Economic Management in the Gujarat State: Key Characteristics and Selected Policy Initiatives
46 Pages Posted: 11 Apr 2015 Last revised: 25 May 2015
Date Written: April 4, 2015
This paper analyses key economic management characteristics exhibited by the Government of Gujarat and its initiatives to sustain broad-based growth. A growth diagnostics framework of Rodrik (2010), modified to suit India’s federal context in which states will play an increasingly prominent role, focusing on addressing demand-supply gaps for a particular sector in investments, skill-sets, livelihoods, knowledge application and productivity, is used in the paper to analyse Gujarat’s economic management. The paper finds that Gujarat’s overall economic management and design and implementation of three programmes – Jyotigram Yojana (JY) for improving rural and agricultural power supply; Chiranjeevi Yojana (CY) for reducing maternal and infant mortality; and rapid agricultural development in the Saurashtra region – are broadly consistent with the modified growth diagnostics framework. Gujarat’s economic management is characterised by issue- and sector-specific initiatives to obtain desired outcomes rather than by an adoption of a pre-conceived growth model applied across sectors. Gujarat has relied on developing growth nodes across a variety of sectors designed to enhance resiliency of the economy while generating growth.
The key challenges facing the government include meeting the residential ownership aspirations through affordable housing; further enhancing competence in public financial management, particularly in project management and in improving productivity of capital; and in narrowing the gap between its economic and social sector performance, particularly in reducing infant and maternal mortality rates.
Keywords: Gujarat, growth drivers, state and market, economic management, Jyotigram Yojana, Chiranjeevi Yojana, economic freedom of states in India, affordable housing, Vibrant Gujarat
JEL Classification: D04, H71, H72, H 77, O40, Q18
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