Sputter...

At the peak of the communal frenzy in Gujarat, chief minister Narendra Modi stressed repeatedly that the state witnessed riots even during the Congress regime. The economic fallout of the communal carnage was dismissed as one that the people of Gujarat, known for their resilience, could endure. But official figures prove that Gujarat's economy has been a shambles for quite some time. While seven years ago the Congress left the state coffers with a revenue surplus, Gujarat now finds itself pushed into a revenue deficit of Rs 10,000 crore. Government debt is also up from 31 per cent of the net state domestic product in 2000 to more than 37 per cent in 2001. The debt and losses will only rise once the post-Godhra carnage is factored in.

Even the government's much-touted claim that Gujarat is number one when it comes to industrial investment is now being questioned. Says a senior bureaucrat, "The BJP government is fooling the people of Gujarat by its claims." According to him, the facts show that a huge portion of what the government claims as industrial investment is its budget for the Sardar Sarovar Project (SSP) and other power projects of the Gujarat Electricity Board.

A report of the Gujarat chapter of the Confederation of Indian Industry (CII), released in March this year, points out: "Despite the fact that Gujarat has achieved the enviable position in attracting highest investment in the country, one must bear in mind that the major investments are in lumpy (huge) infrastructure projects, including the SSP, refineries, downstream petrochemical units and government investment. This explains the lack of proportionate buoyancy in tax collection and generation of employment."

The gap between projected investment and projects completed tells the real story. The projected investment for calendar 2000, 2001 and 2002 was Rs 1,42,297 crore, Rs 1,67,158 crore and Rs 1,69,007 crore respectively. This put Gujarat ahead of all other states vis-a-vis investment. But the projects completed during November 1999 to October 2000 were worth Rs 14,156 crore, while during November 2000 to October 2001, it was a paltry Rs 2,456 crore, well behind projections.

Major projects currently under implementation are estimated at Rs 61,784 crore. A big chunk of this is the state government's own irrigation and electricity projects, including the Rs 13,180-crore SSP. In the present circumstances when the state seems to be heading for bankruptcy, the million-dollar question is whether a cash-strapped government will be able to raise finances to complete its own projects.

Recently, an association of contractors expressed their anger with the state government over their pending dues amounting to Rs 850 crore. The memorandum of the Gujarat Contractors' Association submitted to the chief minister was very categoric: "Either clear our dues or stop all on-going projects." The contractors warned that major water pipeline projects and the SSP would suffer if payments were not cleared. Before 1995, the Gujarat government seldom went in for overdrafts but now, it has become a routine practice.

Small-scale industry (SSI), which was the backbone of Gujarat's dynamic economy and made Gujaratis famous for their entrepreneurial abilities, is also dying. Thanks to the focus on large projects, the SSI sector in Gujarat has been relegated to tenth position in a study conducted by the Small Industries Development Bank of India. Points out Darshini Mahadevia, a faculty member at the School of Planning of the Centre for Environmental Planning and Technology, "On the one hand, the SSI sector seems to be vanishing and on the other, there is stagnation in agricultural growth. This means a vast majority of people are leading a difficult life for the profit of a select few."

The figures are all there in the state government's own records. A 2000-01 government census of SSI units shows only 1.69 lakh units working out of 2.42 lakh registered units. And, a senior minister reveals, "A majority of those which are working are struggling. At the same time, very few new units have been registered. This is having an adverse impact on the employment scenario." The Socio-Economic Review prepared by the state government for 2001 acknowledges a shortfall in employment generation against 1999's figures.

So much for the BJP's 'Our Gujarat, Unique Gujarat' slogans. It isn't mere coincidence that Gujarat has fallen into reverse gear. Other than the impact of the riots, narrow political compulsions have influenced several key decisions. Also, many tall promises have been made which remain unfulfilled. Notes Madhusudan Mistry, Congress MP from North Gujarat and a political scientist in his own right, "The BJP governments aroused high expectations with their scores of announcements but they never had any intention to implement them."

Another point that many bureaucrats raise is that the BJP has no idea of governance and zero vision. In February 2001, it promised to build eight lakh houses in the earthquake-ravaged Kutch district by June that year. Later, they only distributed building material though many victims claimed they had not received it. But Modi had no compunction in claiming that the government had actually built eight lakh houses.

Points out political scientist Achyut Yagnik, who has been witness to the rough and tumble of Gujarat politics from the '70s, "The BJP did talk of a model state but they had no model. As a result, the Congress culture which it opposed continues. In fact, it took a turn for the worse. This is why when one refers to corruption, people in Gujarat say that during Congress rule, your work would be done once you paid money while with the BJP, they take your money and forget your work."

A government that invites adverse remarks from even the business community obviously will have little to show by way of performance. The government puts under its achievement list the Supreme Court's go-ahead to the SSP after a long-drawn legal battle. The credit here goes to just one man, former minister Jaynarayan Vyas, who was shown the door by Keshubhai Patel and has no place in Modi's cabinet.

As for the impact of the post-Godhra riots, there is considerable evidence that it has hit business the worst. The VHP spin is that there was only selective targeting and that the majority community has not been affected but there is no doubt in the minds of the members of the CII that the business climate has been vitiated. While the state government dismisses any negative feedback as the work of pseudo-secularists and friends of the Congress, even bureaucrats are agreed that post-Godhra Gujarat is on a downward spiral.