After Gujarat , Modi' s Model Now Puts India Under Massive Debt

BY R.K.MISRA

Estimates may deign to deceive but figures ferret out  facts.

In Indian Prime Minister Narendra Modi’s home state of Gujarat, the government’s cumulative public debt has shot up to an astronomical Rs 2,96,268 crores which is  almost 75,000 crores  higher than the size of the  state’s budget estimates  of Rs,2,17,287  for  2020-21 placed in the State Assembly on February 26.

The projections for 2022-23 see this  debt burgeoning to  Rs 3,71,989 crores in 2022-23.An assertion in the State Assembly would have you believe that a every child in the state is born to a burden of Rs 48,000. On 31 March 2012 this figure was  Rs 23,163 (calculating the state population as 6 crores). Gujarat hit headlines recently when it splurged to give a spectacular welcome to US President Donald Trump during his three hour visit to Ahmedabad.

Gujarat’s public debt has been consistent with the rise of chief minister Narendra Modi who took charge of the state in October 2001, except with one notable difference. While Modi’s political fortunes  soared Gujarat’s sank deeper into the quicksand of debt. When he first came to power in 2001-02,the actual debt  was Rs 45,301 crores  and after he left for Delhi in 2014 ,the Comptroller and Auditor General(CAG) put the total debt of the state for 2015-16 at Rs  2,21,090 crores.

In fact, a Reserve Bank of India(RBI) study of state budgets(2015) had revealed that Gujarat’s outstanding liabilities, also identified as “total debts”, have crossed Rs 2 lakh crore in 2014-15,reaching Rs 2,100.4 billion or a little above Rs 2.1 lakh crore, up from Rs 1,886.4 billion in 2013-14, a 10.19 per cent rise.

When the BJP first came to power in  Gujarat in 1995 the  public debt was around Rs 10,000 crores and barring a 16 month  interruption continues to be in power to this day with Modi being its longest serving chief minister in history.

Modi rode into Delhi  as Prime Minister riding astride a  thumping mandate which was largely attributed to the  ‘sterling’ model of development that he had successfully implemented in Gujarat. A cornerstone of this  model  were the bi-annual Gujarat Global Investor Summits.

Beginning with the first one in 2003 up to the seventh one in 2015 the Gujarat government declared it had signed a total of 51,378 memorandums of Understanding(MOU) worth a total investment of a mind-boggling Rs 84 lakh crores with the 2011 summit alone accounting for Rs 20.83 lakh crores in proposed investment in the state. In the run up to  the eighth summit in 2017, the state chief secretary, J.N. Singh  claimed an implementation rate of 66 per cent for the past seven editions.

How would it compare when weighed against the fact that the GDP of India for the year 2017-18 was  Rs 131.80 lakh crores. In fact, the figures being trotted out at these summits touched such ludicrously bloated levels that it subsequently stopped quantifying it in rupee terms and later even dropped the word ‘investor” from the summit.

According to the figures published by Gujarat’s own Directorate of Economics and Statistics only about 8 per cent of the Rs 40 trillion of the investments proposed at the summits from 2003 to 2011 have been implemented. Figures show that Maharashtra without any such ‘gloss and glam’ show bagged 30 per cent of India’s total investment between 2000-to 2016 while Gujarat ranked fifth with 4 per cent.

The Department of Industry Policy  and Promotion(DIPP) study has brought out that Gujarat’s share in actual cumulative  Foreign Direct Investment(FDI) inflows to India between 2000 to 2013 broadly coinciding with Modi rule in Gujarat was only 4 per cent. Gujarat garnered only Rs 39,000 crores out of the cumulative national FDI of  9.1 lakh crores. More significantly Gujarat’s share in the kitty had been under decline from 3.4 per cent in 2011 to 2.9 per cent in 2012 to 2.4 per cent  in 2013.

The benefit accruing from the summits to Gujarat  were only a fraction  of what it achieved for Modi. Aided by APCO Worldwide, the US global public affairs and strategic communications consultancy which had been hired to promote the summit, Modi hop, step and jumped from a ‘hindu hriday Samrat’ (Hindu heart throb) to development messiah through the hard-hyped Gujarat Model to become the Prime Minister in 2014.

The Comptroller and Auditor General(CAG)  report for the period ending  March 31,2014(Modi rule)placed on the table of the Gujarat Assembly on March 31,2015  busted the myth of the model.

It ‘willfully’ understated  revenue  expenditure and overstated  revenue surplus. Between 2009-2014  the state government invested Rs 24007 crores in it’s PSUs and got a return of a mere 0.31 per cent by way of dividend, huge land parcels were given away to favoured industrial houses. Over the same period 70.95 lakh pregnancies were registered but there were only 57.66 lakh  deliveries and no effort  made to find out why there were  13.29 lakh less deliveries. The figure of malnourished children in the state stood at 2.7 lakh.

Education fared no better. Implementation of RTE as well as other educational schemes, particularly in the tribal areas was rated poor. The expenditure against available funds was only 12.67 per cent in 2011-12,14.09 per cent in 2012-13 and 22.42 per cent in 2013-14. Sixty four schools with a total strength of 5698 had no teachers while 874 schools had only one teacher.

Gujarat under Modi claimed to be a power surplus state which provided  electricity round the clock. In a written reply in the Assembly it was stated that 32,500 million units of power had been purchased from private players in 2014, a 13 per cent increase over the previous year while the state owned power units contributed a mere 26,122 million units. The pending applications for agricultural power connections stood at 1.77 lakhs.

In hindsight , all the grand memorials of  extravagance- the multi-crore swarnim sankul to house the chief minister’s office with a helipad to match, the Rs 400 crore mahatma mandir, the garib kalyan melas, shaala praveshotsavs, khel mahakumbhs  and  the numerous other state-wide  ‘spectacles’ were initiated and  ballooned on borrowed money !

The splurge  continues as the state continues to slide. Malnourishment in children has increased by 2.41 lakh children in the last six months since July, 2019 to 3,83,840 lakh. 

Over 15,000 newborns or 21 per cent of those born or admitted have died in government hospitals in the state in the last two years. Over 5200 primary schools are  planned to be closed down in the name of school mergers with tribal, dalit and minority areas being worst casualties. There are 3 murders, four rapes and 8 kidnappings every day. Employment under MNREGA stands  reduced by 32,17569 man-days from 4,055064,03 man-days in 2018 to 3,7288935 man-days in 2019. The list is long.

Replication of the Gujarat Model countrywide had been a promised priority. And as a mark of  continuity the total debt of the Modi-led central government  increased by 54 per cent to Rs 84 lakh crore between June 2014 and March 2019, according to the department of economic affairs, ministry of Finance.

Remember, every current decision  always carries a future cost- good, bad or ugly !