28 January 2009

The real Modi story...

Via Ruchira Gupta, Salil Tripathi in Mint exposes the hollow reality behind the impressive investment figures Narendra Modi has been touting as his big achievement in Gujarat. The key point -- Modi's massacres were bad for investment:

You might think that Gujarat is outracing and outpacing India, and Modi is singularly responsible for the boom. In fact, according to the Centre for Monitoring Indian Economy, Gujarat commanded a huge lead over other states: In September 1995, the state’s share was 14.45% of all projects under implementation in the country. At 9.43%, its nearest rival, Maharashtra, was a poor second. Maharashtra overtook Gujarat, but in December 2001 its lead over Gujarat was less than a percentage point.

Then something happened, and by September 2002, Gujarat’s share fell to 8.78%; three years later, it was down to 7.67%, with Orissa ahead of Gujarat, and Karnataka close behind. Since then, Gujarat has recovered, but only slowly, and today commands 9.57% of investments in India. It is behind Orissa and Andhra Pradesh. Maharashtra is only half a per cent behind, and Haryana, West Bengal and Karnataka are trying to catch up.

That “something” is the post-Godhra violence. From 2002, smart money began investing elsewhere. It has since started returning, but despite Modi’s administrative skills, his state no longer leads the inward investment tables.

So seven years on, Modi has recovered some ground. And for that, he should be made Prime Minister, Mr. Mittal?

Incidentally, I think another angle that needs probing is Mr. Modi's attitude towards trades unions. I've heard anecdotes which suggest that's why corporate types love him.

9 comments:

Dr.R.K.D.Goel said...

Your statistics may be correct. But 1% or 2% this way or that way makes no difference.
Uness yu put up sme test of significane and foud statisticaly significant have no meanings.

Modi is a very good orator can prove his all lies into correct. Has any other political leader having this charisma?

Modi is known as a BEARED GOD in Gujarat. Has any leader of any party become God for people? No

Modi is a mass leader and he superceded all his senior BJP leaders. Any other leader has done this? So accept all the saying of Modiji.

Anonymous said...

Goel ji,
i congratulate you for pointing out that modi is referred to as the 'beared (?) god'. he must be a great man to be termed as such. i also congratulate you for showing us that he can 'prove all his lies correct'(!) He then, as you correctly point out, must be a great leader. i am glad to say that given the water proof logic of your arguments, india has now no choice but to elect him PM. since you do such a fine job of extolling his virtues, have you thought of becoming his press secretary? unfortunately, for reasons unbeknownst to me, he has consistently been getting bad press.
our country's 'shining' future rests on your shoulders, sir. go forth and educate the ignorant masses.
(and plz. keep a helmet always at your side)
-N

Anonymous said...

Varadarajan, can you answer the following ?

Companies plan their investments one year in advance. If Gujarat's share fell in 2002, one has to examine if something happened there in 2001. There was a devastating earthquake in Gujarat in 2001, and have you studied the effect of that earthquake in Gujarat's share ? (Or do you blame Modi for the earthquake too, like CPM blaming the BJP for tsunami?!)

(this is basically a question to Salil Thripathi by "Oldtimer"@The Acorn (i rephrased it a bit))

Siddharth said...

@ Anon/Oldtimer,

It's been ages since I studied and taught Economics so I'll give you a layperson's answer. The impact on investment -- especially infrastructure, and then on other sectors via a multiplier-type cascading effect -- of an earthquake would actually be upward, not downward. But you are right that there is a lag between planning and implementation of investments (though not exactly "one year in advance"). But even if this were so, I may have decided in 2001, after Bhuj, to set up a plant in Gujarat. But by 2002, I'm saying to myself, Modi seems to have no respect for the rule of law. Let me go elsewhere.

Devotees of the 'bearded God' would do well to spend more time understanding Salil Tripathi's point and less time beating up on young women having lunch in Mangalore and people performing Bhojpuri plays in school on Republic Day in Maharashtra...

Anonymous said...

But by 2002, I'm saying to myself, Modi seems to have no respect for the rule of law. Let me go elsewhere.

And after some years I am saying to myself, Modi seems to be good, let me come back to Gujarat!

Merely after a few months of Modi taking in charge as the chief minister if someone had made such conclusions like "Modi seems to have no respect for the rule of law", I can only sympathize with them!

Anyway, after watching Modi rule for years, investors now think that It's stupid if you are not in Gujarat

A haste decision (within months) of 2002 or a well thought decision of 2007(after years of Modi rule), which is more sensible ?

Anonymous said...

Progress cannot be dismissed by shoddy stats spewed out in hate.


Disinformation of this kind reflects a biased agenda to disavow progress at all costs.

Mind giving stats on your own service to India? I bet you can cook something up.

Grow up!

Anonymous said...

All the best to Mr. Modi . Hope he remains strong and be the PM someday.

Ravi Kiran said...

Look at what RBI is saying about gujarat . About 25% of the investments are being attracted by gujarat . Please look at the below links .
http://www.atimes.com/atimes/South_Asia/IK27Df01.html

Anonymous said...

Leave alone Modi...where is the progress in other states which have no riots or rule of law prevails 100%. Inspite of all these why they are not able to match Gujarat.

One lesson to be learnt from this. Even, if he is your enemy appreciate his strengths and copy into yours so you will also succeed. If he is your real enemy, analyse his mistakes and avoid doing it by yourself then also you will progress.

Mr. Modi, knows where to progress....

GS
Sudan