EUROPEAN PEACE UNIVERSITY (EPU)

PRIVATE UNIVERSITY

Third Module paper

PRICE OF DEVELOPMENT IN GUJARAT UNDER
NARENDRA MODI
An exploration of his model
Of growth and governance

Submitted by ANAMIKA GUPTA

to Prof Paul Scott
on 5 July 2o13
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 Table of Contents

1. Introduction ---------- --------------------------------------------------------------------- 3

2. Gujarat’s Economic Boom -------------------------------------------------------------- 4

3. Employment scenario- Case of missing farmers ---------------------------------- 5-6

4. Gujarat Energy sector— the Fairytale revival -------------------------------------- 7-8

5. Water woes and Damned controversies ----------------------------------------------- 8-10

5.1 Declining groundwater pushing farmers to desperation ---- --------------------- 8

6. Agricultural paradox- Growth amidst farmers’ suicides

and land grabs ------------------------------------------------------------------------------ 9-14

6.1 Land transfers of agricultural land to industries --------------------------- 13-14

7. Recommendations ------------ ----------------------------------------------------------- 15-16

8. Conclusion ------------------------------------------------------------------------------ 17

Bibliography

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 1. Introduction

India is gearing up for its 16th Lok Sabha Elections in 2014. That could well be a game changer
not just for the future of India but also regional politics. India is a secular democracy with a
Hindu majority, surrounded by predominantly Islamic, Buddhist and another Hindu neighbors
namely Pakistan, China, Bangladesh, Sri Lanka, Nepal, Afghanistan and Burma. The political
ideology of India‘s Prime Minister, who is the Executive head of the country, would exert a
considerable influence in shaping and maintaining these fragile relationships. At present there
are two possible contenders for the Prime Ministerial position— Congress Vice President Rahul
Gandhi, scion of India‘s oldest political dynasty; and Narendra Modi, the incumbent Chief
Minister of Gujarat.

Modi belongs to India‘s main opposition party — the Bhartiya Janata Party (BJP) which also
leads the opposition coalition in India‘s multi-party Parliament. He is currently serving his fourth
term as a Chief Minister of Gujarat. Modi became Chief Minister for the first time in 2001 after
winning a bye-election, and since then has consecutively won three state elections (2002, 2007
and 2012). He has recently been nominated to lead BJP‘s 2014 Election campaigning committee.

He has been credited for driving growth and innovation, tackling corruption in the state,
trimming the bureaucratic system of governance and making it swifter and more efficient.
Through his governance model, which he proudly calls Pro People Good Governance model, he
has been able to catapult a dry-arid, power-starved state into an economically robust one.

However, his alleged involvement in a state-wide Hindu-Muslim communal violence in 2002 in

which an estimated 2,500 Muslims were killed, poses the biggest threat to his pan-India appeal
as a Prime Ministerial candidate of secular India. Till date he has not been convicted; neither has
he taken any responsibility nor has he apologized for the pogrom. This makes him one of India‘s
most controversial political figures. In the aftermath of the violence, many countries including
US, UK, Canada and EU had severed diplomatic relations with Gujarat. However since 2012,
these countries have not only revoked their visa bans but have become active participants in
Gujarat‘s flamboyant Investment Summits called Vibrant Gujarat Summit.

In this paper I would like to analyze the Modi‘s governance model on the key issues of
Economy, Employment, Energy, Water and Agriculture. In the course of the paper, I would
repeatedly probe whether growth in Gujarat has been inclusive or exclusive, who is paying the
price of development in the state, and who is enjoying the fruits of labour?

The first section gives an overview of Gujarat‘s robust economy attained under Modi. The
second section explores the impact of this economic growth on employment generation. The
third section elaborates upon Gujarat‘s energy sector; the fourth focuses on the state‘s water
issues and initiatives. The fifth section analyzes the government claims on agricultural growth,
the impact of its agro-policies on farmers and farmlands, as well as the issue of land transfers.

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This will be followed by a broad set of Recommendations for the Gujarat government, and
finally, the conclusion.

2. GUJARAT’S ECONOMIC BOOM

Modi has become the poster boy of BJP. He is the longest running BJP Chief Minister in India,
and has secured a solid foundation for victory for the party in Gujarat — a Hindu majority state.
He has been able to garner support by following his fire-brand Hindutva philosophy catering to
the aspirations of the rising middle-class in Gujarat — good education, good jobs, higher
standard of living, improved infrastructure to bolster industries etc. Note that Hindus comprise
almost 89 per cent of the state population, Muslims roughly 9 per cent, while Jain, Sikhs and
others make up the rest. (Census 2011) Since 2002, after winning his second elections, he shifted
his focus on liberalizing and deregulating Gujarat‘s economy to boost private investment in
Gujarat and turn it into a manufacturing and export hub of India.

