A Comparative Study of Gujarat and Kerala Developmental Experiences

Article

A Comparative Study of Gujarat and Kerala Developmental Experiences

International Journal of Rural Management 12(2) 104–124  2016 Institute of Rural Management, Anand SAGE Publications sagepub.in/home.nav DOI: 10.1177/0973005216660908 http://irm.sagepub.com

Sazzad Parwez1 Abstract This article examines the experiences of economic growth and social development with reference to comparative analysis of Gujarat and Kerala. Different aspects of economic growth and social indicators have been observed. 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. This study is based on secondary data gathered from several government and international organizations. The article concludes by arguing that the governments should be equally concerned about both social development and economic development. Keywords India, Gujarat, Kerala, economic, social, development

Introduction Economic and social development are suggested to be interrelated, one leads to another. Studies suggest that mere focus on the economic development and ignoring the social development leads to weak and unsustainable development.

School of Rural Management, Indian Institute of Health Management Research, Jaipur, Rajasthan, India.

1

Corresponding author: Sazzad Parwez, School of Rural Management, Indian Institute of Health Management Research, Jaipur, Rajasthan 302029, India. E-mail: [email protected]

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However, it has been observed, the main emphasis has been on economic growth and not on policies on education and health driven development. Deprivation mainly in terms of education, health and adverse quality of life eclipses the economic development in general. Planning and strategy for allocation of resources between economic and social sectors and necessary policy decision are in need for the nation. Giving due importance to social sectors in the light of economic growth and gains from the benefits of demographic dividends would lead to development of human capital. Disparity in economic and social development is generally a cause for despair in a democratic set-up. However, such disparities have not received adequate attention. Of late, governments are giving due attention to the facet of deciding resource allocation across the country. Whenever allocation of resources among states took place to address the problem of regional disparity, one or the other theory gets acceptance of the policymakers over the rest of the competing alternatives due to factors of political economy (Dholakia 1980, Roy and Bhattacharjee 2009). In context of social factors, such as education and health, it has been observed that attainments of these social services are low in nature. Low level of accessibility leads to higher inequality on the social and economic front. United Nations Development Programme (UNDP) (2011) reports that inequalities in India at a disaggregated level suggest that disparity in the dissemination of education is the highest among all other socio-economic factors. It requires special attention on the part of the government to be inclusive for socially backward communities since they continue to witness constraints in accessing education. It has been argued that the rapid economic growth of India in the contemporary decade was due to the ever-increasing investment in human development in the preceding years (Kurian 2000). On the contrary, the Kerala model of development leads to high level of human development without complementing with economic growth which brings focus back to the role of public expenditure on social sector (Chakraborty 2003). Several questions have been asked about the Kerala model in context of resource crunch in the state with high level of social expenditure and fast deteriorating financial picture. Gujarat lying in western corner of the country showcases a completely different picture from Kerala. Being one of most developed state with respect to economy does not live up to the promise of social development; it even lacks gravely in most basic social facilities (education and health). Disparities in the overall economic development can be understood in terms of fluctuating levels of infrastructural facilities that prevail in different states. Development of infrastructure is indispensable for increasing efficiency of the production system and productivity of economic activities (Parwez 2014). An attempt has been made in this article to study the regional disparities in India with special reference to Gujarat and Kerala. Economic and social disparities are not only affected by production and consumption. But it largely depends on several direct and indirect externalities.1 The literature shows that there are studies investigating the correlation between economic and social disparities. It also suggests that social indicators do play a part in Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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increase of productivity, creation of income and employment for the economy and eventually raises the quality of life for the people (Esfahani and Ramirez 2003, Gramlich 1994).

Relevance of the Study This article is an attempt to have an open discussion about prevailing social and economic disparity across the country. It tries to compare two very different states, evolving on the basis of contrasting developmental model. The ‘Gujarat Model’ which is primarily based on physical infrastructure and revenue generation facilitated by the state government while the ‘Kerala Model’ is based on equitable distribution led by the state machinery. Several scholars have compared Gujarat and Kerala with states such as Bihar, Tamil Nadu, Maharashtra and several smaller states like Uttarakhand, Chhattisgarh and so on due to their contradictory nature of developmental factors. Gujarat and Kerala with their heterogeneous developmental experiences provide an opportunity to study and understand implications of two different development processes. As a state Gujarat is highly industrialized with higher gross domestic product (GDP);2 on the other hand, Kerala is not. Gujarat has attracted high amount of foreign direct investments (FDIs); Kerala on the other hand is less successful on this count. The lack of investment and industrialization in state is attributed, on many occasions, to deep-rooted unionism and political activism influencing the economic decisions. Economists Bhagwati and Panagariya (2013) have initiated the debate over Gujarat and the Kerala development model—the former being private investment-led growth and the latter for state-led public investment in the social sector. In policy dialogue, Kerala is considered as the definitive example of human development; this is said to be the dividend of state spending on social indicators like education and health. Gujarat fares poorly on social indicators, but is high on economic growth led by entrepreneurial activities of the people. The present study is based on socio-economic developmental experiences of Gujarat and Kerala models in perspective. It studies both developmental models with respect to several economic and social indicators. It tries to enhance understanding of socio-economic disparity in India with a comparative study on Gujarat and Kerala (Dholakia, 2006).

