However, observers say it is difficult to continue the high growth momentum, and the real growth picture will get clearer if parameters like health and education are taken into account
As it completes 58 years of its formation, Gujarat, once projected as a growth engine of India, seems to be losing its steam. The high growth rate achieved in the 1980s and 90s and up to some extent in 2000-2010 seems to be a thing of the past. However, observers say it is difficult to continue the high growth momentum, and the real growth picture will get clearer if parameters like health and education are taken into account.
According to a book 'Sachchai Gujarat Ki' by Hemantkumar Shah, a professor of Economics at Ahmedabad-based HK Arts College, Gujarat grew moderately in the first two decades of its existence, after it came into shape on May 1, 1960. However, it took off in the 1980s and continued in the 1990s as well, but slowed down in 2000-2010, and has since tapered down. The average growth rate of India also picked up in the 1980s and 90s. But as Gujarat's growth rate was slowing down in 2000-2010, the country further accelerated till about 2014. Gujarat had a lead of over 9% growth rate in the 1980s and over 7% in the 90s. This narrowed down to just two per cent in the next decade. While the state continues to grow faster than the country, the lead is now just nominal.
"The shift from textiles to chemicals and other sectors fueled the growth in the 80s and 90s. This was the time industrial units came up in Vapi, Ankleshwar and other industrial estates. Availability or road and rail connectivity, electricity and financial incentives from governments encouraged economic development in the Mehsana-Vapi belt, also known as golden corridor," Shah told DNA. The year 2001 was a milestone as well. The financial incentives from the state and central governments following the earthquake resulted in growth in Kutch and adjacent places.
Experts attribute the slowing down to high base effect. "After growing at such high rates for so long, the growth is bound to slowdown. Growth should not be looked based on just statistics. Composite parameters like health, education, rural development, benefit to common man should also be taken into consideration," said Jaynarayan Vyas, an economist and a thinker. Vyas feels that one of the most overlooked aspects is that the seeds sown initially played a critical role in emergence of industrial landscape of Gujarat. "Gujarat's growth is because of small businesses. Nirma, Reliance, Cadila, Rasna, all started as small units and later emerged prominently on national map," said Vyas.
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