Industrialists benefit unduly from the Gujarat CM's largesse. Should they care about the decline in the social sector?

Some became extremely shrill. Remember, said a Congress spokesman, how well industrialists adored Hitler. There were also references to the 2002 pogrom which took the lives of around 2,000 Muslims. But industry couldn’t have cared less. This year’s extravaganza, with even more of the cream of Indian business in adulatory attendance, netted promises of investments amounting to Rs 12,00,000 crore — a colossal tribute to Modi’s reputation for ruthless efficiency.

His is not the discreet charm of the accommodating politician but the irresistible attraction of a strongman who delivers. The big draw appears to be the way Modi functions: red tape has been practically banished and government departments take their cue from the chief executive. Thus, clearances come at breathtaking speed, much to the delight of businessmen who value speed above all else. An awestruck Ratan Tata reminded the January 2009 investors’ summit that the Nano project was cleared in just three days!

“I have to listen to my own saying (of 2007) that if you are not in Gujarat you are stupid. Today, I am saying that I am not stupid,” the country’s most iconic businessman was quoted as saying. But then Ratan Tata has special reasons for saying that.

The extremely cosy relationship that industry and the Gujarat CM enjoy raises some troubling questions. What do the Ratan Tatas, Sunil Mittals, K V Kamaths and Ambanis see as the role of politicians? Can generous sops to industry and the speed and simplification of regulations alone be compelling reasons for the adulation of a politician with a spotty record on pursuing development goals and protecting the rights of the vulnerable sections of society? It would appear that India’s business community for the most part is unable to see beyond its nose.

If not, what explains the complete indifference of these men to some shocking revelations about Modi’s Gujarat that were made at the same time the Vibrant Gujarat histrionics were being played out? Top among these is that the state’s record on getting its children into school and keeping them there is dismal. The Annual Status of Education Report (ASER) Rural 2008, the most telling document on education trends, shows 21 per cent of the boys and 30 per cent of girls in the 15-16 age group in rural Gujarat dropping out of school. Worse, the younger children are simply not getting a proper education. Only 59.6 per cent rural children in the Standard 3 to 5 group could read the Standard 1 text against the all-India average of 66.6 per cent. In maths, they fared worse: only 43.1 per cent could do subtraction against the national average of 54.9 per cent, way behind the figures for Chhattisgarh and Madhya Pradesh.

Surely, something is rotten in the state of Gujarat? Perhaps, his business fan following is not aware that Gujarat under Modi has fared worse than most states on almost every index of human development, the worst blot being the dwindling sex ratio. The number of girls per 1,000 boys in Gujarat is just 878, one of the lowest in the country, despite the growing prosperity of the state—or perhaps because of it. The poor indices of overall human development — Gujarat has slipped from first spot to sixth place among Indian states — are a deeply worrying issue for social scientists who have also been sounding the alarm bells on the fragmentation and ghettoisation of Gujarat’s society.

But these are not issues that find resonance in the business community. Instead, there is a belief that all is well with Modi’s state. Nothing but rank ignorance could explain this very recent statement by a leading banker, who is also the head of an industry organisation, praising what he called “Gujarat’s all-round development”. He says: “When I talk about Gujarat as a role model, it is not only to do with GDP growth but also other parameters like human development index, schooling, education, infrastructure and basic services. That is a model which is setting a right benchmark.”

A big part of the answer as to why industry takes such a benign view of the ‘Gujarat model’ could be that Modi makes no bones about favouring this segment over all others. It is a model where public money is used to turn a private venture into a profitable enterprise at the cost of the environment. This is not to say that other parts of India are not similarly engaged but it is a fundamental principle with Modi. A clear indication of this is available in a Government Resolution (GR) on the concessions made to Tata’s Nano project. The GR passed on January 1, 2009, but made public just 10 days ago, is an eye-opener although there have been several speculative reports that revealed the blandishments offered by Modi to bring the Nano to Gujarat. These make the incentives offered by the West Bengal government to the Tatas in Singur look tight-fisted. According to one estimate, tax-payers in Gujarat will be footing as much as Rs 60,000 per vehicle to make the Nano the car of the masses with a price tag of Rs 1 lakh.

It’s a dream package that Modi is giving the Tatas: apart from the 1,100 acres of land and infrastructure sops, there is a soft loan of Rs 9,570 crore that is repayable over 20 years at an unbelievable 0.1 per cent rate of interest. Facilities for solid-waste disposal and effluent treatment plants are to be developed by the state government which will also provide a dedicated power connection of 200 KW to the factory along with 14,000 cubic metres water daily. There are other dispensations, too. The Nano project does not have to recruit 85 per cent of the workforce locally as the state industrial policy mandates.

How can one not love Modi if public money is to fund private industry to this extent? In the old days, industry was brought in to spur infrastructure and employment. That doesn’t seem to be an overriding concern these days, and certainly not for Gujarat. Attracting big-ticket industrial projects is essentially image-building that comes in handy at the time of elections. If you can get a Tata to set up the Nano factory outside Ahmedabad, does it really matter if children in the hinterland cannot read, write or count?

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