The political ascent of Narendra Modi is largely attributed to him flaunting the ‘Gujarat Model of development’, which ultimately cut ice with the Indian voter and won him the national elections. However, the ‘Gujarat Model’ has some glaring flaws, which have been discussed at length in Grand Illusion, the GSPC Disaster and the Gujarat Model, a recently released book authored by Subir Ghosh.
Take for instance, the Gujarat State Petroleum Corporation (GSPC), which has been—for more than a decade and a half—projected as the leading economic light of the so-called Gujarat Model. The corporation has been used as the flagship project of an "economic resurgence" that the Narendra Modi government sought to promote following Modi's re-election as Chief Minister of the state in the aftermath of the 2002 riots. Unbridled industrialisation was used as a cloak to cover the stains of the 2002 riots, and for this a home-grown company served the purpose.
But then, the GSPC, essentially speaking, is not Modi's baby, for it had existed for close to a quarter of a century before he and his regime selected the corporation to be the face of the Gujarat Model. A decade and a half later, it is symbolic of the Gujarat Model, or rather everything that is wrong with the hype, and subsequently the myth, surrounding that abstruse concept. The GSPC has been an unmitigated financial misadventure all through, and serves as a classic case of how political braggadocio is a sure-shot shortcut to financial disaster.
Time and again, the Comptroller and Auditor-General (CAG) of India has hauled up the corporation over its cavalier attitude towards new ventures that never paid off, inability to manage its finances, and essentially living much beyond its means. Yet, the state government, both during Modi's tenure as Chief Minister and even later, has cocked a snook at all criticism, and continued to play the GSPC card.
The long and short of it is that the GSPC never made money, and in fact continued to bleed the exchequer. As losses spiralled out of control, Modi's relocation to New Delhi as Prime Minister came handy: the Oil and Natural Gas Corporation (ONGC) was made to bail out the GSPC, by buying out the latter's stake in the KG Basin project. This was a price that the nation had to pay for a gamble gone wrong about which the CAG had repeatedly pointed out.
Ghosh’s book charts GSPC's growth since 2002, and summarises the story thus: What was Modi's pride became Gujarat's embarrassment and India's shame.
(An extract from Grand Illusion, the GSPC Disaster and the Gujarat Model, will be carried later in the day on National Herald’s website).