Gujarat Model

What will Narendra Damodardas Modi do in the event of him being elected the Prime Minister of India? What kind of governance will he provide? What will be his economic, social and political priorities? Perhaps even his closest aides cannot guess that.

Unpredictability is a key characteristic of Modi, though some characteristics of his persona are now discernible. These include his legendary ability to talk the people’s language, his willingness to work almost round-the-clock, his resolve to keep his administration free of corruption, his refusal to be intimidated by persons, organizations and money power and his stoic insistence upon maintaining consistency in all his pronouncements.

What characteristics have contributed how much to his success and how he would work and behave in the future is something nobody can hazard a guess on. The only thing that can be said with certainty about Narendra Modi is that the man has his own unique ways of looking at persons, organizations and situations and keeps writing his own rules to deliver growth, development and prosperity directly to people’s homes.

Whatever he does will be different from what he has done in Gujarat. His handling of bureaucracy and his direct and indirect messages to the vast machinery of the central government will be different from what he did in Gandhinagar. His priorities will be different. The way the central government addresses issues of domestic and external security will change. The way India deals with the rest of the world will change. The way the centre deals with the states will change. His every approach, every action and every stance will be tailored to meet the new situation. To guess what he will do at New Delhi will be an exercise in futility.

It is intriguing, to say the least, that when Modi’s critics say that the Gujarat Model will not work in the national arena, all they mean is that it is a model that does not include minorities and weaker sections of the society. He is accused of being too friendly to rich businessmen and industrialists. Beyond these allegations, there has been no analysis of the Gujarat Model. There has been no attempt to discern the inherent patterns and its significance, or the absence of it, to the national arena.

There are several clearly identifiable patterns in the way Modi has managed Gujarat. Added together, they do make a growth model that perhaps needs to be studied extensively by academics in India and abroad since it can be adapted to conditions prevailing in several LDCs (Least Developed Countries). Unfortunately, even the developed world academia seem to have failed to understand the contours of what is known as the Gujarat Model, though in all fairness it should be called The Modi Model.

Principal components of this model can be defined and explained as follows.

Trigger development at the bottom and the top of the pyramid simultaneously, assigning equal weight to both ends

hether growth should be a top down or a bottom-up process has been debated quintessentially. There are those who believe free enterprise creates wealth and that eventually percolates down to the lower stratas. And there are those who believe growth should begin at the bottom. Modi began moving from both ends almost simultaneously. After launching a slew of social schemes designed for the bottom-up approach, the first Vibrant Gujarat was held in the same year, in September 2003. Through out the over a decade long rule of Narendra Modi the thrust at the bottom of the pyramid has remained as strong as the hype and hoopla of Vibrant Gujarat that has uplifted quality of food and ambience at events held in New Delhi also. Astonishingly and inexplicably, he has made the interests of the poor and the downtrodden converge with those of the affluent and that is the reason why even the poorest sections of the Gujarati voters have also looked benignly at his open hobnobbing with the richest Indians.

Large industries energise the upper half of the society, providing high end managerial and skilled jobs and creating demand for a host of services. Availability of water and power transform the lives of the bottom half as this results in setting up of small manufacturing as well as service units. A village, or a cluster of villages, may have the market for a laundry, an electrical repairs shop, a small guest house and catering services, etc. but these opportunities cannot be exploited without smooth availability of the basics like water and electricity. Similarly, many small and cottage industries can be set up in rural areas once the basic infrastructural facilities are available. The biggest success story in Gujarat has been small diamond polishing units as many diamond polishers working in Surat have set up small units in their villages.

Growth in agriculture and small manufacturing and service industries has put rural Gujarat, the bottom half of the pyramid, on the growth trajectory on a sustainable basis. As emerging opportunities are recognised by entrepreneurs, the scenario is getting transformed palpably.

Plan for development in different areas on an integrated basis

One of Modi’s favourite statements has been that ports are no good for an area if there is no rail and road connectivity. Ship repair facilities, fuel supply systems, skilled manpower and qualified port managers are the related issues that are being addressed simultaneously. Ports are being viewed as a step towards the overall development of the economy and, therefore, plans are afoot to supplement port facilities with warehousing and other related infrastructure also.

Similarly, higher agricultural output can actually cause only grief in the long term if adequate cold storage facilities are not available and the food processing industry fails to grow. Per se this principle can be elaborated at length but that is not the subject of  this book. Another example is cotton, where Gujarat has emerged as the largest producing state in the country. At present Gujarat is focused upon forward vertical integration and is trying hard to promote spinning, weaving, processing and apparel industries. This principle of looking up and down the value chain in each sector of the economy is being followed scrupulously when formulating policies.

In social sectors such as education, his attention is equally divided over primary, middle and high school, university and tertiary sectors, besides high end universities for specialised education in areas such as forensic science. Modi has stated clearly that expanding the number of universities in the state is not the goal. Gujarat has already set up a petroleum university and now plans are being drawn for a petroleum ITI because if every village has to have gas pipelines, the system will need plumbers experienced in handling gas pipelines and other skilled personnel for maintenance. As technology is changing and role of manpower in economic output is declining steadily, value addition has to move to different areas and multiskills has become a necessity. One man should be able to handle several kinds of tasks. Therefore, a family should train the two or three children it has in different skills. Some would find work in the summer while others may get employed in winters. The family as a unit should have steady income. Modi is obviously trying to offer an entirely new model of education to the whole world.