Gujarat proudly proclaimed its economic credentials at the 2013 Vibrant Gujarat Summit in
Gandhinagar in January 2013. ―The economic growth indicators of Gujarat have been impressive
with an achievement of an average annual growth rate of 10.4 % in the last five years, ….
Gujarat contributes to 16% of the industrial production of the country and has also mobilised the
highest share (12.7%) of the investments through IEMs in the country.‖ Currently, its industrial
growth rate is poised at 13 per cent, agricultural growth rate is between 11-12% (much higher
than the national average of less than 3 per cent), besides accounting for 22 per cent of India‘s
export. Gujarat has invested heavily in its infrastructural development primarily catering to the
industries. Besides having one international and six domestic airports, Gujarat is home to six air-
strips and 23 power plants. Its extensive road network covering 137,617 km, rail network
covering 5,188 km and a 2,200 km gas pipe – is all geared towards making Gujarat one of
India‘s most well connected states, internationally and nationally.

Special Economic Zones (SEZs) provide a power package of incentives and subsidies for
companies. Gujarat is home to 55 SEZs in various stages of approval and operation, covering an
area of approximately 27,125 hectares involving key industries such as IT/ITes, port-based and
multi-products, gems and jewellery, power, textile, pharmaceuticals, chemical, biotechnology
and more. (Industries Commisionerate of Gujarat, 2013) In addition to this, the Modi government
has managed to build a business friendly regulatory environment that has been attracting private
investments from other parts of India as well as overseas. The presence of 2,100 delegates from
121 countries at this year‘s Vibrant Gujarat Summit attests to that. Little wonder then that a 2011
report by the US Congressional Research Service calls Gujarat as " India's best example of
effective governance and impressive development ― and lauds Modi for streamlining ―economic
processes, removing red tape and curtailing corruption in ways that have made the state a key
driver of national economic growth‖. (PTI 2011)

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But the question is, what does this mean for an ordinary Gujarati? Has this robust economic
growth translated into robust well-being, greater employment opportunities, improved standard
of living or health for an average person in Gujarat? The attempt to answer this vital question is
the aim of this paper.

3. EMPLOYMENT SCENARIO- CASE OF MISSING FARMERS

In his inaugural speech at the same Summit Modi said that ―Manufacturing, Services and
Agriculture‖ are three important pillars of Gujarat‘s economy. He also claimed that Gujarat is
―the biggest creator of jobs in the country‖ and asserted the ―creation of more than three million
additional jobs‖ in the near future (Modi 2013). However, the Census 2011 points in the opposite
direction, besides revealing the startling case of missing farmers.

The number of farmers has plummeted by 3.55 lakh in 10 years (2001-‘11) in Gujarat that boasts
of a double-digit growth in the agriculture sector. The number of agricultural labourers have
increased by a staggering 17 lakh during the same period. This is not a good sign. An article in
Indian Express quotes noted economist and professor emeritus of Sardar Patel Institute of
Economic and Social Research Prof Yoginder Alagh, "The agricultural workers are nothing but
landless laborers. Any rise in their numbers is a major cause for concern and also points to a poor
employment situation. Agriculture labor is a last resort for most of them who lose their land for
various reasons." The highest drop has been among females farmers, reduced from 18.86 lakh in
2001 to 12.03 lakh in 2011.

This trend could be related to the reduced participation of small farmers in fast-growing, high-
value crops produced largely through industrial farming, as well as due to the current practices in
sale and purchase of rural land. Farmers are losing their agricultural land to private industries and
Gujarat Industrial Development Corporation, a state agency meant to facilitate the entry of
private industries in Gujarat. The state‘s agricultural policies seem to systematically marginalize
and reduce the space for small farmers, take up their land, and turn them into farm laborers with
little protection. Many choose to abandon farming, migrate to nearby towns in search for jobs as
laborers, and not a few commit suicide. I will elaborate on this in the Agriculture section.

A 2012 study compiled by Prof Anil Sood warns the central government against replicating
Gujarat‘s model of growth in other states. Journalist Rajiv Shah quotes an essay from the study
written by scholars Ruchika Rani and Kalaiyarasan A, ―The growth rate of employment in
Gujarat during 1993-94 to 2004-05 was 2.6 percent per annum. This came down to nearly zero
from 2004-05 to 2009-10. Employment in key sectors — agriculture and manufacturing
witnessed negative growth rates of 1.59 per cent and 2.23 per cent per annum, respectively.‖
(Rani and Kalayasaran 2012) In fact, Gujarat‘s contribution to India‘s manufacturing
employment has remained almost stagnant over the three decades. In addition, Gujarat‘s
manufacturing sector is characterized by heavy mechanization, slow growth in wages,
casualization of labour, and overall reduced position of workers in the manufacturing sector.
This is making the workers more vulnerable, thus more willing to accept jobs that pay
exploitatively low wages.

