Is Narendra Modi's Gujarat Miracle a Myth?

Investigating the hype surrounding the man who could be India's next prime minister
A supporter of India's Bharatiya Janata Party holds up a mask of the party's prime ministerial candidate, Narendra Modi. (Anindito Mukherjee/Reuters)

Narendra Modi’s candidacy for Indian prime minister largely rests on claims of turning around his state of Gujarat. As national elections begin on Monday, a Gallup poll finds that more than one-third of Indians feel their economy is getting worse.

If elected, can Modi turn that perception around too?

We have examined Gujarat entirely through the lens of available public data, much of which is graphed below. While governance is a chief platform of the Modi campaign, and the state he oversaw is held up as a shining example of how India can and should grow, Gujarat’s overall numbers actually show a mixed picture.

Since Modi took over in October of 2001, Gujarat’s economy has vastly improved by some measures and continued to do as well as it did before he took office by others. But in non-fiscal indicators such as health and overall quality of life, Gujarat has sometimes slipped under Modi. In a few measures, Gujarat has done worse than it did before Modi took control.

(A note: Unless otherwise indicated, the years below refer to the Indian fiscal year that starts on April 1. So 2000, for example, actually refers to the 2000-2001 Indian fiscal year.)

The Economy

1. Absolute GSP

To get a sense of how Gujarat’s economy has grown compared with other states, let’s look first at gross state product. Absolute GSP varies from state to state dramatically, because of overall size, population, and historical levels of industry. Gujarat has long been mid-pack. Here, as in many instances below, we've charted Gujarat’s statistics since before Modi took office and compared them with the progress of the best Indian state or union territory and the worst over time.


Overall, Gujarat’s gross state domestic product grew at an average of 16.6 percent a year from 2001 to 2010, up from an annual average of 5.1 percent from 1980 to 1990 and 8.2 percent from 1991 to 1998, according to the Planning Commission. In the 1991 to 1998 period (before Modi took office) Gujarat was the fastest-growing of India’s 14 major states based on gross state product. From 2001 to 2010, Gujarat’s annual average state domestic product growth was bested by Uttarakhand (18 percent), a state created in 2000, and Sikkim (19.2 percent), which was not counted as a “major state” in the 1991 to 1998 figures.

Gujarat’s All-India ranking, based on overall gross state product: 2011/12: 5th; 1999/2000: 6th

2. GSP per capita

By another measure, gross state product per capita, all of India has again grown significantly in recent years. Here, Gujarat’s domestic product has grown faster than the overall average, but again remains far from the lead, behind Goa, Maharashtra, Tamil Nadu, and others. We've graphed Gujarat’s per capita domestic product versus India’s highest and lowest states or union territories below, and the All-India average, based on current prices, in rupees:


Gujarat’s All-India ranking, based on per capita state domestic product: 2011-12: 8th, up from 12th in the 2000-2001 fiscal year.

3. Unemployment rate

Gujarat’s unemployment rate is low, a position the state has held since the 1990s, according to the latest unemployment survey for the 2012-2013 fiscal year, but behind several other fast-growth states:


Gujarat’s All-India ranking for unemployment, where 1 is the lowest: 2012, 4th based on data from the Labor Bureau, which only dates back to 2009. Based on “National Sample Survey data,” Gujarat’s rural unemployment ranking in 2011 was 2nd, tied with Madhya Pradesh, versus 5th in 1999. Ranked on urban unemployment, Gujarat was 1st in 2011 and 1st in 1999.

4. Foreign direct investment

During his tenure as chief minister of Gujarat, Modi has made this one of his top priorities, a push that’s been accompanied by high-profile investment summits and the construction of new factories by Bombardier and other foreign manufacturers. Gujarat, Modi likes to say, has become the “global Gateway to India.”

On FDI inflows, though, Gujarat remains dwarfed by other states that have been the traditional “gateway” to the country, according to a Reserve Bank of India report that dates from the year before Modi took office. The RBI ranked its own offices in the cities that made the reports, not the states they are in, so “Mumbai” here can be considered a proxy for Maharashtra, Chennai for Tamil Nadu, and Ahmedabad for Gujarat.


In recent years, drawing foreign direct investment to Gujarat has had mixed results, according to the most recent data available (the years below refer to the Indian fiscal year):


Gujarat’s All-India ranking, based on FDI: 5th, from April 2000 to December 2013.

5. Income inequality, rural and urban

Inequality in India’s rural areas has risen in the past decade, after dropping through most of the 1990s, when judged by the GINI coefficient, a measure of inequality in which a score of “zero” means perfect equality and “one” means one person owns everything. Gujarat saw a sharper rise than the rest of India from 1999 through 2004, and then improvement, and remains mid-pack here. Uttar Pradesh has by far the worst income inequality in rural India, while Rajasthan’s rural inequality levels fell sharply after 1991 and remain below that level.


On an urban basis, Gujarat’s income inequality is growing as well, but less sharply than in some other fast-growth states.


On an All-India basis, Gujarat ranked 15th based on urban inequality, where 1 represents the highest inequality in the 2009-2010 fiscal year, the latest available. On the basis of rural inequality, Gujarat was 20th. Complete GINI coefficient data for all Indian states is not available for the 1999-2000 period, so comparing Gujarat’s inequality versus other states during that time period to the present is not meaningful.

Quality of Life

1. Human Development Index

The human development index is calculated based on life expectancy, income, and education, and is used by the United Nations to judge quality of life (and was co-created by Nobel Prize-winning economist Amartya Sen in 1990).

Presented by

Heather Timmons and Arshiya Khullar

Heather Timmons and Arshiya Khullar are contributors to Quartz.

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