For the past few years, Gujarat and its much advertised “Gujarat Model” has drawn considerable criticism because of its inability to address the issue of unemployment or maintain social stability in the state. The state continues to experience rising pressure as large number of people migrate from UP, Bihar and other states putting pressure on existing facilities and exacerbates socio-economic problems. Critics argue that Gujarat has lost the pace of growth and remains a flashing examples of unfulfilled promises and increasing social stratification.

 Migration as a Symptom, Not a Solution

The Census 2011 shows 4.62 million interstate migrants in Gujarat which implies an increasing reliance on migration to support the state’s industrial core. Of these, an estimated 3.5 million migrated to escape alleged poor governance regarding their home states’ economies, especially in southern India. This demographic influx, famously advanced as evidence of industrial Gujarat, is now a subject of controversy. Adversaries allege it exposes deep-rooted issues: the inability to generate employment for the Gujaratis themselves while for the past decades the policy makers have been singing the tune of industrialization.

An Unfinished Growth Story

The Gujarat model, which is the core of Narendra Modi’s economic policy, was supposed to bring sustainable industrialization and employment. However, critics say it is far from the truth. Investment has been large scale and various industries have grown leaps and bounds but the employment generation has not followed suit and the local Gujarati population has grown disillusioned with this reality. The lack of correlation between corporate growth and employment creation at the base level is another weakness of the model that has emerged; people have asked what kind of economic prosperity can Gujarat offer when its business growth model cannot guarantee employment to its citizens.

 The Socio-Economic Divide

Adding to Gujarat’s problems is the state of affairs of the vulnerable, especially the Muslims who remain unemployed and socially and economically restrained. Just like in other states, economic pressure and policies considered to align with Hindutva have compounded their risks. A recent upsurge in ethnic clashes is indicative of the increasing gap between the native ethnic population and the new comers who are fighting for scarce resources.

Of course, migrants themselves have issues in Gujarat. Most come with dream of a better life only to be faced with cultural conflict, less than desirable working environment and conditions and poorly developed social amenities. Critics say this state of affairs describes systemic governance deficits in governance in both Gujarat and other states, such as Uttar Pradesh and Bihar, where the lack of economic growth and proper governance forces residents to look for better opportunities elsewhere.

 A National Dilemma

Gujarat’s struggles have broader implications for India’s economic narrative. This sort of migration can only suggest that apart from pull factors such as opportunities there are push factors such as distress. Unemployment, inflation and defective governance structure have made UP and Bihar the centres of poverty and migration to other states. All these systemic problems, therefore, cast doubt on India’s preparedness to begin asserting itself as an up-and-coming world power when domestic socio-economic inequalities are still apparent.

At a recent rally, Rajnath Singh, defense minister of India, said that India can give more loans to Pakistan than the IMF which eventually created headlines but at the same time came under criticism. Skeptics were quick to highlight the irony: India has 83 million people in absolute poverty and 63 million in multidimensional poverty, and 23 % of Indians are living in poverty. These indicators can be said to be in vivid contrast to the story of economic development and raise questions about the credibility of the Gujarat model that was once a pillar for India’s growth.

 The Road Ahead

For Gujarat, and by extension India, the demand for rebalancing of the economy is long overdue. Employment genesis needs to be a priority, with such changes that would make the labor market as non-conflicted as possible. Unless these problems are solved, the Gujarat model might widen the chasms further, which may not only mar the image of the state but that of the India Inc. growth story as well.

While India moves forward, strengths of Gujarat coupled with its problems also cannot be forgotten. By these and many other social issues, the country cannot be ready for genuine growth and can take its rightful place among the world’s leading economies only if the mentioned challenges are recognized and resolved.