ModiNomics Delivered?

In the last six years since Narendra Modi moved to the Centre, Gujarat itself has by and large lived up to its name and credibility through the Gujarat Model. One of the reasons why this has happened is that most of the reforms during Modi’s three terms as chief minister were institutionalised.

23 January, 2020 Economy, Research Reports
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Rohan Kochhar, Director, Public Policy, SKOCH Group

ModiNomics, as a term and concept was coined by SKOCH Group. It was then given concrete shape in the form of a bestselling book titled ModiNomics: Inclusive Economics, Inclusive Governance authored by Sameer Kochhar in 2014, when the Narendra Modi government first came to power at the Centre.

Amongst a host of reasons that brought Narendra Modi to power in 2014, one important factor was his achievement of balanced growth not only on the economic front but also on the development of social, digital and physical infrastructure. His track record of managing the state economy for 13- years as chief minister through the unique ‘Gujarat Model’ stood out.

While he inherited a not so healthy state economy in 2001, he turned it around in a short period of time with his own brand of inclusive economics and inclusive governance, the main ingredients of which were financial inclusion, attraction of private investments, successful public-private partnerships, e-Governance, effective delivery of services to citizens and focus on Small & Medium Enterprises. 

2019 2018 2017
1 5 13
State Ranking over the last three years

All these initiatives and more took Gujarat to the #1 state in the country in successive independent surveys between the years of 2001 and 2014.

Therefore, when the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government came to power in May 2014 expectations were high. There was a genuine belief and conviction that what had come to be known as the ‘Gujarat Model’ was scalable at the national level and replicable in other states.

But then two things happened. One, Gujarat slipped in governance and economic rankings especially during a lean patch when Anandiben was the CM after Narendra Modi. Second, the slowdown of the Indian economy over the last two years has dampened the initial enthusiasm around ModiNomics in some quarters and critics are questioning its very effectiveness and scalability.

Sector 2019 2018 2017
Education 1 2  
Power 1 1  
Health 1    
e-Governance 1 9  
Transport 1 5  
Tourism & Culture 1    
Governance 1   6
Infrastructure 1    
Food & Civil Supplies 2 1  
District Administration 2 3 6
Agriculture 2    
Water 2    
Finance 2 5  
Municipal Governance 3 3 5
Skill Development 4    
Women & Child Development 4 2  
Sanitation 7    
Police & Safety 7 1  
State’s Performance in different sectors in three years

But, today, ground realities point to a different picture. One, in the latest SKOCH State of Governance 2019 ranking, Gujarat has occupied the top slot once again – significantly, after a gap of six years. Second, socio-economic models like ModiNomics require a significant number of years to take root or even to be reversed. Third, all the current important indicators in Gujarat point to an economic and social resurgence even as the Indian economy overall is going through a painful phase of slowdown.

Fourth, SKOCH’s assessment of a resurgence in Gujarat and the stickiness of the Gujarat Model compares well with other independent and credible surveys and studies. According to the Ministry of Statistics and Programme Implementation (MoSPI), during 2017-18, ten states and union territories achieved growth rates above 10 per cent. Gujarat is in the top five alongside Andaman & Nicobar Islands, Jharkhand, Chandigarh and Andhra Pradesh. The Ministry also finds that during the period 2012-18, Mizoram had the highest average growth rate of 12.75 per cent followed by Gujarat (10.00%). Karnataka (9.41%), Tripura (9.16%) and Haryana (8.54%). Further, a January 2019 CRISIL study found that on macro-economic performance, Gujarat and Karnataka were top in fiscal year 2018.

Therefore, the considered conclusion is that ModiNomics delivers and that the Gujarat evidence from various sources bears this out. 

Year 2019
2019 1
2018 5
2017 13
2016 5
2015 2
2014 1
2013 1
Gujarat’s Annual Rank

Economic evidence

In the last six years since Narendra Modi moved to the Centre, Gujarat itself has by and large lived up to its name and credibility through the Gujarat Model. One of the reasons why this has happened is that most of the reforms during Modi’s three terms as chief minister were institutionalised.

