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New
Delhi, 14 June 2005
Guru
is back with a hard hitting, facts supported
indictment of the performance of the Gujarat State.
In the bargain he lucidly explains the concept of
'Economic Freedom', which has been somewhat loosely
used by the Gujarat government to explain its claim
to be "the best governed state".
The
Narendra Modi government in Gujarat has been going
to town claiming to be the “best governed state”
on the basis of a supposed accolade by the Rajiv
Gandhi Foundation, incidentally headed by Sonia
Gandhi. If this were so it would be the Congress
Party’s self-goal equivalent of the BJP,
discovering MA Jinnah to be secular. But it is not
so for the RGF did not certify that Gujarat is the
best-governed state in India, just as Advani did not
certify that Jinnah was secular. But we are dealing
with the perceptions created and the Modi government
is just trying to take advantage of getting rated
best for something called “Economic Freedom”.
But what is Economic Freedom?
The
notion of Economic Freedom traces its origins to a
series of seminars between 1986–94 sponsored by
the Fraser Institute of Canada and hosted by Milton
and Rose Friedman. Milton Friedman is a Nobel Prize
winner in Economics and his brand of economics
stands at the most rightward fringe of the spectrum.
His policy preferences have been criticized by a
galaxy of economists including John Galbraith and
Amartya Sen as insensitive to people and sensitive
only to profit. The economics espoused by Milton
Friedman is also known as the Chicago School and its
most sincere adherent was the regime of Augusto
Pinochet in Chile. Other
prominent proponents of Economic Freedom are two of
the most conservative US think-tank’s, the
Heritage Foundation and the Cato Institute. It
is therefore somewhat ironical that this extremely
rightwing notion is being advocated in India by the
Rajiv Gandhi Institute of Contemporary Studies (RGICS)
of the Rajiv Gandhi Foundation. One must wonder what
the UPA’s National Advisory Council has to say
about Economic Freedom?
While
Economic Freedom is packaged as a new idea with the
Wall Street Journal happily celebrating just its
eleventh anniversary, it is in fact mostly a rehash
of all that went with the Cold War ideology of free
enterprise and free markets. Whatever it is, it is
not an economics term that finds recognition in my
copy of the MIT Dictionary of Economics. What it
actually is, is nothing but a brand of politics
promoting an ideological lifestyle favored by
ultra-rightists. The Fraser Institute itself best
describes it as follows: “Economic
Freedom is the extent to which one can pursue
economic activity without interference from
government. Economic Freedom is built upon personal
choice, voluntary exchange, the right to keep what
you earn, and the security of your property
rights.” Simply stated this just means that good
governments are those which let rich do what they
want, take all they want, and keep all they want,
and the people be damned. In short the market will
take care of everything. This is as dumb an ideology
as that where the state is everything and takes care
of all.
The
annual Economic Freedom of the World Report
published by the Fraser Institute in conjunction
with members of the Economic Freedom Network, ranks
countries on their level of economic freedom.
Incidentally the RGICS is not a part of this
network, which then begs the question as to why it
got involved with something so dumb as appearing to
endorse the Narendra Modi government?
Last
year’s rankings had India ranked 68 along with
Bahamas, Belize, Ghana, Tanzania and Tunisia and way
below countries with few real freedoms like UAE
(16), Kuwait (18), Oman (18), El Salvador (27),
Panama (27) and Jordan (36). Thus it seems that
while Economic Freedom is a composite index of
individual liberty, limited government and free
markets, the weight accorded to individual freedoms
is at best marginal. On a scale of 10 even the top ranking Hong Kong got 8.7,
while the USA got 8.2. Apparently the standards
demanded by the makers of Economic Freedom are much
too high even for these holy centers of capitalism?
The Heritage Foundation in conjunction with the Wall
Street Journal seem to have a somewhat different
scale but it comes to about the same conclusions.
Thus while their index considers Saudi Arabia to be
mostly free, it considers India to be mostly unfree,
like China!
Now
lets get back to the Narendra Modi government, which
is claiming via full-page advertisements that it is
the best-governed state in India. That’s not even
close to the truth for that is not what the RGICS
study is about either. “Economic Freedom” is not
about good government. It is not even about economic
achievements. It is about the least government and
looking most business friendly. It is as if a
policeman is to be judged by how crisp and clean his
uniform is and not by his professional achievements.