Research Methodology The study is mainly based on secondary literature and data sources. Data have been collected from various sources such as government reports international organization reports as well as data and reports of different departments of government of India, Census of India, National Sample Survey (NSS), National Family Health Survey (NFHS) and UNDP. Data have also been taken from various peer-reviewed working and research papers of national and international journals. Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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Four major indicators have been taken for assessing the overall economic and social development for this study. These are economic, women development, health and education. These four major indicators comprised of several subvariables of significant nature. This article attempts to examine interstate inequalities in India particularly referring to Gujarat and Kerala in terms of the following major and minor variables: • Economic development (state domestic product (SDP), poverty line, workforce, worker population ratio and head count index). • Women social demography (females per 1,000 males, child sex ratio, mean age for marriage for female, literacy rate and workforce participation). • Health (life expectancy, infant mortality rate (IMR), institutional deliveries, postnatal care, child immunization, anemia among pregnant women and government hospital bed). • Education (literacy rate, children attending school, expenditure and school management). The limitation of this study is the lack of availability of disaggregated data of some major social and economic indicators with respect to rural and urban category. Interstate study is also vulnerable to the quality of available statistics due to practice of fabrication and exaggeration of data to create false perception of the states in national standing in order to gain political mileage and avoid uncomfortable questions on development.

Theoretical Perspective Regional disparity is the foremost concern in several developing countries. Neoclassical growth theories suggest that the movement of supply elements; especially capital, technological advancement and work force, would be a cause for decrease in state-wise disparities. Theories on dependency and structural change say that regional inequality is an unavoidable product of the practices of capitalism. Academic bodies and scholars have discussed the regional disparity as a broader issue, especially the Ricardo’s two sector model talks about focused economic growth and sharing within agricultural and industrial sector leading to growth towards a steady state with decrease in income for farmers (Boyer 1996). Marx has also pointed that capitalist economy will lead to unequal distribution of income; it would push the wages to the subsistence level (Kalecki 1971). The neoclassical growth models say that economies across the world are similar in nature in terms of priorities and technological inclinations. NeoKeynesians economist such as Steindl (1952), Kaldor (1955), Kalecki (1971) and Pasinetti (1981) have highlighted the relationship between distribution of income and implications on existing disparities. The neoclassical growth theory (Solow model) puts emphasis on capital accumulation and decision

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of saving as a significant determinant of the economic development. It considers two factors of production, capital and workforce, as defining factors for output. In context of relationship between inequality and well-being of population in two sector economies, Kuznets’ hypothesis (1955) argues that in a two-sector economy with sectoral mean incomes, a persistent movement of workforce from one sector to another may increase the overall disparity. This phenomenon led to the term ‘Inverted U’ (I–U) hypothesis. With disparity within economies on rise, it has facilitated emergence of ‘convergence hypotheses’ owing to seminal theoretic influences on endogenous growth models from Romer (1992) and Lucas (1988). Regional disparity has been the most important issue before federal India and policymakers. The significant gap between the economically developed region and the poor regions is determined by the availability of physical and social infrastructure-led development. It results into positive implications on economic and human well-being. Dreze and Sen (1995) argue that huge deviations in the regional development along with contrasting nature of social development have given rise to extraordinary disparities in India. Additionally, with the long-term planning and processes for raising the quality of rural living, challenge has been diverse in nature across the country (Datt and Ravallion 1998). Similarly, Majumdar (2004) has noted that states such as Kerala, Maharashtra and Himachal Pradesh reflect stable performance with respect to social development, although Kerala is not able to translate its social development achievements into economic development. In spite of the prevailing low human development, Gujarat has constantly shown good performances on economic indicators. These factors are also observed by India Human Development Report (2011) as significant inequality in the social development across the Indian states. The state-wise disparity in poverty has been considerable though there have been some improvements in the human development and the poverty index since 1980s; the interstate inequalities and the relative status of the states has basically continued to be the same. Dreze and Sen (1995) noted that the inequality in social and economic progress across the states is extraordinary. Datt and Ravallion (1998) in a study on poverty observe that states have varying capabilities for poverty reduction due to multiple reasons. There is substantial variance in elasticity of the poverty index to non-farm output among the states in India. Positively, there is low elasticity for poverty in Kerala due to the high level of literacy status. Higher level of education leads to better utilization of available resources and opens up opportunities to be exploited. It also observes that physical infrastructure apparently contributed to a larger extent in poverty reduction as it has been observed in case of Gujarat. Furthermore, it has been noted that disparities in quality of life across rural–urban regions and sectors is a major concern. Bhagwati (2013) on the other hand suggests that it is ultimately the investment-led development of infrastructure and economic growth which will lead to the reduction of poverty. Social factors such as education and health can play the role of value addition in the economy rather than the architect of economic Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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development. The fundamental argument is that the effect of economic development largely depends on utilizing fruits of economic growth. Dreze and Sen (1995, 2013) says that government emphasis on education and health care determines public participation which is evident and easier for economies such as Kerala, but may not be possible in Gujarat, where social developmental activities are slow. Kerala on the contrary, with an impressive record with respect to education and health factors, has failed to attain higher economic growth.