Gujarat is considered the petroleum capital of India due to the presence of large refining capacity set up by private and public sector companies. As of July 2018, Gujarat had four refineries with a combined capacity of 101.9 MMTPA. The state is the world’s largest producer of processed diamonds, accounting for 72 per cent of the world’s processed diamond share and 80 per cent of India’s diamond exports. According to the Department for Promotion of Industry and Internal Trade (DPIIT), Foreign Direct Investments (FDI) inflows into Gujarat reached $20 billion during April 2000-March 2019. In this, Gujarat accounted for about 5 per cent share in the overall FDI inflows in India. The state is also in the top ten in the Ease of Doing Business rankings in India, though it has slipped from its top position that it held about five years back.

Today, Gujarat is one of the leading industrialised states in India. At current prices, Gujarat’s Gross State Domestic Product (GSDP) was about Rs 11.62 trillion ($173.24 billion) during 2016-17. Average annual GSDP growth rate from 2011-12 to 2016-17 was about 13.55 per cent. As of May 2019, Gujarat had a total installed power generation capacity of 32,374 MW with a  significant focus on solar energy.

Sector #1
Agriculture? Telangana
Disaster Management Odisha
District Administration Andhra Pradesh
e-Governance Gujarat
Education Gujarat
Finance & Revenue Tamil Nadu
Food & Civil Supplies West Bengal
Governance Gujarat
Health Gujarat
Infrastructure Gujarat
Irrigation Karnataka
Municipal Governance Maharashtra
Police & Safety Telangana
Power & Energy Gujarat
Rural Development Tamil Nadu
Sanitation Telangana
Skill Development West Bengal
Tourism & Culture Gujarat
Transport Gujarat
Urban Development Maharashtra
Water Resources West Bengal
Women & Child Dev Rajasthan
State’s Performance in different sectors in three years

According to research institute Oxford Economics, among all the fastest growing cities in the world, Surat, in Gujarat, will have the fastest economic growth in the world. The city is renowned for diamond processing and trading; IT is its other backbone and the report predicts an average annual GDP growth rate of 9.2 per cent between now and 2035.

Gujarat International Finance-Tec City – or ‘GIFT’ is designed to help India compete with international and regional finance hubs, such as Hong Kong and Singapore. By attracting international investments, the city’s developers estimate they could provide a million direct and indirect jobs, in areas including capital markets, trading and IT services.

Gujarat ranked #1 in logistics in the country according to the National Logistics Index 2019. Gujarat ranked #3 in National Council of Applied Economic Research’s State Investment Potential Index (N-SIPI) in 2018. There are currently 20 operational Special Economic Zones (SEZs), 8 notified Special Investment Regions (SIR) and 202 Industrial Estates in Gujarat.

Financial inclusion has traditionally signified bringing financial services and economic benefits to all sections of society, particularly those at the bottom of the pyramid. In trying to achieve this, Narendra Modi and his successors have taken a broader view of bringing in all sections of the state that can contribute to economic development. Truly, this is ModiNomics at work.

Social indicators

One of the salient features of ModiNomics is its emphasis on various development indicators such as healthcare, farm development, education, women welfare, livelihood and drinking water. A host of successful schemes in this direction point to the robustness of ModiNomics.

Gujarat has introduced a technology enabled community health system called TeCHO+ with an objective to further improve coverage and quality of health services. TeCHO+ is an interactive platform to provide health services to respective beneficiaries at their doorsteps with the two-way exchange of data from the community to health facility and vice versa.

Gujarat Urja Vikas Nigam Ltd has introduced Suryashakti Kisan Yojana with the objective to help enhance farmers’ income. The scheme generates constant cash flow for farmers and in turn, helps in achieving Prime Minister Narendra Modi’s vision of doubling farmers’ income by 2022. The emphasis of the scheme is on promoting the use of renewable energy by way of distributed solar generation.

Gujarat Council of School Education has set up the Command & Control Centre for Schools for effective monitoring of the education system in the state. It monitors the status of various components and activities under the ambit of school education on a real-time basis. New technology has been used to make the Centre more effective and responsive. The integrated centralised real-time dashboard has been set up with BI-Tool for data integration.

The District Panchayat of Ahmedabad has launched an initiative called Pahel, which provides healthy and clean sanitary pads to girls of all schools in the rural and sub-urban area of Ahmedabad district. An eco-friendly disposal system and distilleries for used pads are distributed as part of the project. Menstrual hygiene (such as unavailability of sanitary pads and inadequate sanitation) is one of the major reasons for drop-out of girls.

