Article

International Journal of
A Comparative Study Rural Management

 2016 Institute of Rural Management, Anand

12(2) 104–124
of Gujarat and Kerala
SAGE Publications
Developmental sagepub.in/home.nav
DOI: 10.1177/0973005216660908
Experiences http://irm.sagepub.com

Sazzad Parwez1

Abstract
This article examines the experiences of economic growth and social development
with reference to comparative analysis of Gujarat and Kerala. Different aspects
of economic growth and social indicators have been observed. Theoretical and
empirical evidences suggest that there is a positive relationship between eco-
nomic growth and social development. However, the economic development
has not been necessarily accompanied adequately by social development, espe-
cially in case of Gujarat. It is reinforced by the Human Development Index (HDI)
position of Gujarat. Kerala has performed positively in terms of social indicators
but economy has been in disarray, as it is ranked among bottom half of the
country. This study is based on secondary data gathered from several govern-
ment and international organizations. The article concludes by arguing that the
governments should be equally concerned about both social development and
economic development.

Keywords
India, Gujarat, Kerala, economic, social, development

Introduction
Economic and social development are suggested to be interrelated, one leads to
another. Studies suggest that mere focus on the economic development and ignor-
ing the social development leads to weak and unsustainable development.

1
School of Rural Management, Indian Institute of Health Management Research, Jaipur, Rajasthan,
India.

Corresponding author:
Sazzad Parwez, School of Rural Management, Indian Institute of Health Management Research, Jaipur,
Rajasthan 302029, India.
E-mail: [email protected]

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Parwez 105

However, it has been observed, the main emphasis has been on economic growth
and not on policies on education and health driven development.
Deprivation mainly in terms of education, health and adverse quality of life
eclipses the economic development in general. Planning and strategy for alloca-
tion of resources between economic and social sectors and necessary policy deci-
sion are in need for the nation. Giving due importance to social sectors in the light
of economic growth and gains from the benefits of demographic dividends would
lead to development of human capital.
Disparity in economic and social development is generally a cause for despair
in a democratic set-up. However, such disparities have not received adequate
attention. Of late, governments are giving due attention to the facet of deciding
resource allocation across the country. Whenever allocation of resources among
states took place to address the problem of regional disparity, one or the other the-
ory gets acceptance of the policymakers over the rest of the competing alternatives
due to factors of political economy (Dholakia 1980, Roy and Bhattacharjee 2009).
In context of social factors, such as education and health, it has been observed
that attainments of these social services are low in nature. Low level of accessibil-
ity leads to higher inequality on the social and economic front. United Nations
Development Programme (UNDP) (2011) reports that inequalities in India at a
disaggregated level suggest that disparity in the dissemination of education is
the highest among all other socio-economic factors. It requires special attention
on the part of the government to be inclusive for socially backward communities
since they continue to witness constraints in accessing education.
It has been argued that the rapid economic growth of India in the contemporary
decade was due to the ever-increasing investment in human development in the
preceding years (Kurian 2000). On the contrary, the Kerala model of development
leads to high level of human development without complementing with economic
growth which brings focus back to the role of public expenditure on social sector
(Chakraborty 2003). Several questions have been asked about the Kerala model
in context of resource crunch in the state with high level of social expenditure
and fast deteriorating financial picture. Gujarat lying in western corner of the
country showcases a completely different picture from Kerala. Being one of most
developed state with respect to economy does not live up to the promise of social
development; it even lacks gravely in most basic social facilities (education and
health).
Disparities in the overall economic development can be understood in terms
of fluctuating levels of infrastructural facilities that prevail in different states.
Development of infrastructure is indispensable for increasing efficiency of the
production system and productivity of economic activities (Parwez 2014). An
attempt has been made in this article to study the regional disparities in India with
special reference to Gujarat and Kerala.
Economic and social disparities are not only affected by production and con-
sumption. But it largely depends on several direct and indirect externalities.1 The
literature shows that there are studies investigating the correlation between eco-
nomic and social disparities. It also suggests that social indicators do play a part in

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106 International Journal of Rural Management 12(2)

increase of productivity, creation of income and employment for the economy and
eventually raises the quality of life for the people (Esfahani and Ramirez 2003,
Gramlich 1994).

