers reap the benefits of improved agricultural output. This has become possible only because of market expansion through exports, which was not possible earlier due to missing export-facilitating infrastructure.
Infrastructure has improved over the previous decade. The number of ports and their turnover has increased manifold. Road network, including rural roads, highways, and port-roads, has become extensive. Water and power, perhaps for the first time in the history of independent India, are systematically available for the masses at affordable prices. Also, the usage conflict among domestic, agricultural, and industrial sources is not reported.
Reform is about fixing the sinews of development. This is what Gujarat has done. FDI and MNC can wait and come in the natural course.
The usual lack of warehousing facilities has been tackled through an innovative system of extensive Public-Private Partnership. The penetration of both rural and urban telephony in Gujarat is comparable to world class and is still improving. Although overall connection numbers for internet in Gujarat are not encouraging, the successful implementation of e-gram scheme has virtually minimized the difference of technological facilities available between urban and rural areas. Here is gramodaya in action.