The Department of Horticulture has launched a livelihood enhancement initiative for the farming community through horticulture in Narmada district. The focus is on engaging a higher number of farmers in banana cultivation and related activities. The initiative has resulted in the generation of more income from per unit area of land. It has helped in the creation of different products like banana sap water, banana stem fibre, banana-based organic fertiliser, banana-based handicraft and textile item production.


“I want to put forward some figures to showcase how we have been progressing economically. In 1995-96, the size of the budget was Rs 10,783 crore. Today, even the vote-on-account has reached around Rs 1.5 lakh crore. This means that both resources and schemes have increased.”

Vijay Rupani, Chief Minister

Vadodara district administration has launched initiatives to ensure healthy and safe drinking water to the common people. The focus of the scheme is to provide drinking water from a surface water source as the quality of surface water is mostly better than the groundwater. During the summer season, local sources like hand pumps, tube wells and open wells run dry necessitating water supply through tankers. With the implementation of the scheme water supply through tankers has now become history.

Gujarat Green Revolution Company Limited (GGRC) has introduced a microirrigation scheme called “Per Drop More Crop.” This is a component of Pradhan Mantri Krishi Sinchai Yojana (PMKSY). GGRC has developed a unique model for the implementation of the scheme and processing of beneficiary farmer’s applications and transfer of assets (micro-irrigation system) and disbursement of subsidy to farmers using the state-of-art information technology.

Gujarat’s Commissionerate of Health and Family Welfare has taken a number of initiatives to improve child health services, with the objective to reduce the Infant Mortality Rate (IMR). It has shown good results in the form of reduction of newborn and IMR in the last few years. The IMR has declined from 33 to 30 per 1,000 live births (SRS 2016) and under-5 mortality – from 39 to 33.

The Home Department of Gujarat Government has introduced the Safe and Secure Gujarat initiative to ensure the safety and security of the common people. The project seeks to establish a CCTV camera-based Surveillance & Integrated Traffic Management System covering Tier-I, Tier-II and Tier-III cities across the state. More than 7,000 CCTV cameras have been installed in 41 cities including 34 district headquarters and seven tourist places in Phase-I.

The Gujarat Labour Welfare Board has introduced a scheme under which primary healthcare facility is provided free of cost to organised labour at their workplace. Mobile Medical Vans have been introduced for providing the service at the workplace. Vans visit the factories as per the schedule defined by the Labour Welfare Board in consultation with the factories. Each van consists of a team comprising a doctor, nurse, pharmacist, lab assistant and driver. Nearly 8 lakh OPD and 1.5 lakh lab tests have been done in the five years of implementation of the scheme.

[tie_index]Digital inclusion[/tie_index]

Digital inclusion

Gujarat encourages the use of technology to bring governance closer to the people and increase transparency and accountability. Over the last decade, Gujarat has developed a strong framework in IT infrastructure and manpower support. The Gujarat State Wide Area Network covers over 26 districts, 225 blocks, 4,400 offices and about 60,000 users. The State data centre supports  42 state applications and more than 200 websites.

Taking technology to the villages, the successful e-Gram programme,  which provides connectivity to 14,000 Gram Panchayats through  VSAT technology is proposed to be upgraded with higher network capability and extended to non-Panchayat revenue villages in order to create strong electronic highway network covering the entire rural area of Gujarat. Strong technology framework has been deployed for more transparent and citizen-centric delivery of services through ATVT.

e-Gram Vishvagram was launched to connect all villages in the state with broadband connectivity as well as provide services. The motivation of the Panchayats, particularly for developmental works, would be lacking in CSCs, which are dependent on private entrepreneurs or companies.  What happens if the company shuts down or is liquidated?  There were many who opted for CSCs but had to leave when they found it wasn’t viable. In the case of Panchayats, which are government funded, if there is a problem the government can step in.

[tie_index]In conclusion[/tie_index]

In conclusion

From all of the above, it is clear that Gujarat is a role model in governance and development. It is perhaps the only state in India where the state government has framed policies in almost all key sectors such as industry, power, ports, roads, agriculture and minerals, women and child welfare, employment, labour and skill development and education. Not surprisingly, it stands as a replicable model of development and competitiveness with amongst the highest GDP growth rate in India. The credit for the current push of reforms goes to its Chief Minister Vijay Rupani. Clearly, Narendra Modi’s vision of ModiNomics as a sustainable and practical social and economic development model is a reality.

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