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Modi has claimed on several occasions that his model of growth has ensured inclusive growth
for everyone in the state. The situation of employment generation in these three key sectors
clearly demonstrates that Modi‘s model is far from being inclusive, rather it is exclusive. One
indicator of this exclusive growth is the rural to urban migration of poor laborers. According to
the Planning Commission data released in 2012, between 2004-05 and 2009-10, the number of
rural poor in Gujarat has come down by 3.69 million, while the number of urban poor has risen
by 170,000. This hints at a distressing number of intra-state, rural to urban, migration in Gujarat.
When viewed in the light of the definition of inclusive growth provided by development
economist Prof Amartya Sen that ―a growth that is inclusive is poverty alleviating‖, (Sen 2011)
the hideous contradiction between economic growth and human insecurity in Gujarat becomes
all the more glaring.

The state of human development in Gujarat has not been commensurate with its economic
growth. For example, the state of child malnutrition in Gujarat in some cases is worse than Sub
Saharan Africa. According to the National Family Health Survey-3 (2005-06), 47 per cent of
children below the age of three in Gujarat are underweight; this is higher than the national
average of 46 per cent as well as an increase of 2 per cent since the last NHS survey (1998-99).
The report also reveals that 44.6 per cent children below age 5 in Gujarat are underweight, and
51.7 per cent are stunted. According to the 2011 Census, the child sex ratio in Gujarat is
alarmingly low at 886 girls per 1000 boys. What is interesting to note is that the sex ratio is
higher in rural areas (906) as compared to urban Gujarat. Gujarat has a high rate of infant
mortality in India- 44 deaths per 1000 live births. It ranks 11th in the rate of decline in infant
mortality, although it must be mentioned that it has shown improvement on this front over the
last 20 years.

Ironically, Gujarat is fast becoming an international hub in healthcare with a steady entry of
major corporate hospitals in the cities and towns to tap the ―underserved market‖ (Sharma 2010)
with ―increased per capita income and rapid industrialization‖. (Chadha 2010) This paradoxical
growth in health care has served the urban rich more than those who need it the most. Gujarat
may be well-equipped to handle the malaise of lifestyle diseases, but has failed to control basic
ailments that could be prevented with adequate and timely medical intervention. As noted
economist and Nobel Laureate Prof Amartya Sen warns, ―While the public health system has not
received the priority it deserved, there is a debilitating illusion, a nasty and costly
misunderstanding, that somehow private health care system can come in and bridge the gap,"
(2013).

Its inimitable infrastructure and connectivity to world market has definitely catapulted Gujarat on
the world map, but it has not augured proportional improvement in the lives of its most deprived
citizens. Gujarat‘s blind pursuit of growth based on liberal economic policies, with a heavy
reliance upon private investment, has led to what many critics call ―jobless growth‖ in Gujarat.
There is an urgent need to reorient the growth trajectory from being purely market-driven, to one
that is truly inclusive.

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4. GUJARAT ENERGY SECTOR— THE FAIRYTALE REVIVAL

Gujarat is naturally endowed with ample sunshine and wind energy. It is the only energy-surplus
state in a power-starved country, and typical to a Gujarati business acumen, sells its 600MW
surplus energy to neighbouring states of Tamil Nadu and Karnataka, 220MW and 200 MW
respectively. Modi once declared that he wants Gujarat to become a ‗solar power capital of
India‘. Rue to his words, Gujarat is not only a leader in solar energy installations in the country,
but is also a fast emerging wind energy hub. In fact, Gujarat's overall integrated renewable
energy potential is estimated to be around 748.77 GW. (Thakkar 2012) However, once upon a
time, Gujarat‘s energy scene was in doldrums.

In 2001, when Modi first assumed office as Chief Minister, Gujarat State Electricity Board was
running into a loss of Rs 2,246 crore, on revenues of Rs 6,280 crore. Interest costs stood at Rs
1,227 crore while Transmission and Distribution, or T&D, losses amounted to 35.27 per cent.
Long hours of power cuts coupled with power theft ranging from 20 per cent in urban areas to 70
per cent in rural areas hindered growth, agricultural productivity and quality of life. To add salt
to the wound, the State electricity board lacked the funds to boost capacity on its own and failed
to invite private investors. Thus, reforming the Gujarat State Electricity Board became Modi‘s
top priority.

He undertook stringent measures such as sharp reduction in transmission and distribution losses,
debt restructuring, measures to arrest power thefts, renegotiation of power purchase agreements
with private players, as well as separation of the power feeder lines into agricultural and
household needs. The state was eventually able to revive its moribund power sector. In 2006,
Gujarat government launched its rural electrification scheme (Jyotigram Yojana) to provide
three-phase power supply to most of Gujarat's 18,000 villages.

