We started the second phase of our “India Journey” from Gujarat.
Our team travelled to 11 districts across South, Central and Saurashtra regions
of Gujarat.
In our numerous interactions with people in past year or so, we
found that mere mention of word “Gujarat” is enough to instigate a debate. Not surprisingly,
most urbanites across the country have strong views on Gujarat. Though the
opinion is divided on the candidature of Narendra Modi for PMship, majority of
people outside Gujarat have a positive perception about the Gujarat growth
model. We therefore kept our focus on the socio-economic conditions of Gujarat
and what that could mean for India in coming years. Politics inevitably
intruded in discussions.
The key findings of our Gujarat trip were as follows:
(a)
The most striking observation was the huge
socio-economic disparities especially in semi-urban and rural areas.
People suggested that a large part of prosperity in past two
decades has come primarily from two sources
(a) economic boom and bust in
developed world that has seen substantial rise in remittances from prosperous
overseas Gujarati community; and (b) Narmada water that has resulted in higher
agriculture growth and astronomical rise in land prices.
Consequently, it has not led to commensurate employment growth
and therefore a large part of the population has not participated in the
growth.
(b)
However, the real surprise was that the rising
disparities in Gujarat are motivating the underprivileged people to do well,
unlike Karnataka and Maharashtra where it is resulting in disillusionment and
unrest. The key difference in our view is the leadership.
(c)
Due to enterprising spirit, the household
leverage, especially amongst middle and lower middle class is high in Gujarat.
“Cash lending” market is vibrant and exploitive.
(d)
Most in Rural areas, believed that their Chief
Minister is blessed. More than two third believed that the change in weather
pattern (more rains, less dust storms) is due to CM only. So much so for the
“Gujarat Economic Model”! Exit of Modi from Gujarat may not be seen favorably by
rural voters.
(e)
We discovered that alcohol business in the state
is managed by one of the best supply chains in the country. Global universities
which found Mumbai Dabba wala model interesting would be surprised by this,
perhaps one of the largest undercover supply chains in the world. RBI trying to
curb gold import may also take a lesson from this.
(f)
The communal divide is deep in almost all areas.
Contrary to popular perception, people believe that but for Modi, the state
would have had seen many more riots.
Next week we shall travel to Rajasthan and UP.
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