Posted by: commoditywise | December 24, 2007

Vibrant Gujarat may now fuel India’s growth too

N

arendra Modi, soon-to-be-sworn-in Chief Minister of Gujarat has finally proved that the way ahead for India is only Economic Growth, and not squabbles based on religion and petty politics. If India wants to shine out in the global arena Narendra Modi’s leadership has proved that it pays to focus on people-oriented industries like agriculture, oil & gas, textiles among others commodity sectors for overall economic growth. 

Vibrant Gujarat was Narendra Modi’s famous annual week-long jamboree that he had for the past five years used to show case business and investment opportunities in the state that attracted vast amounts of monies from within and overseas business investors. During these years, he let his policies speak for themselves. And after five years, fighting against all odds, and barrage of severe criticisms from all possible quarters, Narendra Modi, the indomitable fiery spirit of Bhartiya Janta Party (BJP) has proved all doomsayers wrong.  

Both the electronic and the print media, sold to the Congress view against Modi, are left nursing their own wounds along with the party that they had supported so aggressively on pitting religious sentiments against Modi. Economic Growth with Safety and Protection was possibly the subtle message that the thumping victory Narendra Modi gave to the electorate of his state. 

Recently, came across, this interesting viewpoint from one of India’s leading financial portal – rediff.com – http://ia.rediff.com/money/2007/nov/26guj.htm 

Who rides the bull? Well, nobody really knows. But one thing is for sure, without Gujaratis there is no bull run. And you can trust Gujaratis to revive, revitalise, rejuvenate or make financial markets fall like nine pins.  

Gujarat contributes over 21 per cent in exports and 13 per cent of India’s industrial production. Gujarat is now at top of the 15 States’ Economic Growth league tables. The latest figures show that Gujarat has recorded a huge 10.6 per cent growth during the 10th Plan period, while Punjab with its woeful 5.9 per cent growth has slumped to the lowest rung where it joins Jammu & Kashmir with the same percentage of growth.  

Commodity business is largely people-oriented business and economic growth in India therefore, revolves around mastering people-oriented commodity business only. In Gujarat, at least five commodity sectors are thriving in the Gujarat state – agriculture (cotton, edible oils), oil & gas, gems & jewelry and textiles. That the state government is hugely supportive of boosting tourism is also interesting. Across India, agriculture continues to be the largest private sector business in India, though dependent more on politics and government policies. Being a State subject, India’s agriculture seems to be falling between the two stools – Center and the States and which of the two will best support Indian agriculture. India’s growth prospects therefore, like witnessed in Gujarat, call for goal-and-result-oriented policies that elevate people to support your views, for if people are elevated, strengthened they in turn will support the overall policies and elevate their leader. 

While agriculture tops the list of profile of the Gujarat State, energy tops the list of investment opportunities. The state’s official websites – http://www.gujaratindia.com/ and http://www.indextb.com/  highlight various important and attractive sectors like infrastructure, industries and mining. 

A small comparison between Gujarat and Punjab will be important here. Gujarat during the last five years has literally blossomed under the Narendra Modi’s leadership – which was viewed as highly questionable, esp after the 2002 riots that followed the unmindful train blast in Godhra that killed over 300 travelers. Modi’s latest victory has swept aside all allegations to his leadership only because his leadership has helped Gujarat State propel to the top of the states’ economic growth league tables. Punjab on the other hand, too largely was agro based. Till few years ago, Punjab was known to be a leader in cotton and wheat. But the farmers there were literally spoilt doubly, one with the suffusing financial support from the central government for growing wheat, two, from the MNCs like PepsiCo and others that gave good rewards to the farmers for their corporate farming. So, like the land there spoilt by overdoses of fertilizers, the farmers of Punjab and its leadership too was possibly spoilt. That there were other state-specific problems is a different story. 

Punjab turns laggard in economic Growth, shouts a graphic description of the 15 State Economic Growth League table on page 1 of Business section of Hindustan Times (December 24, 2007), while the first half page of the same (today’s) Hindustan Times, there is this story of the unexpected victory of Narendra Modi followed who is happy and vibrant with the outcome of the poll results. The caption of the story and picture on page 1both says “Unstoppable … Is Modi’s next stop Delhi?’ 

Sign of things currently, are also the signs of shape of things to come…  

Economic Growth is the result of leadership, more so in times of adversity, and Narendra Modi’s leadership has proved what Leadership is all about. And at the core are the state’s agro sector and its business community that have collectively contributed to the state’s economic fete against all odds and criticisms.   

Highlights of Gujarat

  • State Domestic Product (SDP) rising at an average growth rate of 12.4% per annum in real terms (from 1994-2002)
  • Leader in various industrial sectors, Chemicals, Petrochemicals, Drugs & Pharmaceuticals, Dairy, Cement & Ceramics, Textiles, Engineering and Gems & Jewellery
  • Largest grass-root Petroleum Refinery in the world operational at Jamnagar
  • Three LNG terminals to come up; Gas grid system in operation
  • One of the first few states to have encouraged private sector investment in the infrastructure; Excellent road network – exceeding 74,000 kms
  • Gujarat accounts for almost 21% share in the export basket of India
  • Longest coastline of 1600 kms, dotted with 41 ports, 1 major, 11 intermediate and 29 minor ports
  • Country’s first private sector ports – Pipavav and Mundra – already in operation. In addition, the liquid cargo (chemicals) handling port at Dahej is also set up in joint sector and made operational
  • Highest number of Airports in India – 11 including an international airport in Ahmedabad

 Here I would quote once again what the rediff.com article (mentioned above) says:

‘So who should control commodity market if it needs exponential growth? Not a Gujarati at the helm of affairs but more of a Gujarati culture of doing business. Move out of political compulsions and let simple laws of economics take its own course. Understand the relationship between demand and supply. Only the Gujarati way of doing business will tell you that this relationship underlines the forces behind the allocation of resources’.

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