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Kerala-Gujarat Models: a Comparative Study with Respect to Socio-Economic Environment

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Kerala-Gujarat Models: a Comparative Study with Respect to Socio-Economic Environment Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-7, 2016 ISSN: 2454-1362, http://www.onlinejournal.in Kerala-Gujarat Models: A Comparative Study With Respect To Socio-Economic Environment Muhammed Salim. A.P Assistant Professor of Economics M.E.S. Mampad College (Autonomous), Malappuram Dist., Kerala, India Abstract: Kerala-Gujarat Models of development mixed. Thompson (2010) observes that a common were lauded and animadverted on approach to economic development used by state accomplishments and impairments in varying and local governments across the country and in sectors. This study exhumes the distinction of New England is to provide a variety of financial Gujarat Model in economic sectors shown by high incentives and subsidies with the goal of increasing per capita income, better and constant share of employment and investment. This development agriculture and industry, and giant and diversified approach in US involves both social and economic energy sector. Kerala’s peerless and enviable considerations. Lynch (2004) argues that by outcomes in health and education have really made stimulating growth, generating jobs, and providing the Kerala Model distinguished all over the world. direct benefits to residents, improvements in state While Gujarat Model is weak on education-health and local public services can be one of the most standards even though improving, Kerala Model effective strategies to advance the quality of life of made the globally comparable outcomes in it at the citizens. This approach as stated by Lynch is to backing of poor economic standards. At that, enhance the production sectors and conserve the Kerala which is blessed with top standard social interests of the commons in tandem in US. Since indicators trails by high crime rate against women most countries have embraced democracy in more and children and suicide rate. Biggest paradox in or less manner, all such governments should have these models of development is highest mitigate the issues of the commons while striving unemployment rate in Kerala with lowest poverty for economic growth. ratio and lowest unemployment rate in Gujarat with higher poverty ratio. Even though these two 1.2 Sen-Bhagwathi debate: Amartya Sen, Nobel transverse models lead or trail in transverse Laureate in Economics and renowned economist indicators of development, lead the national and Jean Dreze, Sen’s co-author in his major works average mostly. are the magnates who admired and supported Kerala Model of Development. While, Jagdish Key words: Gujarat Model, Kerala Model, Bhagwati, Indian-born American economist and economic sectors, social sectors Professor at Columbian University and Aravind Panagariya, Bhagwathi’s colleague in Columbian 1. Introduction University and present Vice Chairman of NITI Ayog are the principal economists who preferred The famed Kerala Model and Gujarat Gujarat Model of Development. None of them Model are the two different development models refuses achievements made by both models of which are being acquired some acclamations and development. But the debate is over how subjected to some criticisms. Both the models are development can be appropriated and what entirely dissimilar in terms of approach to approach to be followed by the whole nation. Sen development. Kerala Model focused on marching believes that investment in capability enhancing to economic development through desirable social sectors clearly stating social infrastructure will changes while Gujarat Model tries to bag desirable surely bring economic development. Bhagwathi social changes through sound economic anchor. thinks that this model of development is not Both models have many accomplishments and sustainable as it has no resource base. Thus the impairments. The discussions are on which model capability approach visualized by Sen is absolutely of development that India should follow. As far as rejected by Bhagwathi. He argues that a national economy is concerned, it is important to achievements in social infrastructure can be derive and prioritize the good aspects of the two possible only at the support of economic models. infrastructure and growth. At the same time rejecting Bhagwathi’s view Sen noted that without 1.1 Integration of global approaches to the investment in social infrastructure inequality development: The approaches to development will widen and the growth process itself will falter. being followed across the world is more or less At that, Bhagwati argues that growth may raise Imperial Journal of Interdisciplinary Research (IJIR) Page 396 Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-7, 2016 ISSN: 2454-1362, http://www.onlinejournal.in inequality initially but sustained growth will Development in both social and economic sectors eventually raise enough resources for the state to is required for the comprehensive development of redistribute and mitigate the effects of the initial the country. The development model without inequality. improvements in any of the sectors will be amateurish. 