These efforts finally bore fruit in 2005-06 when the State Electricity Board recorded its first
profit of Rs 203 crore, after tax. In 2010-11, GSEB‘s net profit had risen to Rs 533 crore, while
T&D losses had come down to 20.13 percent. As of August 2012, Gujarat has installed power
generation capacity of 23,927 MW (Green Clean Guide 2013), which is nearly 46 percent of the
national capacity (PTI 2012). The board now boasts a 100 percent Tariff collection efficiency,
and has become a level-playing field for major power companies. In fact, the power sector hogs
almost 40.8 per cent of the state total investment, most of them from private investors such as
Tata Power, Reliance Power and Adani Group. It could be deduced that in return for these
investments, Gujarat government is giving them large plots of land, at times fertile agricultural
lands forcible taken from farmers, at ridiculously low prices. I will elaborate upon this in the
Agriculture section.

Gujarat is also an emerging leader in the field of solar and wind energy in India. Gujarat Solar
Park, launched in 2010 with an investment of Rs 9,000 crore, is already generating 214 MW of

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electricity, and many more are on their way. The State‘s installed wind power generation
capacity has increased by 36 per cent during 2011-12 to 2,966 megawatt (Mw), making Gujarat
the second lead, after Tamil Nadu, in India's wind energy sector. (Vora 2013)

It would be interesting to know who is benefitting from this revival of the energy sector. Even
though Gujarat‘s electricity board, together with other public and private power companies has
been able to generate surplus power in the state and claims to provide 24 hours electricity in rural
areas, the ground reality is different. When it comes to load shedding, the rural and agricultural
sectors are most often the casualty. According to a report prepared by the India Institute of
Management (Ahmedabad) for USAID, the Gujarat Urja Vikas Nigam Limited (GUVNL) which
is a subsidiary of Gujarat‘s main energy board, load shedding is generally avoided in residential
and commercial sectors of major cities such as Ahmadabad, Surat, and Vadodara as these large
cities have high concentration of commercial consumers. Generally, majority of the load
shedding is being done in rural areas where the load mainly consists of agricultural pumping.
Generally, according to 2006-07 estimates, the ratio of urban to rural load shedding is around
1:6; in other words, about 86 per cent of the load is shed in rural areas while the remaining 14
per cent is in urban areas. Infact, agriculture and irrigation in rural areas suffered the maximum
load shedding, including during the day. In the drought-prone areas where rainfall is erratic and
with the promised waters of Narmada dam is nowhere in sight, electricity is indispensible for
drawing groundwater for irrigation. This deliberate low prioritization of rural agriculture reveals
just how expendable the sector and those who depend on it are, for this government.

Another criticism leveled against Gujarat‘s energy set is the high tariff rate. The cost of
electricity in Gujarat is much higher than the rest of India, firstly, because energy is largely
privatized in Gujarat and also because of the heavy reliance on imported coal, which is a limited
thus costly resource. The state is currently embroiled in a battle with private power companies
who are again demanding a hike in tariff rate — second time within a year. Gujarat‘s power
sector is a fitting example of what noted nuclear physicist-turned-activist Vandana Shiva
describes as the ―economy of theft‖ (2011) and flies in the face of Modi‘s claims of inclusive
growth.

5. WATER WOES AND DAM(NED) CONTROVERSIES

Gujarat is a mid-size state situation on the western coast of Indian Peninsula. It borders Pakistan
and Rajasthan in the north-east, Madhya Pradesh in the east, Maharashtra and the Union
territories of Diu, Daman, Dadra, and Nagar Haveli in the south. It is situated on the Tropic of
Cancer, and falls under the Sub-tropical climactic zone. Some of its major rivers are Narmada,
Sabarmati, Tapi, Purna, Damanganga, and Rukmavati. It falls parallel to the Arabian branch of
the southwest monsoon winds and lies on the leeward side of the Western Ghat. This makes the
state drought-prone. In his speech on 5 May 2013 at a meeting organized by the Saurashtra
Jaldhara Trust in Rajkot district of Gujarat, Modi said ―in the coming years, the same (lack of)
water that was seen as the reason behind Gujarat‘s problems will now be the reason behind the
state‘s progress.‖ (Modi 2013)

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Gujarat government has launched several initiatives such as water harvesting, water harnessing,
drip irrigation and farm ponds, to make the state water sufficient. Some of the mega-projects are
Sujalam Sufalam Yojna (SSY) to provide irrigation and water supply to drought-prone north
Gujarat; Sardar Sarovar Dam Project, creation of a statewide Drinking Water Grid and River
Interlinking project. However, many of these initiatives are mired in corruption.
The Rs 6237.33 crore Sujalam Sufalam Yojana scheme was announced by Modi in 2003. The
project was scheduled to be completed by 2005, but has still not seen the light of day. A report
prepared by Gujarat‘s Public Accounts Committee of Gujarat indicated a scam of over Rs 500
crore; this report was which was not tabled in the Gujarat Legislative Assemble. Report by the
Comptroller and Auditor General of India revealed various discrepancies in financial
management of the project, leading to a public uproar, which promptly resulted in the transfer of
the secretary, water resources, and appointment of a committee of three secretaries to investigate
the scam. The report is still awaited. (Mehta 2012) Meanwhile, farmers in northern Gujarat
continue to suffer due to failed or untimely rainfall or provision for irrigation.