Relevance of the Study

This article is an attempt to have an open discussion about prevailing social and
economic disparity across the country. It tries to compare two very different states,
evolving on the basis of contrasting developmental model. The ‘Gujarat Model’
which is primarily based on physical infrastructure and revenue generation facili-
tated by the state government while the ‘Kerala Model’ is based on equitable
distribution led by the state machinery.
Several scholars have compared Gujarat and Kerala with states such as
Bihar, Tamil Nadu, Maharashtra and several smaller states like Uttarakhand,
Chhattisgarh and so on due to their contradictory nature of developmental factors.
Gujarat and Kerala with their heterogeneous developmental experiences provide
an opportunity to study and understand implications of two different development
processes. As a state Gujarat is highly industrialized with higher gross domes-
tic product (GDP);2 on the other hand, Kerala is not. Gujarat has attracted high
amount of foreign direct investments (FDIs); Kerala on the other hand is less
successful on this count. The lack of investment and industrialization in state is
attributed, on many occasions, to deep-rooted unionism and political activism
influencing the economic decisions.
Economists Bhagwati and Panagariya (2013) have initiated the debate over
Gujarat and the Kerala development model—the former being private invest-
ment-led growth and the latter for state-led public investment in the social sec-
tor. In policy dialogue, Kerala is considered as the definitive example of human
development; this is said to be the dividend of state spending on social indicators
like education and health. Gujarat fares poorly on social indicators, but is high on
economic growth led by entrepreneurial activities of the people.
The present study is based on socio-economic developmental experiences of
Gujarat and Kerala models in perspective. It studies both developmental models
with respect to several economic and social indicators. It tries to enhance under-
standing of socio-economic disparity in India with a comparative study on Gujarat
and Kerala (Dholakia, 2006).

Research Methodology
The study is mainly based on secondary literature and data sources. Data have
been collected from various sources such as government reports international
organization reports as well as data and reports of different departments of
government of India, Census of India, National Sample Survey (NSS),
National Family Health Survey (NFHS) and UNDP. Data have also been taken
from various peer-reviewed working and research papers of national and
international journals.

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Parwez 107

Four major indicators have been taken for assessing the overall economic and
social development for this study. These are economic, women development,
health and education. These four major indicators comprised of several sub-
variables of significant nature.
This article attempts to examine interstate inequalities in India particu-
larly referring to Gujarat and Kerala in terms of the following major and minor
variables:

• Economic development (state domestic product (SDP), poverty line, work-

• Women social demography (females per 1,000 males, child sex ratio, mean
force, worker population ratio and head count index).

• Health (life expectancy, infant mortality rate (IMR), institutional deliveries,

age for marriage for female, literacy rate and workforce participation).

postnatal care, child immunization, anemia among pregnant women and

• Education (literacy rate, children attending school, expenditure and school

government hospital bed).

management).

The limitation of this study is the lack of availability of disaggregated data of

some major social and economic indicators with respect to rural and urban cate-
gory. Interstate study is also vulnerable to the quality of available statistics due to
practice of fabrication and exaggeration of data to create false perception of the
states in national standing in order to gain political mileage and avoid uncomfort-
able questions on development.