Disparities in India During the initial part of the post-independence phase, considerable amount of disparity in the economic and social development took place in states across India. The major goal of the planning initiative was taken by the government in early 1950s. The aim was to decrease inequality and to realize balanced development. Several policy instruments such as direct public investment and restructuring of institutions have been put in place for the first few decades after independence. These processes ensured that disparities were not getting further aggravated. Economic reforms and liberalization in the early 1980s and then full-scale reforms and restructuring in 1990s led to decrease in public investment (Ahluwalia 2008). Investment from private sources becomes the principal source of economic development as flow of capital to the regions where environment for conducting business activities are more feasible. Therefore, states with better physical and social infrastructural settings attracted larger share of investment since economic reforms. Bagchi et al. (2005) highlight that major share of investment went towards southern and western India such as Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh and Karnataka. Backward states like West Bengal, Chhattisgarh, Jharkhand and Orissa have also received private investment proposals, in recent times, for setting up mining and heavy industries mainly due to abundance of natural resources such as iron and coal. States which lack natural resources can only attract investment if they provide suitable environment accompanied with physical and social infrastructure; it is only possible with heavy public investments. But fiscal situation of several state governments is not that conducive for such investments (Kurian 2000). State governments across India are suffering from huge revenue imbalances, and hence such investments are small. In some of the backward states, a large part of their expenditure goes into education, health, drinking water, sanitation, road connectivity and so on, and hence are facing acute situation (Kurian 2000). Per capita income differentials among states in the country have been very much visible and broadening even more. Thus, while the economic development is shifting in the south-west direction, it is complemented by the demographic movement from the opposite direction. While more job opportunities are generated in these states and available labour surplus in the backward states in India inducing large-scale migration. This may lead to serious implications on nation’s health. The interstate comparison of states highlights indifferent performances in respect to factors such as poverty, rural–urban disparity, unemployment, education, health and financial inclusion. Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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The three most important dimensions of HDI, that is, education, health and income are attuned to disparities across the population. Internationally, India is ranked 119 out of 169 countries but loses 32 per cent of its value when adjusted for inequalities (Deaton and Dreze 2002, HDI 2013). To simplify a state-wise comparative study, the indices are normalized with the mention of goalposts defined in the HDI report (Dholakia and Dholakia, 1980). As per global goalposts reference, Kerala’s ranking is 99 (falls in the middle of Philippines and the Republic of Moldova) while Orissa is ranked at 133 (between Myanmar and Yemen). Amongst other Indian states, Madhya Pradesh observes the highest increase in inequality. Ahluwalia (2002) observes that differences found in HDIs for interstate comparative analysis with other countries suggest that inequality in the human development is clearly more pronounced in the Indian states than elsewhere. Figure 1 reflects on the HDI status of major Indian states both at the aggregate and disaggregate counts. Overall, India’s HDI value (as per global goalposts) is 0.504. Kerala with the highest value of 0.625 is being followed by 0.569 of Punjab and Orissa lies in the bottom with 0.442. Gujarat has shown improvement with 0.511 from the earlier position (India Human Development Report, 2011). Figures on HDI values among the states reflect negligible variation and the sub-indices for education and health display higher variations. The income index displays the least amount of variation. There are large spatial imbalances, biased to the states comprised of better physical infrastructure for urban industrial corridors and attract the large share of investment (Ghosh 2006, Parwez 2015). The hilly areas in the north-east and eastern states which lack adequate infrastructure and environment has witnessed negligible investment, low growth rate and employment generation. The developmental spillover effects have been uneven and low in case of north-east and eastern states (Suryanarayana, Agrawal and Prabhu 2011). Gujarat’s economic growth in comparison to other states has been much better and has topped the list, regardless of the period taken (Hirway, Kashyap and Shah 2002). The ill effects of trade unionism (strikes and lockouts) are widespread in Kerala which is reflected through industrial activity and productivity, but Gujarat has been largely untouched by that. Gujarat has constantly witnessed lowest amount of strikes and lockout-led man days lost in comparison to other states in the country (Labour Bureau Report 2013).