However, nothing could match the gigantic cover up in the Sardar Sarovar Dam Project,
commonly known as the Narmada Dam Project. The idea of damming Narmada river was the
brainchild of India‘s first Home Minister, Sardar Vallabhai Patel who hailed from a Gujarati
farmer family. The Dam is part of the Narmada Valley Development Plan (NVDP) which
envisages the building of 30 big dams, 135 medium dams and 3000 small dams on the Narmada
& its tributaries. The construction of the dam, and its canal and irrigation system began in 1987,
initially financed by the World Bank. With an estimated cost of Rs. 392.4 billion (8 billion
USD), this Dam is believed to be India‘s costliest water management project. It is slated to
benefit four riparian states — Maharashtra, Madhya Pradesh, Gujarat and Rajasthan. It is
supposedly the world‘s second largest concrete gravity dam. When finished, the dam is estimated
to generate 1 billion kWh of hydropower every year, for irrigation it will reach 1.8 million ha in
Gujarat (out of total 1.905 million ha) benefitting 1 million farmers. (Dam‘s Official website)
Narmada Canal based drinking water supply project promises to benefit about 75 per cent
population of Gujarat through a state-wide Drinking Water Grid, reaching 9633 villages and 131
towns in Gujarat. However, the main bone of contention in the project since its inception has
been the height of the dam. The government argues that it would deliver these proposed benefits
only if the height is raised to 138 meters from its current height of 121.92 meters.

Activists argue that if the height is raised to 138 metres, the dam would displace more than
320,000 people and affect the livelihood of thousands of others, besides adversely affecting at
least 1 million people as a result of building the canal system and related work. (Friends of River
Narmada 2013) A lot of sit-ins, hunger strikes, non-violent protests and newsreels have been
spent to stop the dam project, led by activists Medha Patkar and Baba Amte. The biggest victory
of the protest came in 1995, when after years of investigation, the World Bank finally stopped
funding the project on the ground that ―performance under these projects has fallen short of what
is called for under Bank policies and guidelines and the policies of the Government of India‖
(World Bank). The matter was taken to the Supreme Court of India, who initially ordered an
immediate stoppage of work at the dam and directed Gujarat to first rehabilitate and replace
those threatened by the Dam. However, in 2000, the Court turned its ruling in favour of Gujarat
government and ordered the project to be completed efficiently, despite major unresolved issues

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on resettlement, compensation, environment to name a few. However, till date the fate of the
Dam hangs precariously on the political battle field.

One would be reasonable to ask why, despite several water initiatives, do crops fail each year in
drought-prone areas. Journalist Mahesh Langa explains, ―In 2007 Modi announced that the
(Sardar Sarovar Dam) project would be completed by 2010; but it has been postponed to
December 2014. Out of 75,000 km of canal network projected, only 35% i.e. 26,000 km has been
completed, with only 10,000 km completed under the Modi government, since 2001.‖ (2013)
This is one of the main reasons why the farmers in northern Gujarat‘s drought-prone Saurashtra
district continue to bear the onslaught of droughts year after year.

It can be argued that the Dam is not being built keeping people‘s welfare in mind, but to serve
the needs of the energy-guzzling industries. Else, as argued by a report prepared by Tata Institute
of Social Sciences, it can perform its promised functions even at the present height. Other
criticism leveled against the Dam is that greater percentage of water meant for drought-prone
areas for agricultural and household purposes, is being diverted to power plants, city municipal
corporations and industries. In addition, no recovery of water charges was carried out from these
corporations and industries; the Gujarat Water Supply and Sewerage Board had to bear the entire
expense of 48 crores to make available water for domestic use. Making references to CAG
reports, the TISS report indicates that water meant for domestic purposes is being diverted to the
industrial units. This pushes up the overall allocation of water to industries in Gujarat, which
automatically reduces the allocation of water for domestic use. (Parasuraman 2008)

These anomalies have made the Sardar Sarovar Dam Project one of India‘s most politicized,
contentious and wasteful projects. They also raise doubts about the government‘s true intent in
planning and implementing these initiatives; who is meant to be its main beneficiary? In the
guise of development, these initiatives, it seems are designed more to meet the demands of the
industries and commercial infrastructures such as plants and SEZs, than the needs of the
common people for safe water for drinking, household, agricultural or irrigation purposes.

