Number theory: Gujarat’s economic inequality challenge

An analysis of the 2017 assembly results shows that the BJP’s losses were not confined to the poorest regions of the state, suggesting that there isn’t a complete correlation between economic well-being and support for the party in the state.

The Bharatiya Janata Party (BJP) has won every assembly election in Gujarat since 1995. Except for a 17-month period between October 1996 and March 1998 when a splinter-BJP group was in government, the party has been in charge of the state since. For 12 of these years, Prime Minister Narendra Modi was the chief minister . When Modi launched his prime ministerial campaign, the Gujarat model of development was the central theme. Gujarat is among the most prosperous states in the country , although not everyone in the state has enjoyed the fruits of this development process. And an analysis of the 2017 assembly results shows that the BJP’s losses were not confined to the poorest regions of the state, suggesting that there isn’t a complete correlation between economic well-being and support for the party in the state.

Representational image(AFP Photo)

Gujarat’s GSDP is the second highest in the country and its manufacturing GSDP is the highest

According to the Centre for Monitoring Indian Economy (CMIE) database, Gujarat’s Gross State Domestic Product (GSDP) was the second highest in the country in 2020-21, the latest year for which data is available for all major states. In terms of manufacturing component of GSDP, Gujarat was the largest state in India in 2020-21. These rankings remain unchanged if one looks at 2019-20 as well.

Gujarat has economically outperformed India for a long time

Gujarat’s economy has performed better than the rest of the country for a long time now. Except the period of BJP- rule in the state before Narendra Modi became chief minister in 2002, the CAGR of the state’s economy has been higher than that of the country in all distinct political periods in the state since 1980.

There is a regional inequality angle to Gujarat’s success story

A simple way to look at this is to use asset rankings prepared by the fifth round of the National Family Health Survey (NFHS), which was conducted in 2019-21. The NFHS classifies households in asset quintiles (bottom to top 20%). If one looks at the share of households in the top asset quintile, there is a large district-wise disparity in Gujarat. While districts such as Ahmedabad and Vadodara had 50% or more of their population in the top asset quintile, this number was under 5% in districts such as Dahod and Dang.

The intra-state inequality could be a result of uneven manufacturing growth in the state

It is difficult to get meaningful economic statistics at the district-level in India. One exception to this unfortunate trend were the Annual Survey of Industry (ASI) statistics – it tracks registered manufacturing enterprises in the country – that used to provide data at the district-level. However, even the ASI stopped publishing district-level data after 2009-10. While it is a stretch to use data from 13 years ago to make an argument, household asset data from the latest NFHS shows that poorest districts in Gujarat are the ones which fared the worst in district-wise ASI data when it was available.

But the BJP did not do badly in all poor districts in 2017 elections

The 2017 assembly elections in Gujarat were the most difficult for the BJP in a long time. Its seat share dropped to the lowest level since 1995 and the Congress recorded its best ever vote share and seat share performance since 1985. Economic distress on account of demonetisation and Goods and Services Tax and rural distress was among the key poll plank of the Congress in these elections. However, a district-wise analysis of the BJP’s performance in 2017 shows that it will be wrong to draw a mechanical relation between economic inequality and BJP’s political fortunes. While the BJP overcame a significant backlash in a rich district such as Surat to win more than 90% of the assembly constituencies and it did do very badly in some of the poorest districts such as Dang and Narmada this pattern does not hold for all poor and rich districts. In fact, some of the districts where the BJP did badly are among the relatively prosperous ones such as Amreli and Morbi while it was able to repeat in performance in Dahod, the poorest district in the state as per NFHS asset rankings.