Socio-economic Study of Gujarat and Kerala Jagdish Bhagwati and Amartya Sen, perhaps the two utmost dominant voices among Indian economists, exemplify the two different schools of thought about the India’s development path. Bhagwati argue that growth must be viewed as an instrumental tool; a procedural consequence that would decrease poverty and regional disparity. He asserts that there is a need for land reforms to develop better physical infrastructure for addressing the issue of undue concentration of economic activities and likely widening. Sen argues that the conception of development should not lead to only capital accumulation and increased GDP. Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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Source: Source: Human HumanDevelopment Developmentreport, report,Government GovernmentofofIndia India(2013). (2013). Note: Note: Vertical Verticalbars bars(orange (orangefor forstates statesand andred redfor forIndia) India)specify specifythe theHDI; HDI;black blackcircles circles(inside (insidethe thebars) bars)specify specifythe theeducation; education;the thecross crossinside insidewhite whitesquares squaresreflect reflecton on the theincome incomedimension dimensionand andblack blackdiamond’s diamond’s(outside (outsidethe thebars) bars)indicate indicatehealth healthdimension; dimension;and andthe thestates statesare areorganized organizedininascending ascendingorder orderofoftheir theirHDIs. HDIs.

Figure Figure2. 1.HDI HDIand andits itsDimensions: Dimensions:Indian IndianStates States

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Bhagwati says that the development process consists of savings used for investments; education comes later on. His argument suggests that growth would lead to demand and then to creation of employment. He considers literacy and education additive factors rather than major catalyst of development. Amartya Sen has a broader view on development; he argues that aspects such as political or social freedoms are the most significant factors for ‘development’ as freedom is the fundamental element of development. The principal variance is in their view on developmental approaches. Dreze and Sen (2013) envision a larger role for the state and prescribe state intervention in providing basic social infrastructure to facilitate health care and educational accessibility for the citizens. They show that 20 years of sustained economic growth in India has not resulted into corresponding improvement in the social development. The high economic growth in Gujarat has not translated into proportionally better social outcomes. For this reason, Dreze and Sen consider the Gujarat model as a weak one. In a similar vein, Hirway (2013) also questions whether the economic reforms inaugurated in Gujarat in the 1990s were capable of realizing more inclusive social outcomes. Sen has offered more compelling case of Kerala as a better example for model of inclusive social outcomes. Bhagwati and Panagariya (2013) argue that eventually it has been the Gujarat model that has shown positive results on economic and social development front since post-Independence. Furthermore, they argue that Kerala’s lackluster performance in terms of economic growth and per capita GDP has been lackluster. Bhagwati (2013) argues that the ‘Kerala Model’ comprises massive systematic public expenditure on education and health for long period of time achieved due to aware and participative citizens. Comparing social indicators pertaining to Gujarat, Kerala and a few other states, Sen identified various developmental indicators suggesting that Gujarat ranked well below to states such as Tamil Nadu, Himachal Pradesh, Kerala and few other major states. ‘Kerala Model’ represents an example of a predominantly redistributionoriented and state-led development initiative whereas ‘Gujarat Model’ talks about the economic growth and enterprise-led development model.

Economic Status Gujarat and Kerala are two very different kinds of states in terms of various social and economic variables. Gujarat is industrialized state; Kerala is barely so. Economic indicators such as FDI are taking place in Gujarat at high numbers while Kerala has received lukewarm response in that front so far. The SDP (2011–12) of Kerala (`61,176,700) for both rural and urban regions is significantly higher than that of Gujarat (`31,520,567) (Table 1). Average annual growth of gross state domestic product (GSDP) of Gujarat (2000–01 to 2007–08) increased considerably with 9.20 per cent as compared with 7.76 per cent of Kerala. Interestingly, both the states are doing much better than the national level growth in GSDP which was just 3.98 per cent for the same period (Government of India 2012). It has been observed that Gujarat’s growth rate is highest in the last two decades, being closely followed by states such as Karnataka, Maharashtra, Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

Percentage of population below poverty line (2012)**

Unemployment rate***

Worker population ratio (2011)***

Head count index of Poverty**

2

3

4

5

12.60

38.2

82

9.14

Urban

12.00

36.3

145

4.97

16,777,595

Kerala 14,742,972

Rural

26.7

44.7

7

21.50

Urban

39.9 33.80

17.9

34

25.70

Urban

20.90

35.5

50

13.70

407,820,689

All India 427,528,811

Rural

36.3

15

10.14

36,124,998

Gujarat 25,051,702

Rural

Sources: *Government of India (2012), **Government of India (2013) and ***Labour Bureau Report (2013).

GSDP–Value added (2011–12)*

Indicators

1

Sl. No.

