Kerala Model vs Gujarat Model

  • Category
    Economy
  • Published
    31st May, 2019

Issue

Context:

Ever since they became the issue of debate between Jagdish Bhagwati and Amartya Sen, Kerala model and Gujarat model debate has continued and has remained relevant.

About:

In a broad sense, the Gujarat model privileges growth and infrastructure development. The underlying logic was that growth and industrial development will play a bigger role in reducing poverty.

The Kerala model, on the other hand, privileged a rights-based approach to development with a strong emphasis on social and human development.

Bhagwati was a strong votary of the Gujarat model and Sen, the Kerala model. Bhagwati described the Gujarat model as a metaphor for a primarily growth and private entrepreneurship driven development and the Kerala model for a primarily redistribution and state-driven development.

Background:

Amartya Sen had upheld what he calls the “Kerala experience” — high social spending resulting in growth — as a role model for other states to follow.

He is of the view that the Gujarat development model suffered from weaknesses on the social side and could not be considered a success.

Sen had proposed a multidimensional approach to measuring poverty than based on consumption alone. He also developed the capability approach, along with the likes of Nussbaum, a concept that inspired the creation of the UN’s Human Development Index.

The capability approach brings in various factors, including individual freedoms, which were excluded from welfare economics earlier.

Analysis

Both the models are entirely dissimilar in terms of approach to development. Kerala Model focused on marching to economic development through desirable social changes while Gujarat Model tries to bag desirable social changes through sound economic anchor.

Both models have many accomplishments and impairments. The discussions are on which model of development that India should follow. As far as a national economy is concerned, it is important to derive and prioritize the good aspects of the two models.

Theoretical and empirical evidences suggest that there is a positive relationship between economic growth and social development. However, the economic development has not been necessarily accompanied adequately by social development, especially in case of Gujarat.

It is reinforced by the Human Development Index (HDI) position of Gujarat. Kerala has performed positively in terms of social indicators but economy has been in disarray, as it is ranked among bottom half of the country.

The Kerala Model distinguished all over the world. While Gujarat Model is weak on education-health standards even though improving, Kerala Model made the globally comparable outcomes in it at the backing of poor economic standards.

At that, Kerala which is blessed with top standard social indicators trails by high crime rate against women and children and suicide rate.

Biggest paradox in these models of development is highest unemployment rate in Kerala with lowest poverty ratio and lowest unemployment rate in Gujarat with higher poverty ratio.

Even though these two transverse models lead or trail in transverse indicators of development, lead the national average mostly.

Sector-wise Analysis of Kerala-Gujarat Models of Development

A. Economic Sector Development:

  • The investments and incentives in economic sectors like industries and agriculture are required for the development in economic sectors.
  • Gujarat state economy in terms of NSDP at current price is been much larger than Kerala economy for decades with about one time high.
  • Although Kerala’s NSDP at current price is far below to Gujarat especially since economic reforms initiated in nineties, Kerala is just below to Gujarat in the case of per capita NSDP at current prices.
  • The betterment of Kerala in per capita NSDP shows its inclusive nature of development while that of Gujarat is more exclusive as its phenomenal economic growth in the current decades has never been accompanied by respective growth of per capita NSDP.

B. Agricultural development: Gujarat’s sustained growth & Kerala’s declining share

  • Agriculture and allied sector plays an important role in the State economy.
  • Though Gujarat was able to maintain a pretty balanced sector-wise development over a period of two decades with about one-fourth of state income come from agriculture and allied sectors and one-third from industrial sector, Kerala agriculture witnessed significant breakup. Contribution of primary sector of Kerala declined sharply from 33.1 per cent in 1993-94 to mere 12.9 per cent in 2013-14.
  • Even though half of Kerala’s working population also resort to agriculture and allied activities, Kerala agriculture suffers from serious drawbacks.
  • It puts threat over sustainability of the famed inclusive growth model of Kerala.

C. Industrial development: Gujarat’s success story & Kerala’s painful experience

  • Gujarat is an industrially sound state unlike Kerala with the large inflow of investment and abundance of entrepreneurs. More than one third of the state income of Gujarat come from industrial sector.
  • The state of Gujarat is one of the highly industrialized states in India with its reputation of being a highly investor-friendly state.
  • On the other side, though Kerala economy struggled hard to recover from its chronic industrial backwardness, even economic reforms have never helped the state to flourish investment and industrial production.

D. Infrastructure development for sustained growth

Power Sector

  • Gujarat is clearly the power house of India with 16 per cent of India’s installed capacity while that of Kerala is nominal with mere one per cent in 2015.
  • Gujarat with the commendable share of 11.34 per cent was able to diversify its power generation capacity to the renewable resources such as wind, tidal and solar energy while mere 1.24 per cent of Kerala’s installed capacity was from it.
  • Shortage of power is the prime obstacle in starting new industrial units in Kerala.