Theoretical Perspective
Regional disparity is the foremost concern in several developing countries.
Neoclassical growth theories suggest that the movement of supply elements;
especially capital, technological advancement and work force, would be a cause
for decrease in state-wise disparities. Theories on dependency and structural
change say that regional inequality is an unavoidable product of the practices of
capitalism.
Academic bodies and scholars have discussed the regional disparity as a
broader issue, especially the Ricardo’s two sector model talks about focused
economic growth and sharing within agricultural and industrial sector leading to
growth towards a steady state with decrease in income for farmers (Boyer 1996).
Marx has also pointed that capitalist economy will lead to unequal distribution of
income; it would push the wages to the subsistence level (Kalecki 1971).
The neoclassical growth models say that economies across the world are
similar in nature in terms of priorities and technological inclinations. Neo-
Keynesians economist such as Steindl (1952), Kaldor (1955), Kalecki (1971)
and Pasinetti (1981) have highlighted the relationship between distribution
of income and implications on existing disparities. The neoclassical growth
theory (Solow model) puts emphasis on capital accumulation and decision

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108 International Journal of Rural Management 12(2)

of saving as a significant determinant of the economic development. It con-

siders two factors of production, capital and workforce, as defining factors
for output. In context of relationship between inequality and well-being of
population in two sector economies, Kuznets’ hypothesis (1955) argues that
in a two-sector economy with sectoral mean incomes, a persistent movement
of workforce from one sector to another may increase the overall disparity.
This phenomenon led to the term ‘Inverted U’ (I–U) hypothesis. With dispar-
ity within economies on rise, it has facilitated emergence of ‘convergence
hypotheses’ owing to seminal theoretic influences on endogenous growth
models from Romer (1992) and Lucas (1988).
Regional disparity has been the most important issue before federal India and
policymakers. The significant gap between the economically developed region
and the poor regions is determined by the availability of physical and social infra-
structure-led development. It results into positive implications on economic and
human well-being.
Dreze and Sen (1995) argue that huge deviations in the regional development
along with contrasting nature of social development have given rise to extraordi-
nary disparities in India. Additionally, with the long-term planning and processes
for raising the quality of rural living, challenge has been diverse in nature across
the country (Datt and Ravallion 1998).
Similarly, Majumdar (2004) has noted that states such as Kerala, Maharashtra
and Himachal Pradesh reflect stable performance with respect to social
development, although Kerala is not able to translate its social development
achievements into economic development. In spite of the prevailing low human
development, Gujarat has constantly shown good performances on economic
indicators. These factors are also observed by India Human Development
Report (2011) as significant inequality in the social development across the
Indian states. The state-wise disparity in poverty has been considerable though
there have been some improvements in the human development and the poverty
index since 1980s; the interstate inequalities and the relative status of the states
has basically continued to be the same.
Dreze and Sen (1995) noted that the inequality in social and economic pro-
gress across the states is extraordinary. Datt and Ravallion (1998) in a study on
poverty observe that states have varying capabilities for poverty reduction due to
multiple reasons. There is substantial variance in elasticity of the poverty index
to non-farm output among the states in India. Positively, there is low elasticity for
poverty in Kerala due to the high level of literacy status. Higher level of educa-
tion leads to better utilization of available resources and opens up opportunities to
be exploited. It also observes that physical infrastructure apparently contributed
to a larger extent in poverty reduction as it has been observed in case of Gujarat.
Furthermore, it has been noted that disparities in quality of life across rural–urban
regions and sectors is a major concern.
Bhagwati (2013) on the other hand suggests that it is ultimately the invest-
ment-led development of infrastructure and economic growth which will lead
to the reduction of poverty. Social factors such as education and health can play
the role of value addition in the economy rather than the architect of economic

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Parwez 109

development. The fundamental argument is that the effect of economic develop-

ment largely depends on utilizing fruits of economic growth. Dreze and Sen (1995,
2013) says that government emphasis on education and health care determines
public participation which is evident and easier for economies such as Kerala, but
may not be possible in Gujarat, where social developmental activities are slow.
Kerala on the contrary, with an impressive record with respect to education and
health factors, has failed to attain higher economic growth.