Table 1. Comparative Status Based on Economic Indicators 

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Andhra Pradesh and Tamil Nadu. Kerala is nowhere in the picture. Throughout the last two decades of the high level of economic growth in India, the contribution of Gujarat has been phenomenal on various accounts. Though it has not resultant in to major decline in number of people who fall in below poverty line in Gujarat. Reflection from poverty figures from the year 2011–12 suggests that Kerala with 7.05 per cent population below poverty line is performing better in comparison to other states and way above to Gujarat (16.63 per cent) (RBI Report 2013). Both Kerala and Gujarat are faring well if one compares it with the national status on poverty of 21.92 per cent. The performance of Kerala is exceptional with respect to reducing or controlling the poverty considering the low GSDP of the state and slow economic growth. Decline in rural disparity in the last decade has been sluggish in Gujarat as compared to Kerala, and also with contemporary economically developed states such as Tamil Nadu, Maharashtra and Andhra Pradesh (Sood 2012). Minimum wages for unskilled workers reflects on Kerala’s supreme performance in the implementation of social welfare measures and protection of labour rights. Figures from the year 2011–12 suggests that Kerala pays minimum wage of `150–510 to unskilled labour, which is highest in the country, on the contrary economically advanced, Gujarat pays only `100–222 (Labour Bureau Report 2013). In rural setting, the minimum wage is lower than the urban centres for both the states. It is evident that economically developed Gujarat has compromised on welfare measures with non-implementation of welfare and social security measures (Parwez 2015). The prevailing low minimum wage in Gujarat is more industry friendly but it requires correction as it does not even up to subsistence level to lead cover basic needs. Labour Bureau Report (2013) states that Gujarat has the least unemployment rate among all states in India (barring Daman and Diu which is a union territory); Kerala’s performance has been sub-standard on unemployment rate which is as high as 82 and 145 for rural and urban centres respectively. One interesting fact is that the unemployment rate in rural Kerala is less than urban Kerala. Data on employment also reveals that Kerala has significantly high number of unemployed population. Kerala has the history of strong labour movement; it is evident with the high level of labour unionization and frequent strikes. Flexible labour law and less unionization in Gujarat have worked as an instrument for exploitation of labour (reduces the production cost) as well as creation of employment opportunities (Parwez 2015). According to the Census (2011), Kerala has the highest tract under urban area, that is, 47.72 per cent in the country while Gujarat has 42.58 per cent of the territory under urban area. It is also an indication of further implication of social development on urbanization and concentration of economic activates. According to Sood (2012), during the last two decades (1993–2010), the growth rate of employment creation in rural areas of Gujarat is on par with Kerala, whereas urban areas of Gujarat created more jobs than Kerala. This phase also witnessed decline in employment for rural Gujarat even though higher economic growth was achieved. The decline in rural employment has Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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been accompanied by reduction in participation of farmers in high value crops cultivation. The overall growth in employment is mainly ensured by growth in services sector, especially in urban spaces. Largely, these new employment opportunities are contractual in nature. Data from Department of Productivity and Promotion (2012) clearly exemplify on the superiority of Gujarat on account of attracting FDI. For the period of 2004–10, Gujarat enjoyed the share of 5.79 per cent; Kerala attracted just 0.4 per cent of the total FDI received. It showcases the level of economic viability for these two states as perceived by the foreign investors.

Women Social Demography Indicators Reducing the regional disparities is one of the major requisites for inclusive development. To understand it further, a cross state assessment of social and economic developmental variables reflects some interesting outcomes. Census (2011) data suggests that Kerala has excelled in demographical status of women with the highest sex ratio of 1,084 females per 1,000 males in the country, closely followed by the southern state Tamil Nadu (995) while Haryana (877) has been ranked at bottom. Gujarat’s performance is considered to be average among all major states in India depicted by low sex ratio of 914, which is encouraging in some way if compared with the past record of the state. Interestingly, one expected that the economic development will lead to the better social development, contrary to the fact that developed states like Gujarat and Maharashtra fare poorly with low sax ratios of 914 and 925 respectively. Rural areas of Kerala have exceptional sex ratio of 1,078, which reflects positively on evolution of Kerala’s development process over the years. These numbers are also reflections of respective state government priorities (Table 2). Education does have an impact on empowerment, which can be observed through the mean age of marriage for female in Kerala. It has been observed that the mean age for marriage in both rural and urban region is more or less the same. Figures on female literacy in the state of Gujarat showcase a sorry picture. Kerala being ranked the best (literacy rate) while Gujarat falls somewhere down the line. It is evident that Gujarat’s economic development has not translated on count of several social indicators. On a positive note, Census (2011) data on women workforce participation shows that rural Gujarat is employing more women then rural Kerala. NSS 64th round reveals a different picture in terms of the overall employment of women in Gujarat (12.7 per cent), reflects on below par performance in comparison to Kerala (39.3 per cent). The overall performance of the states on several indicators for women appreciates Kerala’s approach of development. NFHS (2005–06) reveals that there is a positive correlation between education and married women’s participation in decision-making on family matters. Kerala boasted with 62.5 per cent women participating in decision-making; lower in case of Gujarat (56.7 per cent). In general, cross-states figures on various indicators reflect dismal picture for women.

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Table 2. Comparative Status Based on Women Social Demography Indicators Sl. No.

