BIHAR-GUJARAT: THE NEW FACES OF INDIA

Introducing India: fast facts

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Population(2011 estimate) 1,191,349,000 GDP (nominal) $1.367 trillion Per capita $1,124 Unemployment rate 10.7% Inflation 8.33 percent in November of 2010 Growth Rate 8.90% Inflation Rate 9.70% Exchange Rate 44.7050 India Balance of Trade -9118.00 Millions HDI 119

Key Reforms
Opened economy to trade and investment Dismantled controls Lowered tariffs Dropped tax rates Broke public sector monopolies

Development Indicators

Poverty
Literacy
Population

Drivers of Indian growth

Domestic Services Consumption Technology

Key factors

Gujarat State

Mosaic of business environments

Regression analysis of GDP growth of Gujarat

Graph showing the comparison of the GDP growth of India and Gujarat state

Growth Drivers
Economic Incentives for Investment interest subsidy on purchase of capital equipment under technology up gradation
scheme Credit link subsidy Incentives for Technology Up gradation Friendly foreign trade policy

Social Education Medical Services Water Supply and Sanitation Rural Development,Housing Employment Welfare of weak sections Environment

Political scenario of Gujarat

The Positive side of Gujarat politics: The Gujarat model of governance characterised by: 3 Cs- consistency, competency and corruption aversion 2 Ps- Performance orientation and publicprivate partnership management

Well-planned initiatives leading to growth and development.

The Gujarat governments ideology believe in Rashtraniti and not Rajniti has paid off.

Growth and development activities

The negative side of Gujarat politics: Unsympathetic government and highly politicised criminal justice system. The local courts judgements biased. Most of the cases forwarded to the Supreme Court. The victims of Gujarat riots still not punished. The policies and ideology of Hindutva serve the interests of powerful elements of Adivasi communities.

GUJARAT: COMPETITIVENESS
Strategic location High level of industrialisation Highly productive & disciplined workforce Quality network of educational institutions Large, rapidly growing consumer market Major Auto MNCs having a presence across Gujarat. 114 Special Economic Zones approved by GOI aimed at promoting industries Development of state of art industrial clusters such as the upcoming automotive park in Halol and the proposed auto component parks at Rajkot and Ahmedabad.

Contribution of all sectors in GSDP

Gujarat: Sectoral Production

2.4 4.6 9.5 7.4 7.5 9.3

Chemicals & Petroleum Food Processing Metallurgical Industries Textile & Garments

59.3

Engineering Mineral Based Others

(Source: ASI)

 GUJRAT WITH A DIFFERENCE events: Some important

The first state to

Implement BOT Law Two fully functional LNG terminals. Implement the interlinking of 20 rivers. Uninterrupted 24hour 3phase electricity

Tata Nano Vibrant Gujrat Summit SEZ

Challenges
Corruption at lower level Complete bureaucracy The Tribal region of South and North Gujarat is lagging behind. Reduction in quantity of ground water

What other states can adopt from Gujarat model?

Himachal Pradesh:
Like Gujarat, 'banjar' (barren) land can be acquired for SEZs

Karnataka:
Land acquisition model of the Gujarat government Jyotigram-Model PPP model in infrastructure projects Putting down corruption and also improve the tax collection using the modern technology (GPS)

Maharashtra:
Ruling party, the Opposition and the media should join hands for the development

Tamilnadu:
Gujarat model of farm growth like sprinkler and drip irrigation, provision of quality seeds in adequate numbers and the shift from raising cereals alone to high-value crops.

Uttar Pradesh
PPP in constructing state highways

T h e Ta l o f N e w B i a ri e h B abu

Bihar-Governance model
Development with justice' an aim of the state. The growth fuelled by reinstating basic governance model in place Government-induced growth- boom in agriculture and services sectors Development due to discipline ad sturdy administrative qualities.

The Growth Story!

How did it Happen?

Law
and order Only 317 kidnappings as against 1393 in the last four years Speedy trials-fast track courts SPECIAL COPS 38,824 convictions between 2006 and September 2009 New laws and policies adopted Economic Development spending rose Better connectivity and infrastructure.

Investment Increased in public and private sector

Model Tax System

f Bihar dropped by 18 percent(3700 crores) in 2006-07 and further by 44 percent(17

Sectoral Annual GSDP Growth

Contd....

Construction sector is growing by a whopping 35.8% per year. Telecom in the state grew by 17.68% per year. Trade, hotels and restaurants grew by 17.71%. Automobile sales in the state grew 45% The number of tourists increased from about 1 lakh to almost 4 lakhs.

Achievements
World Bank ranked Bihar 14th for being the easiest place to start business in India Covered the journey from Bimaru state to second most developing state in the country GDP contribution -14th in Indian GDP Tourism industry quadrupled in last four years. Real estate sector boomed up. Bihar -a better place to live in. Security plus road and telecom expansion have incubated a boom in small business and domestic construction. Large private houses coming up.

Challenges
Little growth rate in manufacturing sector Power sector is a major hurdle. Need more time for social indicators to become visible. feudal land laws need a major transformation. Central rules acting as a stumbling block for various investment proposals. Unpredictability of the states politics

States that can adopt Bihar Model

Orissa Drafted an anti-graft law Can Adopt property tax model Can adopt special cops services and heavy police patrolling Madhya Pradesh Properties of corrupt officials confiscated and schools opened. Adopted property tax model Can adopt special cops services and heavy police patrolling

Contd....
Karnataka RTI applications via telephone. Adopted property tax model BIMARU states can adopt Bihar law and order model . States with high crime rate like Tamil Nadu, Haryana, Jharkhand can adopt Bihars Governance model.

Bihar and Gujarat

Similarity Development and corruption-free model Difference The Bihar model has a better chance of being replicated at the national level its a rainbow coalition of all classes Bihar started with a low base growth rate whereas Gujarat's base has always been strong

Comparison between Gujarat and Bihar Growth models

Gujarat
Entrepreneurial strength Progressive policies Political will of the government Good industrial relations Well-developed infrastructure

Bihar
Improvement in law and order Breaking the strong link between crime and politics Growth is largely centered in construction

Narendra Modi and Nitish Kumar run their states as CEO s and Not as CM s

References

References http://swaminomics.org http://economictimes.indiatimes.com http://www.accommodationtimes.com http://www.thenarendramodi.info http://projectsinfo.in http://www.indianexpress.com http://www.naredco.in http://www.forumfed.org http://bihartimes.in http://business.in.com http://www.thehindubusinessline.com http://economictimes.indiatimes.com http://www.indexmundi.com http://www.thehindu.com