Disparities in India
During the initial part of the post-independence phase, considerable amount of
disparity in the economic and social development took place in states across India.
The major goal of the planning initiative was taken by the government in early
1950s. The aim was to decrease inequality and to realize balanced development.
Several policy instruments such as direct public investment and restructuring
of institutions have been put in place for the first few decades after independ-
ence. These processes ensured that disparities were not getting further aggravated.
Economic reforms and liberalization in the early 1980s and then full-scale reforms
and restructuring in 1990s led to decrease in public investment (Ahluwalia 2008).
Investment from private sources becomes the principal source of economic
development as flow of capital to the regions where environment for conduct-
ing business activities are more feasible. Therefore, states with better physical
and social infrastructural settings attracted larger share of investment since eco-
nomic reforms. Bagchi et al. (2005) highlight that major share of investment went
towards southern and western India such as Maharashtra, Gujarat, Tamil Nadu,
Andhra Pradesh and Karnataka. Backward states like West Bengal, Chhattisgarh,
Jharkhand and Orissa have also received private investment proposals, in recent
times, for setting up mining and heavy industries mainly due to abundance of
natural resources such as iron and coal. States which lack natural resources can
only attract investment if they provide suitable environment accompanied with
physical and social infrastructure; it is only possible with heavy public invest-
ments. But fiscal situation of several state governments is not that conducive for
such investments (Kurian 2000). State governments across India are suffering
from huge revenue imbalances, and hence such investments are small. In some of
the backward states, a large part of their expenditure goes into education, health,
drinking water, sanitation, road connectivity and so on, and hence are facing acute
situation (Kurian 2000).
Per capita income differentials among states in the country have been very
much visible and broadening even more. Thus, while the economic development
is shifting in the south-west direction, it is complemented by the demographic
movement from the opposite direction. While more job opportunities are gener-
ated in these states and available labour surplus in the backward states in India
inducing large-scale migration. This may lead to serious implications on nation’s
health. The interstate comparison of states highlights indifferent performances in
respect to factors such as poverty, rural–urban disparity, unemployment, educa-
tion, health and financial inclusion.

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110 International Journal of Rural Management 12(2)

The three most important dimensions of HDI, that is, education, health and
income are attuned to disparities across the population. Internationally, India is
ranked 119 out of 169 countries but loses 32 per cent of its value when adjusted
for inequalities (Deaton and Dreze 2002, HDI 2013). To simplify a state-wise
comparative study, the indices are normalized with the mention of goalposts
defined in the HDI report (Dholakia and Dholakia, 1980).
As per global goalposts reference, Kerala’s ranking is 99 (falls in the mid-
dle of Philippines and the Republic of Moldova) while Orissa is ranked at 133
(between Myanmar and Yemen). Amongst other Indian states, Madhya Pradesh
observes the highest increase in inequality. Ahluwalia (2002) observes that dif-
ferences found in HDIs for interstate comparative analysis with other countries
suggest that inequality in the human development is clearly more pronounced in
the Indian states than elsewhere.
Figure 1 reflects on the HDI status of major Indian states both at the aggregate
and disaggregate counts. Overall, India’s HDI value (as per global goalposts) is
0.504. Kerala with the highest value of 0.625 is being followed by 0.569 of Punjab
and Orissa lies in the bottom with 0.442. Gujarat has shown improvement with
0.511 from the earlier position (India Human Development Report, 2011). Figures
on HDI values among the states reflect negligible variation and the sub-indices
for education and health display higher variations. The income index displays the
least amount of variation.
There are large spatial imbalances, biased to the states comprised of better
physical infrastructure for urban industrial corridors and attract the large share
of investment (Ghosh 2006, Parwez 2015). The hilly areas in the north-east and
eastern states which lack adequate infrastructure and environment has witnessed
negligible investment, low growth rate and employment generation. The devel-
opmental spillover effects have been uneven and low in case of north-east and
eastern states (Suryanarayana, Agrawal and Prabhu 2011).
Gujarat’s economic growth in comparison to other states has been much bet-
ter and has topped the list, regardless of the period taken (Hirway, Kashyap and
Shah 2002). The ill effects of trade unionism (strikes and lockouts) are wide-
spread in Kerala which is reflected through industrial activity and productivity,
but Gujarat has been largely untouched by that. Gujarat has constantly witnessed
lowest amount of strikes and lockout-led man days lost in comparison to other
states in the country (Labour Bureau Report 2013).