1.2.1. On Kerala Model & Gujarat Model: Bhagwathi and Panagariya (2012) argued that 4.1 Economic Sector Development achievements of so called Kerala Model was due to the growth oriented approach. They argued that Although Sen believed this would be the there is a clearly identifiable Kerala Model to outcome of capability, economists like Bhagwathi which Kerala’s superior education and health argued that this is the rock-bottom of social sector outcomes can be attributed is absent. Thus they development. The investments and incentives in note that Kerala Model has yielded superior economic sectors like industries and agriculture are outcomes at the blessing of reforms. At that Sen required for the development in economic sectors. (2013) argues that many successful examples can Trends, features and issues in the indicators such as be taken from Kerala Model. He blames Gujarat Net State Domestic Product (NSDP) and NSDP per Model on the ground of poor social infrastructure- capita, and sectors such as agriculture, industry, backward education and health standards and urbanization and infrastructure are brought under adverse roads. Supporting the Kerala Model, Sen this section. (2013) states that when Kerala went that way, it 4.1.1 State income of Kerala & Gujarat was one of the poorer states in India, but the basic policy of human capability formation through Gujarat state economy in terms of NSDP public efforts facilitated economic growth in at current price is been much larger than Kerala Kerala, and so eventually it became one of the economy for decades with about one time high. richer Indian States. Bhagwathi (2013) stated in The Gujarat economy which was lower than major interview with the Economic times ‘Kerala simply state economies such as Madhya Pradesh, Bihar, started at very high levels of social indicators than West Bengal and Andhra Pradesh in 1980s and the rest of the country and it has maintained that early 1990s and was at 7th or 8th rank among Indian lead. In 1951, literacy rate was 47% in Kerala states have been resurrected in 2000s outrunning compared with just 18% in India and 22% in the above state economies and became 4th largest Gujarat.’ economy in India ever since 2005-06 (Table 1). While the Kerala economy which was at 10th rank 2. Objectives in 1980-81 was not able improve its standing. 1) To unearth the features and issues of the states Moreover the rank gap between Kerala and Gujarat of Kerala and Gujarat in its socio-economic sectors economies has also been widened in favour of Gujarat. Thus it is clear from the table 1 that 2) To compare and contrast Kerala and Gujarat Gujarat has been transformed to be a major Models of development economic power in India in early 2000s and it is able to sustain its standing at 4th major state 3. Research Methods economy since 2005-06. Figure 1 also shows this This is a comparative study in which two unprecedented growth of Gujarat economy since sides or perfections and imperfections of the two 2005-06 well above Kerala economy. Dholakia models of development were brought in. Secondary (2007) observes that Gujarat has been a frontline data were reaped extensively from various state ever since the accelerated economic reforms governmental agencies such as National Sample began in India in 1991-92. He asserts that Gujarat Survey Organization, Ministry of Finance, Kerala by now has a very well diversified and dynamic State Planning Board, Department of Economics structure of the economy with a large and and Statistics, Gujarat and National Crime Records expanding industrial sector, a high degree of Bureau and less from non-governmental agencies. commercialized agriculture and allied activities, Total, percentage, ratio and ranking were employed and a relatively large degree of urbanization. The widely in the study and tables and diagrams were active private participation and emergence of plotted in the report. entrepreneurs have contributed for this phenomenal growth. Wherein the status of Kerala is entirely 4. Kerala-Gujarat Models of Development: different as it was never been a major economic Sector-wise Analysis power in India. Although Kerala’s NSDP at current price The accomplishments in various socio- is far below to Gujarat especially since economic economic sectors made by the states of Kerala and reforms initiated in nineties, Kerala is just below to Gujarat are brought under discussion here. Gujarat in the case of per capita NSDP at current Imperial Journal of Interdisciplinary Research (IJIR) Page 397 Imperial Journal of Interdisciplinary Research (IJIR) Vol-2, Issue-7, 2016 ISSN: 2454-1362, http://www.onlinejournal.in price. Gujarat was 6th in terms of per capita NSDP capita NSDP shows its inclusive nature of in 1980-81 with Rs. 2,089 while Kerala was at 7th development while that of Gujarat is more with a lower Rs. 1,835. With small fluctuations exclusive as its phenomenal economic growth in mid-way Gujarat finished at 6th itself in 2013-14 the current decades has never been accompanied by while Kerala at 7th.
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