The mystery of Gujarat’s investment numbers

Representative image.

Controversy surrounds the steep rise in investment flow in Gujarat in 2019, when it jumped by 47 times in one year, making up 85% of the country’s investment implementation.

The home state of Prime Minister Narendra Modi, whose model he projected while staking a claim in leading the country in 2014, has seen an astounding growth of 4,673% in investments implemented to Rs 15.19 lakh crore in 2019, from Rs 31,819 crore in 2018.

However, sources in the Union Commerce Ministry stated that “these numbers are unrealistic”, while the Opposition has accused the Gujarat government of historically fudging investment numbers.

What is also mysterious is that amid these investment figures, the unemployment rate in the state has been on the rise in the face of slowdown in the global economy.

According to official data put out by the Department for Promotion of Industry and Internal Trade (DPIIT), Gujarat contributed 85% of the project implementation in the country.

DPIIT publishes the numbers on the basis of states reporting to the Centre on investment proposals and investment implementation.

Thanks to the numbers reported by Gujarat, the national investment flow across the country has surged by seven times to Rs 17.97 lakh crore in 2019 from Rs 2.56 lakh crore in 2018.

However, the employment numbers from the state contradict the trend in investments. The unemployment rate in the state has surged by 70 basis points at the year-end, according to data available with the Centre for Monitoring Indian Economy (CMIE).

On a monthly basis, for the six months of 2019, unemployment rate was higher than that of the same month in the preceding year. For December 2019 as well, the unemployment rate in the state stood at 4.4%, up from 3.7% in December 2018.

Gujarat Industries Secretary Manoj Das attributed the rise in investments to “pro-business” policy of the state and the “vision” of Chief Minister Vijay Rupani. The department is handled by Rupani himself.

“Vibrant Gujarat is a farce. They sign inflated memorandums of understanding (MoU), where the number indicated is far higher than the actual investment. And when the actual investments come up, they enter the inflated amount signed in the MoU,” senior Congress leader from Gujarat Shaktisinh Gohil told DH.

Interestingly, Gujarat has also reported a four-time jump in investment proposals during the year, making up 51% of investment proposals across India.

When questioned about the rise the unemployment, Das pointed at a survey by the National Sample Survey Office (NSSO) claiming that the state “has the lowest unemployment rate in the country”.

Rise in unemployment

However, the backdated survey by NSSO reveals that the unemployment rate saw an upswing in Gujarat and was higher than all other Indian states, rising from 0.5% in 2011-12 to 4.8% in 2017-18, mainly because of higher joblessness rate among youth in the state which went up from 0.8% in 2011-12 to 14.9% in 2017-18 in rural areas, and from 2.1% to 10.7% in urban areas.