Kerala

Gujarat

All India

Indicators

Rural

Urban

Rural

Urban

Rural

Urban

1

No. of females per 1,000 males (2011 census)*

1,078

1,091

949

880

949

929

2

Child sex ratio (2011)*

960

958

906

852

919

902

3

Mean age for marriage for female**

22.6

22.8

20.7

22.7

20.7

22.7

4

Female literacy rate (2011)*

92.92

94.99

62.41

82.08

57.93

79.11

5

Women workforce participation rate (2011)***

20.2

16.0

32.0

11.4

30.0

15.4

Sources: ***government of India (2012), *Census (2011) and **National Family Health Survey (2008).

Health Care Status The Constitution of India attributes ‘health’ to be the responsibility of the respective state governments, rather than the central government (National Family Health Survey, 2008). It designates every state to be responsible for ‘raising the level of nutrition, standard of living and the development of public health as among its primary duties’. So far, the Indian states have not achieved the desired results; in other words, the situation is bleak. Census (2011) suggests that yet again Kerala is excelling among all the states in context of life expectancy3 at birth (75.8 years). Despite improvements over the years, Gujarat’s life expectancy at birth is 66.4 years. Kerala’s performance is also exemplary with respect to life expectancy at birth in both rural (74.2) and urban (74.3) areas. Additionally, gender-wise life expectancy of males (71.5 years) and females (76.9 years) have been encouraging. Gujarat’s performance has been below par in terms of life expectancy of rural population considering its economic might; however, it is at par with the national average. Assam has been the worst performer among major states with respect to life expectancy of just 61 years for males and 63.2 years for females. Furthermore, Gujarat with moderate performance in IMR has been ranked 10th in the country. It is evident from Table 3 that Gujarat’s performance against IMR4 (46) is average with IMR of 58 in rural Gujarat, which reflects on poor state of affairs. In contrast, IMR in Kerala is lowest (11) for the year 2011, the highest has been observed in Madhya Pradesh (59) while the national average is 44. The rural–urban IMR gap remains thick, only negligible change has been witnessed between 2000 and 2010 in both Gujarat and Kerala.

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Parwez Table 3. Comparative Status Based on Health Care Indicators Kerala

Sl. No. Indicators

Gujarat

All India

Rural

Urban

Rural

Urban

Rural

Urban

1

Life expectancy at birth (2011)*

74.2

74.3

65.0

70.2

64.9

69.6

2

IMR (per 1,000)**

12

10

58

35

58

36

3

Institutional deliveries in the last three years (%)***

99.3

99.9

48.1

83.7

37.8

70.5

4

Mothers who received postnatal care within two weeks of delivery (%)***

99.3

99.9

52.9

81.1

42.3

72.0

5

Children between 12—23 months fully immunized (%)***

80.3

76.9

51.4

66.8

50.6

63.1

6

Anaemia among pregnant women (%) in 2006 ****

35.8

27.7

61.7

59.1

59.0

54.6

7

Available government hospital bed (2013)**

17,595 20,021 9,925

17,983

196,182 432,526

Sources: ****National Family Health Survey (2008), **CBHI (Central Bureau of Health Intelligence) (2013), *India Census Vital Statistics Division (2012) and *** Census of India (2009).

It has been well documented that Kerala excels in health indicators. Data on ‘institutional deliveries’ and ‘mothers postnatal care’ suggests that Kerala has almost 100 per cent coverage; comparatively Gujarat has very low coverage. Picture is not that different in case of critical health indicators such as ‘children immunization coverage’; Kerala (78 per cent) outperforms Gujarat (52 per cent). It should be noted that within Kerala, immunization coverage in rural areas is better than the urban area. In case of Gujarat, urban areas are relatively more equipped (Government of India, 2008). Table 3 also reveals that anemia among pregnant women prevails throughout Gujarat, though Kerala is performing better than Gujarat; rural areas of both the states are largely suffering. Kerala has been relatively more proactive in providing health care facilities to citizens (Government of Kerala, 2010). It is also evident from the data reported by CBHI (2013) on population served by hospitals; Gujarat and Kerala’s government hospital serves 1,746 and 910 people respectively. Both rural and urban areas in Kerala provide better coverage in terms of government hospitals. Kerala’s performance has been noteworthy as it provides 17,595 beds in government hospitals of rural areas, whereas the coverage by government hospitals in rural Gujarat found wanting with only 9,925 beds in place. There could be several reasons for the poor performance of Gujarat and relatively far better performance of Kerala with respect to inclusive health status. One such significant factor is public expenditure on health care. Kerala’s and Gujarat’s investment in health care was `507 and `320 per capita respectively for the year 2009–10 (CBHI 2013).