Gujarat’s
achievements in economic and social development
during the last decade do not support its
advertisement of itself as the best governed state.
In terms of economic growth at constant prices in
the decade after 1993–94, Gujarat averaged a
growth of 6.72% which ranks it well below first
placed West Bengal’s 8.55% and Karnataka’s
7.29%. In fact Gujarat’s performance is 0.15%
below the national average and just 0.10% more than
Bihar’s. The last one would probably be the
unkindest cut of all for we know economic growth in
Bihar is almost entirely unassisted by the state
governments exertions or the central governments
benevolence.
In
reduction of poverty, Gujarat has achieved a decline
of 65.87% since 1977, which while commendable only
places it sixth, well below Goa, Kerala, HP, Haryana
and Punjab. Even now after so much of good
government particularly under Keshubhai Patel,
Sureshbhai Mehta and Narendrabhai Modi, Gujarat
still has 14.07% living below the poverty line
placing it only fourth from the top! While Gujarat
has the highest per capita spending on Roads and
Irrigation, it ranks only sixth in per capita
spending on Health and Education.
The
consequences of these can be seen in the human
development indices. In terms of reduction of Infant
Mortality Rate (IMR), Gujarat has achieved a
reduction of 17.94%, which is eleventh in terms of
rank leaving it with an IMR of 64 which places it
seventh. Gujarat doesn’t do too well in terms of
life expectancy with the average longevity being
62.15 years which puts it at eighth place below even
Bihar’s 62.85 years. Again in terms of sex ratio,
Gujarat is running neck to neck with Bihar with 921
females to every 1000 males. In terms of literacy
Gujarat once again is not among the top with 69.97%,
which ranks it sixth. When it comes to overall
population growth, Gujarat with an annual growth of
2.42% is once again sixth in the ranking. Even in
terms of population between ages of 5–14 enrolled
in schools, Gujarat with 74.35% stands at sixth
place.
The
RGICS study of Economic Freedom apparently includes
“efficient and effective legal system ensuring
complete investigation” as a measure. Presumably
they did not to consider the Justice Bannerjee
Report on the Godhra incident or the Justice SC
Jain’s Central Pota Review Committee order
excluding the 130 persons from Pota for the same
alleged offence. The thousands killed in the rioting
and the about turns seen in the Best Bakery case are
additional testimony to the effectiveness and
efficiency of the legal system in Gujarat, just as
they are to the “highest level of safety of life
and property and lowest incidences of violent crimes
in the country” claimed by the Gujarat government.
Here one is hard pressed to contest Gujarat’s
contention of having the least government.
There
is another perspective on this we could also
consider. In terms of value of property stolen
during 2003, Gujarat reported Rs. 32,419 lakhs as
stolen placing it just below Maharashtra. In terms
of property recovery Gujarat had only 9.5% whereas
top ranked Haryana managed 68.3%. Then there is
another interesting statistic about Gujarat that is
quite telling. In 2003 Gujarat reported 1044 cases
of kidnapping, which is about half of the numbers
reported from the traditional kidnapping states like
Bihar, UP and Rajasthan, but well above MP,
Maharashtra, Tamil Nadu and Karnataka. But what
makes Gujarat truly unique is that almost 90% of
those kidnapped were below 30 years and nearly 80%
kidnapped were women. This is almost twice the
national average. So much for “the highest level
of safety of life and property” claimed in
Gujarat. The National Crime Records Bureau also
reports that Gujarat was no slouch when it came to
violent crime with 13.1% putting it ahead even of
UP, West Bengal and Punjab, and in terms of IPC
crime rate Gujarat with 197.0 was above the national
average of 160.7.
There
are some other measures we can consider. In terms of
net industrial value added, Gujarat ranks third
below Maharashtra and Tamil Nadu. It has performed
poorly in terms of growth of electricity generation
since 1993–94 with a growth of only 18.69%, when
the national growth was 43.75%. As a matter of fact
among the bigger states it stands only ahead of
Bihar. Quite clearly there is more to good
governance than just Economic Freedom. Gujarat has
not done too badly but to claim that it is the
“best governed state” in India based on some
dubious index is to be somewhat economical with the
truth.
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