After toffees and balloons, crunch these stats, too:

There is so much acrimony over the Gujarat model – some associate it with toffee and balloon. Some praise it. Some doubt if in a highly political environment in a country like India where “Sab kuchh chalta hai”, there can be any planned, intentional model of anything at all. Some others feel that even if there has been some pattern in random-seeming actions and their outcomes, then in a diverse country such as India, a model that ‘worked’ in one region might spell disaster in another. Imagine the pristine, beautiful, ecologically fragile mountainous regions of Himalayas becoming highly industrialized, constructed and populated. Further, no model is perfect. Each would have some strengths and some weakness. All we can do is examine and improve our own model.

But the daily debate on the elusive models of growth does crawl under the skin of consciousness. Even if I do not take a particular side, I live in this state and I love it. I definitely don’t think that development here is a mere make-believe. There is a room for improvement, as it is everywhere. So why are we bickering over development model? I say, shut up and do the development!

But before I shut up and do my bit, here are some stats for those who don’t believe. These figures are authentic and compiled by the Ministry of Public Enterprises of the government of India in its survey of State Level Public Sector Organizations for the year 2008-09 and 2009-10.

Caution: this is not a treatise on economics or politics. Just some statistics comparing different states in India.

[Public Sector 101, just in case] public sector enterprises include: departmental undertakings, companies established under law, and corporations/boards and cooperatives controlled by the government. All these units are divided by Constitution into two levels: those governed by the Central Government (CPSEs) and the State Government (SLPSEs).

See what I find by way of comparison of SLPSEs in India in 2009-10:

  1. Gujarat SLPSEs top in terms of net profit.
  2. They deploy second highest volume of net worth and paid up capital. Gujarat ranks second in terms of gross turnover.
  3. Gujarat SLPSEs do so fairly efficiently as they require relatively less manpower, and show less dependence on grants and subsidies.
  4. Forget about A model. Find out where performance can be improved. Don’t  bicker over who’s better. Learn from success, learn from failure! Work as a team of states and exploit every state’s best potential!

See the comparison given in the report compiled by the central government of India:

  1.  As of March, 31, 2010, there were 863 operating (working, in chaalu haalat) SLPSEs, but only 624 reported their numbers for compilation of the report (P.6).
  2. The ratio of Net Worth to paid up capital is 1.6 times in Gujarat, while it is 1.75 times for Maharashtra. In absolute amount, Maharashtra is no. 1 and Gujarat no.2, the difference when calculated as a ratio is smaller (P.13):
Paid up capital and net worth

Paid up capital and net worth of State Level Public Sector Enterprises in India (2009-10)

3.   Net Profits: While constitutionally, the PSEs can have three types of purposes (Business, Promotion or service, and a mix of the two), most SLPSEs make losses. At least the purely and partly business oriented ones should make some profit? Or, at least, the losses made by SLPSEs should be balanced against the profits made by some other SLPSEs? If not, the tax-payers keep paying for the inefficiency of the state. Now see – Gujarat is the top-ranking state whose SLPSEs make approximately 0.6 thousand crores of net profits, followed by Madhya Pradesh (p.14):

Net profits

Net profits of State Level Public Sector Enterprises in India (2009-10)

4.    Gross Turnover: Although in terms of investment, (recall the first chart) Maharashtra is far ahead in absolute terms, Gujarat is just slightly behind when it comes to gross sales turnover generated by deploying that capital (P.15):

Gross Turnover

Gross Turnover of  State Level Public Sector Enterprises in India (2009-10)

5.  This volume of business and profits is more efficient because Gujarat SLPSEs employ relatively less manpower (P.17):

Employees

Employee strength of  State Level Public Sector Enterprises in India (2009-10)

6.   Also, Gujarat SLPSEs are less dependent on grants and subsidies:

Subsidies and Grants to SLPSEs

Subsidies and Grants to  State Level Public Sector Enterprises in India (2009-10)

7.    In terms of absolute investment in SLPSEs, Gujarat ranks third (P.21):

Investment in SLPSEs

Investment in  State Level Public Sector Enterprises in India (2009-10)

8.    But again, when top ten PSUs are ranked in terms of turnover,  Gujarat ranks a very close second to Maharashtra          (P.22):

Turnover of SLPSEs

Turnover of  State Level Public Sector Enterprises in India (2009-10)

9.    Gujarat features nowhere when loss-making is considered:

Losses made by SLPSEs

Losses made by State Level Public Sector Enterprises in India (2009-10)

So, forget about a model. Don’t bicker over who’s better. All have scope for improvement. Improve India!

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19 thoughts on “After toffees and balloons, crunch these stats, too:

  1. Devang Patel says:

    Margieben, you have, possibly and hopefully unintentionally, created smoke-and-mirrrors in favour of Namo by using the convenient data. The academicians should be extra careful in their writings.