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Gujarat’s public health care delivery structure seems to have deteriorated, even though there is a sign of improvement in the last few years. CBHI (2013) reports that there is a prevalence of widespread shortage of doctors at all the levels of health care system. Primary health centres (PHCs) facing the shortage is 34 per cent while the shortage of specialist doctors at community health centres (CHCs) is at the critical stage with 94 per cent. Largely, the health care infrastructure is either not built or is in the decaying state. Basic infrastructure itself is absent in 21 per cent of sub-centres, 19 per cent of PHCs and 11 per cent of CHCs. Tribal areas seem to be the most affected with the lack of personnel and basic infrastructure; more than 70 per cent of X-Ray operators and 63 per cent of pharmacists are not hired. Alongside, there is mass shortage of specialized doctors in these neglected areas. Disarray status of existing health care system in Gujarat is evident and somehow not surprising. With a maternal mortality ratio (MMR5) of 122, Gujarat has outshined the national average of 178, but falls well behind Kerala (66). Gujarat’s performance is also nowhere near to its contemporary economies such as Maharashtra (87) and Tamil Nadu (90). It can be said that Gujarat as a state has ignored the significance of health care; public spending on health is just 3 per cent of the total expenditure of the state. Its contemporary states such as Tamil Nadu spent 4 per cent, Maharashtra 3.5 per cent of the total expenditure, being more proactive. Even relatively backward states like Jharkhand (4.8 per cent) and Rajasthan (4.5 per cent) are spending more on health care (India Census Vital Statistics Division 2012).

Educational Performance Educational indicators suggest that the progress of Gujarat with respect to the literacy rate is lethargic; Kerala excels in providing education (particularly high literacy rate) to its people. Historical indicators show that Kerala has always performed on educational indicators and Gujarat has lagged behind (State Domestic Products of India, 1960). However, Gujarat has shown sign of improvement in the last decade. As per Census (2011), Kerala has been ranked as number one state in the country with literacy rate of 96 per cent while Gujarat has also shown some significant improvement with 87.2 per cent (table 4), performing better than the average national literacy rate. The existing literature shows that discussion on education is largely based on data drawn from the NSSO’s 64th round (2009–10). Data suggests that Kerala is a welfare-oriented state and Gujarat is keen on economic growth and encouragement to private entity. But ‘school management by government’ showcases interesting picture, only 40 per cent of schools are management by the state government in Kerala (rural and urban); but government agencies in Gujarat manages 50 per cent of urban schools and more than 91 per cent of schools in the rural area (NSSO 64th round). It suggests that Gujarat is working towards enhancing its reputation as a welfare state. It is also visible in case of student’s transition rate from primary to upper primary in Gujarat, which is at par with Kerala. Indicators such as average number of instructional days and dropouts Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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Parwez Table 4. Comparative Status Based on Educational Status Indicators Sl. No.

Kerala

Gujarat

All India

Indicators

Rural

Urban

Rural

Urban

Rural Urban

1

Literacy rate (2011 census)*

92.9

98.1

73.0

87.6

67.8

84.1

2

Proportion of children currently attending school (aged 6–14 years)*

98.5

99.7

79.9

88.2

88.2

92.3

3

Schools by government management (2007–08)**

40.83

40.91

91.53

49.28

85.52

46.22

4

Average expenditure 3,234 per student till 12th level**

1,295

5,110

1,551 5,128

4,913

Sources: *Census (2011) and **Education in India: 2007–2008: Participation and Expenditure— NSSO 64th Round.

(Grade I–V) also reveal improved performance of Gujarat. Usually, an expected gloomy depiction of educational status of Gujarat is expected. On the contrary, in case of school dropouts (Grade I–V), Gujarat showcases a brighter picture with only 2.2 per cent against the 5.8 per cent of Kerala (Census, 2011). Teacher–pupil ratio in Gujarat depicts not so brighter picture, particularly in senior classes—at intermediate levels there are 52 students for every teacher compared to the national average of 34 students per teacher. In case of higher education, the provisional report (2011–12) of All India Survey of Higher Education (AISHE) (Ministry of Human Resource Development 2013) reveals that Gujarat appears to be sluggish with Gross Enrollment Ratio (GER)6 of 17.6, and it is significantly lower than the national average of 20.4 and substantially below Kerala (23.1). Other developed states such as like Tamil Nadu (38.2) and Maharashtra (27.4) have performed exceptionally. As mentioned earlier in case of health status, same is true for the educational environment in Gujarat. Possibly, the dismal performance of Gujarat in the education sector is largely attributed to low public expenditure. Spending on education in Gujarat is neglected to the extent of miniscule amount of `1,295 per capita against the `3,234 per capita of Kerala (NSSO 64th round). Since 2001, Government of Gujarat has only spent 13.2 per cent of the total public expenditure on education compared to the national average of 14.8 per cent (table 4). Comparable states such as Maharashtra (18 per cent) and Tamil Nadu (14 per cent) have invested more and are performing better. Based on various educational indicators, it is evident that Kerala is faring much better than Gujarat and others states in the country. Some recent initiatives of Government of Gujarat substantiate the fact that the state is striving towards improvement in the overall educational environment.

