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:
- Gujarat SLPSEs top in terms of net profit.
- They deploy second highest volume of net worth and paid up capital. Gujarat ranks second in terms of gross turnover.
- Gujarat SLPSEs do so fairly efficiently as they require relatively less manpower, and show less dependence on grants and subsidies.
- 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:
- 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).
- 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):
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):
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):
5. This volume of business and profits is more efficient because Gujarat SLPSEs employ relatively less manpower (P.17):
6. Also, Gujarat SLPSEs are less dependent on grants and subsidies:
7. In terms of absolute investment in SLPSEs, Gujarat ranks third (P.21):
8. But again, when top ten PSUs are ranked in terms of turnover, Gujarat ranks a very close second to Maharashtra (P.22):
9. Gujarat features nowhere when loss-making is considered:
So, forget about a model. Don’t bicker over who’s better. All have scope for improvement. Improve India!