An interesting innovation has been the setting up of the Police University (actually named Raksha Shakti University) which has received so much attention from DGPs (Director Generals of Police) of other states that they have decided to change their recruitment rules and have sought admissions for students from their respective states. Arunachal and Tamil Nadu not only want to send some students but have also said they would reserve some seats in police jobs for those who study at the Police University in Gujarat.

Equal shares for agriculture, manufacturing and services in GDP

The broad premise here is that the economy should not falter when some parts suffer because of unforeseeable circumstances such as drought and market cycles. The stated principle at present is to divide the economy about equally between agriculture, manufacturing and services. Gujarat has placed almost equal emphasis upon these three areas and after hard work spread over nearly a decade, agriculture has started growing faster than manufacturing and the trend is largely being expected to continue for a few years. Gujarat is being promoted as a tourist destination by none other than the legendary Amitabh Bachchan and all available information suggests that hotels and allied businesses in areas like Gir and Ambaji are growing leaps and bounds. Gujarat has already emerged as one of the fastest growing, if not the largest, tourist destinations. Some success has been achieved in medical tourism also. The number of middle class families coming to Gujarat for medical treatment from other parts of the country has been growing steadily in the last few years.

Latest technology

Narendra Modi has always been known for his fascination for technology. When he addressed 52 meetings in different parts of Gujarat by using the 3D holographic technology, it resulted in an additional entry in the Guinness book of records. Several industrial units in Gujarat are known to be technologically the most advanced in their respective areas which span diverse sectors such as petroleum refining, petrochemicals, railway gear, automobiles and others. In agriculture, use of technology has expanded in a very perceptible manner, one example being the fact that efforts to encourage use of sprinklers by farmers has grown exponentially in the last few years. Land under micro-irrigation has expanded from 15,000 to 800,000 hectares in less than a decade. Be it industry, agriculture or services, technology is always a major consideration when formulating policy and taking decisions. At a personal level, he is the only digital leader India’s analogue polity has.

Single shot quick execution of projects

Whenever possible, large projects expected to alter lives of people in a significant way are sought to be executed in one big thrust. The JGY needed Rs 1500 crore (eventually it cost a little over Rs 1200 crore only) and Modi provided the money seamlessly, without any break. The result was that every household in Gujarat was provided with electricity for domestic usage within 30 months of launch of the scheme. Similarly, after the experiment with evening courts yielded extremely encouraging results, Modi wanted to expand the judicial infrastructure and allocated a sum of about Rs 800 crore in the budget for fiscal 2010-11 for setting up new courts. It was the Gujarat High Court that went jittery about the sheer speed with which Modi wanted to move. While Gujarat High Court and the Supreme Court were busy ensuring investigation of Modi’s alleged complicity in post-Godhra riots, Modi was asking for an additional 800 judges to be appointed like yesterday and was ready to appoint the requisite number of public prosecutors on an ad hoc basis. Apparently, the judicial system didn’t even try to rise to the challenge. Now when emphasis is on skills development, Modi has provided Rs 800 crore in the budget for 2013-14. The central government too has woken up to the need for skills development and has provided a sum of about Rs 1200 crore in its budget for 2013-14.

Maintain liquidity

Much has been said about Gujarat having become a highly indebted state under Modi’s rule and the charge may not be entirely bereft of the truth. However, there is a pattern here too. Finances of the state are being managed in a manner that mimics the most successful among large privately owned corporations. Projects are scheduled such that availability of funds is never a problem. If some schemes are eligible for central assistance, projects under such schemes do not have to wait for funds to actually be received from the centre. This ensures that most projects are completed within schedule and their costs do not exceed estimates. Believe it or not, Gujarat maintains a cash balance equal to about a month’s expenses.

Effective communication

Effective communication with all stakeholders too is an integral part of the Gujarat Model. The whole nation knows how skilled Narendra Modi is at communicating with the masses. However, less known is the finesse with which he communicates with individual stakeholders such as large prospective investors, firms competing for contracts and groups seeking special treatment. He goes to great lengths to ensure that the ground reality is appreciated by all concerned. Those who fail to get what they want also go back with a grudging acceptance of the system’s efficiency, honesty and integrity. Perhaps Modi’s ability to communicate with the stakeholders in general and the masses in particular is what has caused the maximum consternation among his opponents.

Good governance

That of course is the lubricant that keeps the whole machine working smoothly. Providing an atmosphere bereft of red tape has been an element of faith for Modi and this has in fact played the most important role in luring investors from all over India and abroad. A Rs 2000 crore project in Kutch was completed within a record period of nine months, from land development to commissioning of the plant, largely because the company implementing it didn’t have to halt work even on a single day in want of clearances of different hues. Modi is firmly of the view that once the government has cleared a project, there should be no hurdles at different levels of the administrative machinery.