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    • Hello Devangbhai, I wrote as a state’s resident, not as an academician. I also wanted to highlight the fact that Gujarat’s SLPSEs are not run directly by one person. While they perform well, there are other sates that have done better – so rather than bickering (bringing media debates into drawing rooms) about who (that is, one politician) has done better, why not focus on more development? My precise point is that there is no ONE model, and states can learn from each other. I do not wish to bat for anyone. Thanks for being civil. As you will see in some other posts that I will soon approve, people have lost their sense of propriety altogether.

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  2. Gaurav Shinde says:

    Very nice analysis. Thank you.

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  3. Digesh Patel says:

    The state of YOUR State

    Go vote for the monster, your hero, your He-man.

    Like

  4. Digesh Patel says:

    Mam, we had the following price written specially for you.

    Do share it with your readers!!

    Like

    • I am sorry, Digesh, but I am unable to paste the link you shared. Also, I have nothing to say for the other comment, as the two have come from the same ID but different locations.

      Like

  5. Narendra Modi says:

    Hope you do share this link with your readers.

    Like

  6. Paresh Mehta says:

    While it is likely that the performance of Gujarat’s SLPSEs may be better than those of other states, the data presented by the blogger does not make a case for or against it.

    Net worth to capital ratio hides more than it reveals and therefore means little. Everything else being the same, two companies with different dividend payout policies will have different net worth to capital ratio. Among other things, this ratio also depends on how long has a company been in business. Most of the other variables presented above are highly correlated. (A company employing more capital is expected to generate higher sales and profit. There is a story worth telling only if does not do so.)

    The term toffee was used by Rahul Gandhi to describe resources having been given away by Narendra Modi at throw-away prices. The data presented above does not argue against that allegation. It is reasonable to say that the allegation was not attractively made. But at least it was not made in Narendra Modi’s uncouth style. One could say that Rahul Gandhi tried to ape Narendra Modi in using populist language and miserably failed.

    I would like to caution the readers of this blog post as under:

    1. The writer is addressing an allegation with data that is completely irrelevant.
    2. A truth unattractively told does not necessarily become a lie.
    3. An evidence presented five time using different words/figures does not become five independent evidences.

    Lastly the writer could call Rahul Gandhi ‘an idiot’ on line without any fear. Can she, on some valid grounds (NaMo has provided many of those) do that to Narendra Modi and keep her job at BK? She could also be threatened with violence, including rape.

    Therefore it as a fair assertion that coming from business school TEACHER, this post is certainly juvenile. That the teacher is an an OB teacher, writing on issues outside her expertise, can be taken as a mitigating circumstance.

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    • Paresh Mehta, you do not know what are the indicators of development monitored across the world. Performance of SLPSEs is not one of them. I wanted to show that good performance can also be shown by organizations that are labeled as ‘bureaucratic’. But in your hurry to call my blog juvenile, you revealed your weak knowledge of economics, weak comprehension of passages and your bigotry against women. So let me simplify it for you: my blog post was not for one person. It was a suggestion that we need to do more, as there is a great scope for better performance.

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  7. Hemant Shah says:

    Excellent replacement of toffees and balloons with gas. Can’t believe this is coming from a business school prof. Forget an MBA, even a B com student will not write such a juvenile, grade F, report.

    Like

    • It seems *you* never went to a business school, Hemant, because you can’t tell the difference between a BLOG based on a GOI report and a report. This is a personal weB-LOG and has got nothing to do with what I do for a living. Tell me, what REALLY makes you SO angry?

      Like

    • You still don’t get it, do you? I don’t write about ONE PERSON. I said that irrespective of affiliations and inclinations, however you measure, there is a scope for improvement. Across India.

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  8. G Garcia says:

    It is said that if you torture data long enough it will confess to anything. We would have taken the writer’s view as neutral if she had not coloured them with words like balloons and toffees. In using these words she has given away her game, and declared her typical middle-class-Gujarati women’s undying love for Narendra Modi. (No children are children unless they are their own.) Garcia’s life was incomplete. He died without writing of this denomination of love.

    Like

    • Poor Garcia – it is not your fault, but the fault of your education in Macondo that has left you unable to notice the obvious: (1) these are graphs and tables from the publication of the central government, based on data sent by the SLPSEs themselves (2) Toffee and Balloons are words used by others to describe what is happening in my state (probably not reported in Macondo Times) (3) I said it is not about Politics or Economics.

      Like

      • G Garcia says:

        The writer takes Modi’s criticism as the state’s. Love is known to cause that kind of impairment. Someone described Catherine The Great as “She was an empress. And she was a woman.”. Given the writer’s desire to pick the fact that reinforce her prejudices, and her love for Modi, one can say that, “She is not a teacher. And she is not a woman.”

        Like

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