Mr. Narendra Modi, Chief Minister of Gujarat

A somewhat shy and self-effacing man, Gujarat’s Chief Minister, Mr. Narendra Modi, is credited with much of the economic renaissance currently transforming the state into an economic powerhouse. His personal website says, “He is a man who blots out the line of demarcation between the state and society. The hierarchy of the ruler and ruled breaks down… in the great adventure of the reconstruction of a new Gujarat.”

Whether or not this is true, there is little doubt that Gujarat is making economic waves. Development expenditures increased from $US 3.8 billion in 2002-03 to $US 5.2 billion in 2006-07, while the fiscal deficit has been reduced from $US 6.4 billion in 2001-02 to $US 3.3 billion in 2006-07. The number of telephones (fixed line plus mobile) rose from just 200,000 in 1981 to over 9.9 million in 2006.

At the same time, the elementary school dropout rate has fallen dramatically, from 49 percent in 1991-92 to just three percent today, and education – particular for women – has stepped onto center-stage.

Tourism development is also a big part of Modi’s agenda. “India will soon have the largest tourism industry in the world, and Gujarat could become an important tourist destination,” Modi said, when launching Gujarat’s Year of Tourism in January 2006. “Our state is number one in the country as far as the number of heritage sites per square kilometer is concerned,” he added.

Gujarat’s tourism potential is undeniable. The state has sites of great historical importance, including the medieval city of Champaner, inscribed on the UNESCO World Heritage list; the intricate Jain temples of Palitana and the 5,000 year-old Harappan ruins at Dholavira. The diverse wildlife (Gujarat has the last remaining Asiatic lions in existence, among other rare species), hill resorts and princely palaces are further attractions—not to mention top facilities for medical and dental tourism.

Modi also emphasized the necessity of good infrastructure to promote tourism in Gujarat. This is of critical importance, as the state-run Toran Hotels are often sadly run-down. The important western city of Bhuj is linked by air with Mumbai but not with Gujarat’s biggest city Ahmedabad. And while many of the trunk roads are excellent, secondary roads are often crowded and in a state of disrepair.

To Modi’s great credit, the government of Gujarat increased expenditure on tourist infrastructure development from $US 7.3 million in 2005 to nearly $US 25 million in 2006; over $15 million of this sum was to be spent on infrastructure.

An important component of Modi’s Tourism Development Program is the Tourism Incentive Package Scheme. Developers building new hotels that meet certain minimum criteria (including provision of in-suite facilities and in-room Internet access) get big tax breaks. Hotels with a minimum of 20 rooms and within a mile of the coast attract special favor. It is too early to judge the effect of these incentives, but the effect on direct private investment in tourism is likely to be very positive.

Infrastructure development in the non-tourism sector has also been dramatic. In 2000-01, over 4,000 rural villages in Gujarat relied on water tankers for their water supply; by 2006-07 this figure had fallen to just 185. Further, the number of villages connected to three-phase electricity increased nearly tenfold from 2003 to 2007.

Despite some ongoing concerns about Modi’s authoritarian style, voters have (at least until recently) seemingly been happy with Modi, who has delivered economic advancement for Gujarat far more than proportional to its size. Development has been partly facilitated by the state government’s Global Investors’ Summits of 2003, 2005 and 2007. The most recent, in January 2007, attracted delegations from the United States, Japan, Singapore, China, Israel, South Korea, Italy and other countries. In total, over $US 100 billion worth of investment has resulted from these summits.

In July 2007, Modi expressed a determination to position Gujarat’s information technology sector firmly on the international stage. “Gujarat is keeping pace with the latest trends in the global IT sector,” he said. “We are determined to see Gujarat emerge as an IT giant in the world.”

But Narendra Modi’s days as Chief Minister are now in the balance. With state elections scheduled for October 2007, voters are weighing up his style and substance. There is no doubting the latter, but concerns about Modi’s “authoritarian” style continue to surface. Perhaps the position is best summed up by Aditi Phadnis, writing in The Business Standard on 11 August 2007: “The Gujarat assembly elections will be Modi’s election.”