5.1 Declining groundwater pushing farmers to desperation

Gujarat‘s laws and policies regarding ground water expose the government‘s callous attitude
towards farmers‘. Figures released by Gujarat‘s Groundwater Resources Development
Corporation reveals that ―the groundwater level in the state has declined by 80 metres in the past
three decades. Decline in groundwater levels average about three metres per year.‖ (Chakravartty
2013) The government argued that the farmers‘ excessive extraction of ground water for
agriculture purposes by digging deep bore wells was the main reason behind the plummeting
water table. Therefore, in February 2013, the government passed a bill restricting farmers from
extracting ground water. It is interesting to note here, that in September 2012 Coco Cola opened
its biggest production plant in Gujarat‘s Kheda district. We all know the massive extraction,
depletion and pollution of ground water these beverage production plants cause. To tax the
farmers for drawing water for their crop without providing them with an alternative, exposes the
hypocrisy and corporate cronyism of the Modi government.

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Water, like electricity, is a common good. It is the local people who should have primary
entitlement to this common good. It was with this conviction that Mahatma Gandhi launched his
Salt Satyagraha in 1930. If only Modi would formulate policies based on Gandhian principles
instead of just quoting him in his speeches, while respecting the rights and entitlements of the
people above commercial interest, Gujarat will become a shining example of inclusive growth
and development.

6. AGRICULTURAL PARADOX- GROWTH AMIDST FARMERS’ SUICIDES AND LAND GRABS

Modi has projected Agriculture as a great case study of Gujarat‘s development model. This
section aims to unravel the true story behind this growth saga, and what impact has it had on the
farmers.

According to Modi‘s website, farmers‘ earnings have increased due to progressive agriculture
policies of the state government. Gujarat‘s agriculture growth rate is leading to 10.97 per cent
against the country‘s average growth of merely 3 per cent. Agricultural income too has gone up
from Rs.140 billion to Rs. 590 billion, and that agro-based industries will be investing Rs.370
billion on projects highlighting success of Agriculture in Gujarat. According to Modi, all this has
been possible because of increased supply of electricity and water for agricultural purposes,
contract farming, better irrigation facility as well as bringing together farm scientists and
―service providers‖ to help the farmers.

However, not everyone is impressed. In its 2013 report titled ‗State of Indian Agriculture‘, the
Union Agricultural Ministry said that during 2007-12, the agricultural growth in Gujarat was 4.8
per cent (ranked 8th), and not as high (read double digit) as projected by Gujarat government.
Moreover, the Planning Commission of India has predicted that Gujarat is least likely to cross
the 4 per cent threshold in agricultural growth the next five years (2013-2017), and will slip
lower in the rank. (Dave 2013)

It is interesting to note the way in which Modi projects facts and data. He may not lie
outrageously, but through clever usage of language he frames the figures in a way that makes it
look good and praiseworthy, when in reality it is abysmal. For example, in his speech to
undergraduate students in New Delhi this year, Modi proclaimed that Gujarat‘s cotton
production has increased from 23 bales in 2002 to 12.3 million bales in 2012. Gujarat is the
largest cotton producer in India, and within Gujarat, drought-prone Saurashtra is the main cotton
producer. Saurashtra produces almost 25 per cent of its cotton from its 26.25 lakh hectares of
land under cotton cultivation. A Frontline article quotes a report by the Cotton Advisory Board
that while the acreage (in Saurashtra) has remained constant in the past 10 years, the yield has
declined. The cotton production has dropped from 772 kg a hectare in 2007-08, to 650 kg in
2008-09 and to 635 kg in 2009-10. This year, at 611 kg, the yield is the lowest in the past nine
years. The Saurashtra Ginners Association predicts that this year‘s cotton production in Gujarat
is likely to be around seven million bales, a decrease of 5.3 million bales in 2012. Of this,

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Saurashtra‘s production may not cross three million bales, which is almost 50 per cent lower
compared to last year. So, while the cotton production may have increased dramatically when
viewed in a 10 year time span, the situation in reality calls for concern.

The issue of cotton production is intrinsically linked to the use of Genetically Modified Bolgard I
and II cotton seed varieties, and special fertilizers and pesticides, all provided solely by US-
based agro-giant Monsanto. The use of these GM seeds started around 2004. Many activists and
scientists believe that although, initially GM cotton seeds did enhance productivity, but because
of its ill-effects on soil health probably resulting from its long-term usage, the productivity is
now heading south. This is creating panic among cotton growers across India, Gujarat included.

We could say that Gujarat‘s farm policies are geared to the needs of the agro-industries and seed
companies, than to the well being of its farmers. In his speech at the 2013 Vibrant Gujarat
Investment Summit, attended mostly by big corporate investors and foreign delegation, Modi
said that this industrial revolution is ―benefitting farmers‖. Buoyed by this success, he has
proposed a ―farm to fabric‖ approach in the cotton and textile industry, aiming to turn in into an
export-led industry. However, contrary to his laudatory remarks, this ―industrial revolution‖ is
wreaking devastation on the farming community, agricultural land and productivity. One such
outcome has been an alarming increase in suicides among farmers, especially of cotton, in
Gujarat, which the government denied till recently.