The good governance part also spans the entire pyramid, from the very top to the bottom. As Modi stated at the India Today conclave on 30 March 2013 at New Delhi, there can be no good governance without an effective grievance redressal system. He personally scans grievances put before the government through the designated portal cmonline and almost all grievances are sorted out within reasonable time. When it is not possible to address an issue within a reasonable time, the complainant is explained the reasons, ensuring there is no sense of dissatisfaction.

Modi’s personal honesty, integrity and dedication have remained unquestioned through out his 12 year rule and that is the reason why he has been able to provide good governance at a scale that is considered impractical in most other states in India. The Gujarat Model mandates simple hard work and determination to run the government within the framework of some set rules and boundaries. The leader leads by setting examples, himself working hard and making his ministers and bureaucrats work equally hard. True accountability, duly supported by periodic evaluation of performances is an essential characteristic of the Gujarat Model.

Hard work put in by Modi has actually contributed more to Gujarat’s growth than is realised by most. For example, showcasing Gujarat slickly was actually the easier part of the exercise. Persuading farmers to use technology and even switch crops was tough. The results took almost a decade to arrive. But now that the agri-boom has arrived palpably, the targets have been defined more sharply.

Consider this seemingly trivial example. Most central and state level ministers, including the prime minister and the chief ministers, treat the long overseas flights as time for relaxation and entertainment and some light banter if some journos are also on board. When Modi goes abroad, the aircraft becomes his office. A schedule is in place. On outward flights he discusses with each member of his entourage, separately, what he/she is expected to do during the trip. On the return flight each member explains what was expected to be achieved, what has been achieved, what could not be achieved and what follow-up is required to realise the maximum possible gains from the visit. Post-visit action agenda are generally ready before the aircraft lands at Ahmedabad. Very often even the senior industrialists get the feeling that they are executives of a larger industrial house, rather than owners of billion dollar empires.

It is rather difficult to identify elements of the Gujarat Model that are unlikely to work at the national level. Will the practice of planning work when travelling abroad become ineffective if Modi’s entourage takes off from New Delhi instead of the Ahmedabad airport?

The difference between the model followed at New Delhi in independent India and the Gujarat Model is that leaders lecture about the need for listening to the people and then retire to their plush homes and offices. When Narendra Modi decides to implement an idea in cooperation with the people he goes out to villages in his caravan of inexpensive SUVs and gets cracking. Of course this hands on approach will have to be altered at the national level because the canvas will be wider. But surely there are ways of reaching out to the people through out the country. The prime minister of the nation can always address his people through television and electronically as often as he wishes. Prime Ministers have not done that in the past but perhaps they didn’t have enough to say or they weren’t sure of effectively communicating with the people.

In periods of crisis, whether it is a political crisis or a natural calamity, his government doesn’t slow down its work. He clears files when flying to far flung areas for campaigning and after returning late in the night, he isn’t averse to looking at a few more if they are urgent. When he was asked to campaign extensively for Karnataka assembly elections in May 2008, none of the programmes in Gujarat was allowed to suffer. “He often flew to Karnataka in the afternoon, addressed a few rallies and returned to Gandhinagar late in the night and yet nobody found him tired the next morning.”

This kind of energy stems primarily from his typical ability to ignore what he perceives as inconsequential and remember what he considers important. His ability to prioritise tasks at hand is amazing and he stretches himself almost indefinitely to complete tasks he has scheduled for a given day. He is often forced to hear out ideas of limited use from important visitors but a good idea, coming from even people who are apparently of limited importance, receive his complete and undivided attention. Politicians generally prolong meetings only with their near and dear ones, without bothering about how many are waiting to see them. Modi too sometimes prolongs meetings, without bothering how many are waiting outside his chambers, but in his case this happens only when a visitor unexpectedly comes up with issues and ideas that are worthy of his attention.

He is a volcano of energy which works almost round-the-clock and puts no limits on the speed of implementation of government plans and programmes. Pace of work is limited only by technical or logistic constraints. The government machinery in Gujarat generally works faster than most private companies, particularly in case of schemes that are the focus of Modi’s attention at any given point of time. That is why Mukesh Ambani publicly acknowledged at one of the Vibrant Gujarat meets that Modi runs Gujarat more efficiently than he himself runs his Reliance Industries.

Modi’s Vibrant Gujarat shows have been hailed as the best managed investor meets ever held in the country but the success cannot be ascribed only to the excitement he builds so successfully every alternate year. The real reason is that whatever he promises to prospective investors is actually delivered. Investments running into hundreds of crores have been executed within one to two years because the Gujarat government ensures that no project suffers a single day’s delay in want of any clearance. Good governance is the name of the game. It is often said that only a fraction of what is announced at Vibrant meets actually fructifies. For the ill-informed, the world average is around 15-20% only.

It is rather difficult to comprehend why this model, this way of working, will not work at the national level. The reality is that when critics say that the Gujarat Model will not work at the national level, they imply that the minorities are completely ignored in Gujarat. Nothing could be farther from the truth.

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