Sometime ago, a Gujarati government official said what else they need to say about the future prospects of the state as an auto-hub for it was already home to the world's cheapest car, the Tata Nano. The observation is spot on. Setting up a Tata Nano plant at Sanand after the Tatas decided to pull out from Singur in West Bengal in 2008 was a great industrial strategic move made by the Narendra Modi government. It simply capitalised on an opportunity which was squandered by Bengal, a state starved of industrialisation and woefully lagging behind in terms of economy.
The Nano episode clearly drew the line between the willing and the unwilling. But why is it so? Bengal was once a frontline state in the country in terms of agriculture and industry but went on the decline ever since. Gujarat on the other hand, just moved in the opposite direction.
History and geography favours Gujarat more
There are historical, geographical and of course, man-made reasons for the two contrasting tales. Gujarat has always been an economically progressive state. Gujaratis were known to be a prosperous trading community. Surat was known for its prosperous maritime trade. Proximity to Mumbai and Delhi, the country's political and commercial capitals, hosting oil and gas pipelines, reliable power supply, closeness to ports, development of a cooperative dairy farming movement, remittances from Gujarati NRIs, high agricultural growth are some of the factors that have helped the state's financial fortunes.
Bengal, on the other hand, was a flourishing state during the days of the Nawabs but ever since the British defeated Nawab Siraj-ud-Daulah and the subsequent plunders of the state exchequer started, the misery took off. Geographically too, Bengal had suffered following the partition of 1947. Some of its key industrial belts were alienated and refugee problems created immense pressure on the Indian part of the province. Also, the location of the state in the comparatively backward eastern region of the country created more challenges for the state.
But the real reason is...
But this serves no explanation to the striking difference. The biggest drawback for Bengal and at the same time, the biggest strength for Gujarat, has been the positive role played by both the pro-active leadership and the pragmatic masses. Gujarat have had a leadership which always stood for the state's progress and Modi has served a perfect successor to the culture. No compromise is ever made by the political rivals when it comes to the issue of development, an apt example being the Narmada Project.
N Vittal, the renowned Indian administrative officer who had served in Gujarat in various government capacities, reflected on this. "It is not merely the enterprising spirit of the people that is at the root of the vibrancy of Gujarat. The government and political leaders have the same spirit. For example, the Alang shipyard in Bhavnagar owes its existence to one minister, Sanat Mehta. A labour leader, Mehta, took the initiative almost single-handedly to develop this new industry. There may be criticism about the environmental conditions under which the workers operate there, but an industry of global nature could develop thanks to the initiative, vision and the enterprising spirit of one minister," he said.
Gujarat's pragmatism that it is ultimately the people who matters in economic ventures and the subsequent prioritisation of the joint sectors instead of the generally-preferred state ownership paid off. The single window concept was introduced first in Gujarat and the regular meetings between the bureaucrats and the political leadership have helped in quick decision-making and more transparency in procedural issues.
Vittal also said how Gujarat showed the way in canvassing for investment from Gujaratis residing abroad since the 1970s. The women are also an enthusiastic pro-industrial section of the state and not to forget the vigorously active NGOs. Gujarat has succeeded in utilising the market forces, the key determinants of economic well-being in an age of globalisation.
Narendra Modi, more like a CEO than a CM, has built up on the prevailing advantage by prioritising infrastructure. He has made the system of governance accountable, encouraged transparency and fast tasking. It is said that Modi jumped on to grab the opportunity after the Tatas left Singur and the first Nano car rolled out from the Sanand factory in just 14 months. A joint venture between Bharat Forge and France's Alstom for power equipment has also shifted to Mundra from West Bengal. In the case with Nano, the Tatas wanted local skilled manpower for the factory which the Gujarat government had also guaranteed of providing.
The Bombardier Transportation factory near Vadodara was another of the several success stories of the government. The biennial Vibrant Gujarat summits play a key role behind the go-about of the new industrial ventures in the state. Even small-scale industries have prospered while the power sector has seen a remarkable turnaround. The administration methodically deals with the investment proposals and follow up with them regularly. A striking fact of the Gujarat experience is that even some of the CM's staunch critics have set up their units in the state to get a taste of the success.