According to news reports, 489 farmers committed suicide in Gujarat from 2003 to 2007, and
112 suicides took place from 2008 to 2012, with around 40 such incidents occurring between
August and December 2012 itself. (Katakam 2013) Apparently, farmers‘ deaths are not recorded
accurately, with police trying to subdue facts in order to give lower figures. Since most of these
deaths are recorded as accidental death, the actual figure could be much higher.

With many farmers committing suicide or quitting farming, how is state managing to have high
agricultural growth rate? It is clear that it is not the farmers who are benefiting, but those who
have usurped the farmers‘ land and rights to farming — the agro and seeds companies who have
invested heavily in the agriculture ―industry‖ in Gujarat. Instead of protecting the rights and
livelihood of its own farmers, the government is acting more like a pimp for the private
investors. Again, this flies in the face of Modi‘s tall claims about inclusive growth and proves
that he does not walk his talk.

Activists, journalists and farmers‘ union who are actively engaged in the issue say that farmers
are compelled to take their life due to their inability to repay their loans taken to bear the high
input cost of farming — GM and hybrid seeds are patented by the company and thus include a
high royalty cost, fertilizers and pesticides, high cost of irrigation and maintenance of soil health
etc. This becomes excruciating for farmers in large parts of Gujarat which are drought-prone. In
addition, the steady decrease in public credit and public investment in agriculture pushes the
farmer to borrow money from private money-lenders at exorbitant interest rates. Industrial

12
farming also necessitates monoculture, which kills crop diversity, reduces soil fertility, makes
the crop more vulnerable to climactic and other vagaries, thus increasing the farmers‘
dependency on that one crop. Crop failure is becoming an annual feature in the face of erratic
and inadequate rainfall. The falling price of farm commodities in international market adds the
final blow, leaving farmers with barely any remuneration for their effort and input cost. This
pushes many farmers to either quit farming altogether or tragically, commit suicide. Activist
Vandana Shiva calls these deaths ―genocide‖. (Shiva 2010)

But there has been one silver lining in the cloud. In April 2012, Gujarat government stopped
procuring the hybrid maize seeds from Monsanto due to ―ill-effects‖, which the government has
not elaborated. The seeds were distributed to half million farmers by the Tribal Development
Department under the Sunshine Project since 2008. The farmers can now buy ―government
approved seeds of their own choice‖ for which the ―government would provide financial
support‖ said Gujarat Agricultural Minister Dilip Sanghani. But many farmers union argue that
this is only half the struggle, and demand a ban ―on any kind of field trial on genetically
modified food crops being done in couple of agriculture universities of the Gujarat‖. (Business
Standard 2013)

Despite tall promises made to the farmers about water from Narmada River reaching the field for
irrigation and boosting crop production, no water till date has been released from the Dam.
Compounded with the problem of declining ground water levels, seepage of saline sea water into
underground aquifers due to excessive digging, as well as ill-effects of using genetically
modified seeds on soil health – all this is bound to cause irreversible damage to the state‘s
agriculture. Not to forget the massive problem of land transfer for non-farming, industrial
purposes by the state itself, which is stripping the framers of their source of livelihood and by
extension, their security against uncerainties.

6.1 Land transfers of agricultural land to industries

Modi has been wooing the ―men in suits‖ by providing them with lucrative land offers. In an
article in Frontline magazine, journalist Ajoy Ashirwad Mahaprashasta notes that Gujarat
government provided the Adani group with over 5 crore square metres of land along the coast at
a meager rate ranging from Re.1 to Rs.32 a square metre when the market rate was over Rs.1,500
a square metre. The Adani group got the land for industrial use and port development, instead, it
sold/leased out a significant portion of it to other corporate groups, flouting norms.
(Mahaprashasta, 2013) The Gujarat government continues to ignore the protests of the local
people maintaining that the land given to the Adani group was ―wasteland‖.

The Gujarat Industrial Development Corporation (GIDC) was set up 1962 to facilitate the entry
of big industrial projects. Mahaprashasta writes that GIDC provided Tata Motors with 440 ha of
land in Sanand, near Ahmedabad to set up the Tata Nano manufacturing unit from its pool of
reserved land meant to be used for agricultural research. To meet the additional demand of 520

13
ha, the GIDC acquired land in seven surrounding villages through coercive means. Meanwhile,
Sanand is set to become an automobile hub. Following the precedence set by Tatas, the Ford
group and Peugeot have already established a unit. Maruti Suzuki is the latest entrant in the game
owing to continuing workers‘ unrest at its plant in Manesar, Haryana.

The Special Economic Zone in Mundra, spread over 10,000 hectares, is being developed as a
port and a special trading zone. It has been reported that the development of this SEZ has already
displaced 56 fishing villages and 126 settlements robbing them of their right to livelihood, in
addition, it has also violated the regulations of the Forest Rights Act, as 2,008.41 hectares of
forest land was cleared to set up a salt washery and a desalination plant.