Discussion The prevailing interstate and rural–urban disparity in India even after several decades of planning-based development efforts is distressing. The introduction of centralized Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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planning after independence was supposed to help in achieving the objective of inclusive development. Our analysis uncovered important aspects of regional and socioeconomic disparity by comparing two very different and important states. Since the introduction of economic reforms, the states in India are making concerted efforts to improve the socio-economic environment. States like Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Rajasthan and Madhya Pradesh have recorded higher economic growth rates post economic reforms. States such as Assam, Odisha, Uttar Pradesh, Bihar and West Bengal have witnessed sluggish rate of growth in pre-economic/post-economic reform period. During the pre-liberalization period, states such as Punjab, Rajasthan, Haryana, Delhi, Tamil Nadu, Andhra Pradesh, Orissa, Madhya Pradesh and Karnataka used to be the catalyst of economy and employment creation (Dev 2008). While states like Uttar Pradesh, Kerala, Assam, Bihar, Gujarat, Maharashtra and West Bengal reported lower growth rates. Principally, states such as Tamil Nadu, Andhra Pradesh, Punjab, Haryana, Rajasthan and Karnataka showcased significantly improved performance with respect to growth in employment and productivity before and after economic reforms; working as catalyst of economic development (Bhanumurthy and Mitra 2004). Southern states like Kerala, Andhra Pradesh, Tamil Nadu and Karnataka along with western states such as Maharashtra and Gujarat are experiencing higher distribution of wealth and other amenities (Kurian 2000). Among the cluster of southern and western states, Kerala is considered to be economically underdeveloped but it excels in social indicators while Gujarat being an economically developed state, has been lackluster in that regard. There is visible prevalence of rural–urban divide in Gujarat. These disparities are in particular evident in case of non-availability of public health resources in rural areas, also attributed to income differentiation-led utilization by local population, as wealthy people are consuming most of the existing health care facilities. Nevertheless, attaining equity for the citizens is a major goal for states and hence considerable space for improvement remains. Kerala has shown the way towards inclusive development through planning, focusing heavily on public investment. It is evident that rural–urban inequality is comparatively lower in Kerala. Over the years, Kerala has experienced a rural– urban continuum rather than a divide. Political awareness and peoples’ participation has promoted further understanding and implementation of socio-economic measures. The fact remains that initiatives taken by the state governments, regardless of the importance they are given, may not be able to take care of the issue unless complemented by policies at the national level. It is evident that the condition in rural India is critical, in need of result-oriented long-term development policies. Furthermore, urban advancement in an economy like India cannot be ignored and private investments should be encouraged to create more jobs. The focus has to be on the balanced development of both rural and urban areas otherwise rural to urban migration will become unmanageable. The government needs to implement a long-term course of action, noting the necessities of the rural and urban regions. Rural areas possessed with numerous resources remain unutilized due to lethargic approach of the state and lack of public investments. It is high time that states need to recognize and identify them. Downloaded from irm.sagepub.com at IIHMR University on December 3, 2016

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Concluding Observation This article examines the economic and social development by comparing two very different and significant states of India in terms of their growth stories. It, therefore, explores different approaches pursued by them towards socio-economic progress. The theory suggests that economic development generally leads to social development, which is proven to be incorrect in case of Gujarat. Kerala has however shown that the implementation of social policies promotes human development and widespread socio-economic security. Despite various interventions at the state level in Gujarat, there is a lot left to be desired on the social and human development front. Gujarat’s economic model provides an opportunity to understand the limits of market-led growth and an insight into a policy regime that does not adequately mitigate existing inequalities. Kerala simultaneously needs to concentrate on revenue generation through investments in industry and service sectors for its redistributive efforts towards welfare of its citizens to continue.

Acknowledgements I am grateful to Professor Mukul Kumar and reviewer of the journal for their extremely useful suggestions and help for enhancing the standard of this article. It has been prepared in good faith on the basis of information available at the date of publication.

Notes 1. Externalities are a loss or gain in the welfare of one resulting from the activity of another. 2. Gujarat and Kerala has been ranked 4th and 11th respectively among 33 Indian states and union territories in GDP growth rate. Gujarat and Kerala contributes 7.31 per cent and 3.78 per cent respectively of total India’s GDP. Maharashtra leads the pack and contributes 14.42 per cent, followed by India’s most populated State Uttar Pradesh with a share of 8.24 per cent. Tamil Nadu (8.16 per cent) is at 3rd, and West Bengal (6.75 per cent) is at 5th position for the year 2013–14. 3. Life expectancy is a statistical measure of how long a person may live, based on the years of their birth, their current age and other demographic factors including gender. 4. The  IMR is the number of deaths of infants under one year old per 1,000 live births. 5. MMR is the number of women dying from child birth-related causes per 10,000 live births. 6. GER is the proportion of 18- to 23-year-olds studying in higher education to their total population.

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