Can the Gujarat Model work in Delhi?

When Chief Minister Narendra Modi took the reins in 2001, Gujarat’s electricity supply was almost at the same level as the rest of India’s. Gujarat had a 500 megawatt demand-supply shortfall, with revenues of $1.1 billion and losses of $393 million. Ten years later, Gujarat boasted a power capacity surplus of more than 2,000 megawatts, which it now exports to other states. It made $93 million in annual profit from $3.8 billion in revenues.

The first thing the Modi government did was to separate the agricultural and household feeder lines that supply electricity. Then it set up electricity police stations where over 100,000 cases were registered against power thefts. With more revenue, the state was able to invest in a more reliable grid. Thus Gujarat became the only state in India to supply 24/7 three-phase power to all of its villages.

Moving towards smart metering and intelligent rationing of power, the state protected the depleting groundwater levels, and brought down the transmission and distribution losses to 20%, which is impressive by Indian standards.

But what Gujarat really excelled in was the building of world-class infrastructure. Even the World Bank has observed in 2011 that Gujarat was able to achieve this exceptional feats because of public and private sector synergy. An open and transparent bidding was used for all works, especially those valued over $1 million. The Annual Plan Budget for the road sector underwent significant growth to $260 million in 2007-08 from $26 million in 1995-96, and further to $550 million in 2010-11 in current price terms.

Modi privatised Gujarat’s ports, an unusual move in a country where most ports are government-owned. As a result, the state now ships more than 40% of India’s industrial output and about 70% of petrochemical production.

Agriculture and water management was yet another achievement of the Gujarat model. A semi-arid state, Gujarat has clocked 9.6% annual growth in agriculture since 1999-2000. This is because the government used agricultural research to educate farmers, and created farmer-scientist interaction. It opened up markets, expanded irrigation and invited private investment.

The most celebrated aspect of the Gujarat Model is the Vibrant Gujarat Summit, making Gujarat the most attractive investment destination. The magnificent success of Modi lies in tapping the talent and resources of India’s most enterprising community – the Gujaratis.

According to Assocham, foreign and domestic private sources account for more than $175 billion of the $245 billion of total investment in December 2012.

Mr. Modi’s style of bringing all concerned government executives into the room and then pushing them towards decisions is very different from the lethargic consultations that governments usually follow.

The crowning feature of Modi’s leadership is the use technology to improve governance. It is reported that he plans to connect India’s 250,000 village governments with satellite dishes and broadband to create information superhighways. He is likely to create a new Delivery Monitoring Unit, which will speed up decisions and revive stalled projects. Also expected is a focus on neglected but potentially rich sectors such as fisheries, horticulture, aqua culture and food processing such as to target niche export markets for them.





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