Social Sector Development

Kerala’s development and achievements on social front has been lauded in both national and international circles. The progress made in the realm of education, health and gender development have been noteworthy.

Literacy

  • While Kerala is at first among Indian states and union territories in adult literacy with 93.91 per cent, Gujarat is far behind at 18th with 79.31 per cent but well above the national average of 74 per cent.
  • Kerala began with a huge advantage in literacy over the rest of the country at independence.
  • Both Kerala and Gujarat gained 40 per cent rise in adult literacy in 50 years from 1961 to 2011. While literacy ratio rose from 55.08 per cent in 1961 to 93.91 in 2011, Gujarat managed to elevate the ratio from 39.33 per cent to 79.31 per cent.
  • In fact growth of these two states in literacy in the same period are less to India which has managed to lift the ratio from mere 12.95 per cent to 74.04 by gaining 61 per cent.

Health scenario

  • Kerala ranks first in India in all major health indicators such as life expectancy at birth (total, male and female), infant mortality rate, maternal mortality rate, fertility rate and birth rate.
  • Life expectancy of Kerala which is 74.8 years in 2013 is much better than that of Gujarat and India where it is 68.2 and 67.5 respectively and very much comparable to that of US which is 77.
  • Gujarat though lies extremely below Kerala, lies little above the national average in all major health indicators.
  • Physical quality of life index (PQLI) of Kerala which measures only major social development indicators such as literacy, life expectancy and infant mortality is highest in India with 92.64 in 2013 while it is mere 77.1 in Gujarat.
  • At the same time India’s national index is 73.88 even lower than Gujarat.

Women & child care

  • The statistics released by National Crime Records Bureau (NCRB) shows that encroachment and incursion on women is common in India.
  • Kerala Model praised on women centered development shown by female dominated sex ratio, enrolment in higher education and life expectancy comparable to developed countries is entirely set down in ensuring safety to its mother community.
  • Crime rate against women in Kerala is 62.43 in 2013 while that of Gujarat is lower i.e. 42.63. While crime rate in Kerala is clearly above the national rate 52.24, Gujarat’s crime rate is clearly below that.

Major development issues: Poverty & unemployment

  • Though Kerala ranked first in case of low poverty ratio, Gujarat is at 14th among Indian states with a higher 16.63 per cent but lower than the national ratio of 21.92 per cent as per Tendulkar Methodology.
  • The biggest paradox in the Kerala-Gujarat Models can be seen in unemployment and poverty. While Kerala is the state with lowest poverty ratio in the country, it is amongst the states with highest unemployment rate of 98 per 1000.
  • Similarly, Gujarat is the state with lowest unemployment in the country, it ranked mere 14th among the states in 2011-12.
  • This is not the most notable issue in the paradox of Kerala Model. The NSSO report shows that Kerala has highest gender disparity in unemployment with 232 females per 1000 are unemployed as per usual status in 2016-17 while 41 males are also unemployed.
  • In Gujarat, both gender disparity in unemployment and unemployment rate are minimum in the country.

Concluding notes:

  • Although Kerala Model and Gujarat Model are contradictory to each other, both are inevitable models of the country. While Kerala has advantage in some sectors, Gujarat has advantage in some other sectors.
  • Obviously both models are different approaches to development. Gujarat, a high income state in the country is a step ahead to Kerala in income per capita.
  • Gujarat’s process and progress in agricultural and industrial sectors have really erected it to the top income generating states. Decent and constant share of these sectors to NSDP of Gujarat economy demarcated it from Kerala.
  • But Kerala has really done well in improving its per capita NSDP. Unlike Gujarat, Kerala economy really suffered from diminishing share of agriculture and stagnant share of industries.
  • States of Kerala and Gujarat are more or less ahead of national average in various socioeconomic indicators of development. It depicts obviously the real picture of under-developed India which consists of BIMARU states which are flagrant for deplorable performance in many indicators.
  • However, Gujarat and Kerala are even below the national average in some indicators. While Kerala and Gujarat are above the national rate in case of suicide rate, it’s only Kerala which stands behind India in cases of unemployment rate and, crime rate against women and children.
  • Starting with decent figures Kerala gets at the stage of exquisite maturity in health and education while Gujarat starts from a lower level and pass by better standards of health and education.

Learning Aid

Practice Question:

The Kerala model is as much about growth creating better human development numbers. By implication, it means that if Gujarat continues to grow faster, the social indicators will change here too. Critically evaluate.

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