Gujarat is racing to become an automobile hub, power hub and manufacturing hub of India, but
at a tremendous human cost. The model of agricultural growth based on industrial farming,
contract farmers, deregulation of agro-market, increase of private investment and giving them the
authority to dictate what crops to grow, where and how — is regressive and imperialistic,
benefitting only few handful men. Such policies go against the foundations of a welfare state,
and as I have tried to highlight in this paper, is leading to a hollow and inhuman growth.

14
 Recommendations

In this section I have attempted to provide few broad measures the Gujarat government should
undertake on an urgent basis in order to make growth more inclusive and humane.

i. Reorient and strengthen the labor laws to safeguard the rights and welfare of the labors,
while balancing the business interests. Businesses have the inescapable responsibility to
conduct themselves in a responsible manner. They have to fulfill their obligation to the
Triple Bottomline of society, environment and the economy, and not just exploit resources
for profit maximization. This would include providing the factory labors with adequate
wages, health and social benefits, healthy compensation packages, proper working hours
and conditions, housing facilities with livable condition, pension schemes. In addition, they
have to adhere to environmental safety norms and incur the necessary cost. Under no
circumstances should the government cut slack to those business entities who fail to fulfill
their obligations to the community and environment.

ii. Ensure that employment generation across all sectors is commensurate with growth in that
sector. Growth has to be inclusive, and the benefits should be evenly distributed amongst all
those involved.

iii. Tackle issues of malnutrition, poverty, healthcare for the poor and rural on a war footing,
and not be at war with them. The state has to increase public spending on basic healthcare
and education, and make it accessible and affordable for the poor and those living in rural
areas.

iv. Make the state public distribution system for food grain more effective and transparent, and
ensure that the most marginalized are given priority.

v. Prioritize the agricultural, irrigational and household electricity requirements, before

subsidizing electricity for industrial parks, SEZs, luxury hotel etc.
vi. Make land allotments to companies more transparent; recognize the farmers‘ right to their
land and stop forcible transfer of agricultural land to industries.

vii. Stop treating agriculture and farmers as expendables. Lift the licensing regime on drawing
groundwater for farmers, while being judicious not to allow water-intensive industries to
open plants in the region.

viii. Recognizing the preciousness of water, thus putting the onus on the industry and
manufacturing plants to preserve this natural resource and tax them accordingly. Ideally, it

15
 must not allow water-intensive industries in the region, and look into relocating the existing
ones to a more suitable location.

ix. Stop indiscriminate setting of industries and plants in the region. The selection and
establishment of commercial infrastructure should not only be decided on the basis of
available resources, but due consideration must also be given to environmental implications
of the industry in the area. Proper field tests must be carried out, at the expense of the
interested company, on whether the location can take on the burden of the unit without
jeopardizing its natural and social health.

x. Expedite the building of canals for irrigation purpose giving due priority to the drought-
prone regions. Make the Sardar Sarovar Dam operational at the earliest, in consultation with
the experts and activists. Relocate and rehabilitate all those villagers and indigenous people
whose life and livelihood will be affected by the Dam at the earliest.

xi. Fundamental reforms are needed in the field of agriculture. Corporate agriculture that is fast
becoming a norm across India has to stop. It all starts with giving the right of seeds to the
farmers, the primary custodian of seeds and food. There should be an immediate ban on all
genetically modified and hybrid seed varieties. The government should conduct thorough
independent research into the effects of GM and hybrid seeds on agriculture, soil,
consumers‘ health as well as its correlation with farmers‘ debt and spate of suicides. At the
same time, Gujarat government should revert to and promote the use of traditional seed
varieties, and simultaneously revitalize the soil health through organic means.

16
Conclusion

In conclusion, I would emphasize that Modi‘s governance model is not sustainable in the long-
term, and has too many hidden costs — displacement of indigenous and rural population, farmers
suicides, encroachment of the commons, agricultural devastation, declining child sex-ratio,
hunger and malnutrition, stagnant employment, coercive land grab to name a few.

Adopting it at a national level would be extremely detrimental to India‘s growth and

development, and would put serious cap on its aspiration for global leadership in the coming
decades. It would not only threaten the very fabric of Indian society as a secular, pluralistic one,
but would also aggravate the existing challenges of economic disparity, hunger and malnutrition,
corruption, injustice and structural violence in this very complex country.

Moreover, Modi‘s image as a hard task master without any respect for pluralism would fail to
encourage confidence in India‘s neighbours. He has two very daunting tasks at hand —
developing a secular pluralistic outlook, and reorienting his governance policies towards
becoming a truly welfare state with a focus on the wellbeing of the common people. Before any
policy change, it demands a critical revision of the worldview which Modi holds dear. Until that
happens, the prospect of him becoming India‘s Prime Minister deserves to be critically debated.
This paper has been an attempt in this direction.

17
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