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Jun 20, 2013, 01.24 PM IST | Source: Moneycontrol.com

Not just Gujarat, Kerala model too has many warts

For quite a while now, the Gujarat-versus-Kerala model has been seen as short-hand for the growth-versus-distribution argument: whether the state should try and promote growth first to increase incomes and hence reduce poverty, or try and distribute resources more equally first and then enable faster growth.

R Jagannathan , Editor-in-chief, digital and publishing, Network18 Group
R Jagannathan
Firstpost.com

Even as Narendra Modi's elevation has prompted increased scrutiny of the Gujarat growth model with even a supposedly neutral Planning Commission weighing in with criticism on its social indicators the Kerala model is also receiving some stick from informed commentators.

For quite a while now, the Gujarat-versus-Kerala model has been seen as short-hand for the growth-versus-distribution argument: whether the state should try and promote growth first to increase incomes and hence reduce poverty, or try and distribute resources more equally first and then enable faster growth.

The commonsense answer should be both, since without growth there can be no equity, and without some modicum of equity, there can be no social cohesion that is vital for growth.

Economists, though, have pitched their tents on both sides. While Jagdish Bhagwati and Arvind Panagariya of Columbia University have been flag-bearers for the growth model, Amartya Sen and some Leftie economists have extolled the social-sector led Kerala model.

To which Bhagwati and Panagariya have had a riposte : even the Kerala growth story is private consumption-led, and the state’s higher ranking on human indicators is nothing more than a historical artifact an advantage that Gujarat did not have.

Now, Swaminathan S Anklesaria Aiyar has questioned even the famed Kerala advantage in social indicators by pointing out its high crime statistics. He raises an important point in The Economic Times today: if Kerala has benefited from better education, health and women's education, why is its crime rate (especially against women) so far above the national average?  Of the nine parameters of crime studied murder, hurt, rapes, assaults on women, insulting modesty of women, cruelty by husband, riots, cheating and theft Kerala leaves the national averages behind by a mile on seven of them. Kerala is hardly the human welfare paradise that Amartya Sen would like us to believe it is.

As a Socialist poster-child that presumably prioritises human development over capitalist growth, Kerala fails the test. Its high human development numbers are not the result of state investment or welfarist policies, but growing private wealth contributed by the diaspora.

Says Aiyar: "True, it (Kerala) has the highest Human Development Index, life expectancy and literacy, and the lowest fertility and infant mortality rate. But these have not arisen by emphasising welfare over GDP or economic growth…This owes a lot to rising remittances from overseas Keralites, which now account for 32 percent of state GDP. So, Kerala’s high social indicators are correlated not with poverty or lack of economic growth, but with rising Mammonisation."

Clearly, development is more than just growth or distribution. It may be easy to pick holes in Modi’s growth story, but that's only because the other growth models have not been given enough scrutiny.

Aiyar's article throws light on this aspect, and clearly worth a read .

 The writer is editor-in-chief, digital and publishing, Network18 Group

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