Indian election: Can frontrunner Narendra Modi replicate Gujarat economic 'miracle'?

The banks of the Sabarmati River that divides Ahmedabad are being dug up to make way for a​ 10-km riverfront park and tourism district​. On completion, local officials hope, the ambitious project will echo the South Bank in London – a symbol of the vibrance of the largest city in the go-getting western state of Gujarat. 

As India’s month-long elections enters its last leg, the high-decibel campaigning has focused on the economy of Gujarat, a state ruled for more than a decade by Narendra Modi, who is widely touted as the nation's likely next leader. Voters in seven states including Gujarat go to the polls Wednesday.

Amid an economic slowdown and frustration with the ineptitude of the current government, Mr Modi pitchs himself as the man who can get the economy back on track, just as he did in Gujarat. Over the last decade the state has seen a sharp jump in industrial and agricultural output. Yet in Ahmedabad, there are mixed views on Modi’s contributions to the prosperity – and a degree of skepticism about his prospects on the national stage.

Modi's Gujarat achievements 

Across India, Modi's pitch holds considerable appeal, including to traditional supporters of the incumbent Congress party. While they distrust the Hindu nationalism of Modi's Bharaitya Janata Party, they are also envious of Gujarat's superior infrastructure – smooth highways, rows of new factories, and other signs of development. 

However, local businessmen and economists note with pride that the state’s economy has long outperformed the rest of the country. Blessed with a long coastline, Gujaratis have been trading with the world since the twelfth century. The region has benefited from generations of diaspora remittances – Gujarati Patels run shops from South Africa to America – and access to the latest technology.

“By and large we are a business-like people, enterprising and not prone to labor unrest,” says Yoginder Alagh, a former federal minister and chancellor of the Central University of Gujarat in Ahmedabad.

What everyone agrees on is Modi’s contribution to infrastructure – he strengthened the roads, improved water supply and brought regular power to the villages, something that has eluded even the most prosperous states in India's south.

In an already business-friendly state, he went all out to woo big industries through events like Vibrant Gujarat, a biennial conference for global and domestic investors. Some of that wooing hasn't panned out. Farmers protesting land acquisition have forced the cancellation of special investment regions, and a new financial city near Ahmedabad so far few takers. 

Yet branding has been critical to his image. “He generated confidence in investors,” says Sunil Parekh, a former director of the Gujarat chapter of the Confederation of Indian Industries. “There was a feeling that if there was a problem, he would solve it.”

That sense of responsiveness was partly created by freeing bureaucrats from political interference. Sebastian Morris, a professor at the Indian Institute of Management in Ahmedabad who advised the state’s electricity company, says he sees very little day-to-day intervention from local politicians. “Of course, there’s heartburn among the ministers,” he said.

Modi's way or the highway

In Gujarat, Modi has centralized power in his office, sidelining opponents and rivals, and heads up a trusted team of bureaucrats, some of whom are expected to accompany him to Delhi if he comes to power. Those who’ve worked with him say he’s efficient, decisive, and ruthless.

“With Modi, it’s my way or the highway,” says a retired official.

Most officials say corruption – a perennial complaint in India – is somewhat kept in check. But some businesses have benefited more than others. In 2009, Modi drew Tata Motors’s first Nano factory to Gujarat with an irresistible package of incentives that included soft loans and available land.

The focus on business has come with some costs, and not everyone finds the government responsive. Pollution remains a problem: In 2010, the Central Pollution Control Board labeled Gujarat the country's most polluted state.

Despite its prosperity, Gujarat also scores poorly on human development measures like poverty reduction, education, and sex ratios. It ranked ninth of 28 states in India’s latest Human Development Index, faring worse than other poorer states.  

Marginal and tribal populations in the under-developed eastern region of the state are the worst off. One survey here found 55 percent of children under five to be malnourished. 

“If Gujarat has good lessons, it also has some negative ones,”  especially in its treatment of marginalized groups,” says Mr Alagh. 

Electricity and industry

The disparities are evident even on the outskirts of Ahmedabad. In a slum in Maninagar, Modi’s state assembly constituency, the residents have never seen their chief minister. They enjoy electricity in their shanties but not much else.

Water supply is irregular and polluted and they battle to get the garbage heap next to their homes cleared. The secondary school is too far, so older children help their mothers make incense sticks for sale. In homes nearby, blue and red dust from dye factories settle on clothes and in lungs.

“I’ll press that last button,” says a mother here, referring to a new voting option on the electronic ballot: “None of the Above.”

Should he become India's prime minister, Modi seems likely to carry his industry and infrastructure focus to Delhi.

Whether he can also carry his “one-man-show” is less clear. Many here say he’ll have to learn to be more collaborative on a national stage crowded with so many powerful leaders. Much depends on how many seats the BJP gets in a parliament that has yielded only coalition governments for the past two decades. 

“Here everyone has fallen in line,” said a bureaucrat, “but it will take him time to get his national alliance to fall in line.”