Socio-economic Study of Gujarat and Kerala

Jagdish Bhagwati and Amartya Sen, perhaps the two utmost dominant voices
among Indian economists, exemplify the two different schools of thought about
the India’s development path. Bhagwati argue that growth must be viewed as an
instrumental tool; a procedural consequence that would decrease poverty and
regional disparity. He asserts that there is a need for land reforms to develop better
physical infrastructure for addressing the issue of undue concentration of eco-
nomic activities and likely widening. Sen argues that the conception of develop-
ment should not lead to only capital accumulation and increased GDP.

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 Parwez
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Figure
Figure2.
1.HDI
HDIand
andits
itsDimensions:
Dimensions:Indian
IndianStates
States
Source: Human Development report, Government of India (2013).
Note: Vertical bars (orange for states and red for India) specify the HDI; black circles (inside the bars) specify the education; the cross inside white squares reflect on
the income dimension and black diamond’s (outside the bars) indicate health dimension; and the states are organized in ascending order of their HDIs.

111
112 International Journal of Rural Management 12(2)

Bhagwati says that the development process consists of savings used for
investments; education comes later on. His argument suggests that growth would
lead to demand and then to creation of employment. He considers literacy and
education additive factors rather than major catalyst of development. Amartya
Sen has a broader view on development; he argues that aspects such as political or
social freedoms are the most significant factors for ‘development’ as freedom is
the fundamental element of development. The principal variance is in their view
on developmental approaches.
Dreze and Sen (2013) envision a larger role for the state and prescribe state
intervention in providing basic social infrastructure to facilitate health care and
educational accessibility for the citizens. They show that 20 years of sustained
economic growth in India has not resulted into corresponding improvement in the
social development. The high economic growth in Gujarat has not translated into
proportionally better social outcomes. For this reason, Dreze and Sen consider
the Gujarat model as a weak one. In a similar vein, Hirway (2013) also questions
whether the economic reforms inaugurated in Gujarat in the 1990s were capa-
ble of realizing more inclusive social outcomes. Sen has offered more compel-
ling case of Kerala as a better example for model of inclusive social outcomes.
Bhagwati and Panagariya (2013) argue that eventually it has been the Gujarat
model that has shown positive results on economic and social development front
since post-Independence. Furthermore, they argue that Kerala’s lackluster per-
formance in terms of economic growth and per capita GDP has been lackluster.
Bhagwati (2013) argues that the ‘Kerala Model’ comprises massive system-
atic public expenditure on education and health for long period of time achieved
due to aware and participative citizens. Comparing social indicators pertaining
to Gujarat, Kerala and a few other states, Sen identified various developmental
indicators suggesting that Gujarat ranked well below to states such as Tamil Nadu,
Himachal Pradesh, Kerala and few other major states.
‘Kerala Model’ represents an example of a predominantly redistribution-
oriented and state-led development initiative whereas ‘Gujarat Model’ talks about
the economic growth and enterprise-led development model.

Economic Status
Gujarat and Kerala are two very different kinds of states in terms of various social
and economic variables. Gujarat is industrialized state; Kerala is barely so.
Economic indicators such as FDI are taking place in Gujarat at high numbers
while Kerala has received lukewarm response in that front so far.
The SDP (2011–12) of Kerala (`61,176,700) for both rural and urban regions is
significantly higher than that of Gujarat (`31,520,567) (Table 1). Average annual
growth of gross state domestic product (GSDP) of Gujarat (2000–01 to 2007–08)
increased considerably with 9.20 per cent as compared with 7.76 per cent of Kerala.
Interestingly, both the states are doing much better than the national level growth in
GSDP which was just 3.98 per cent for the same period (Government of India 2012).
It has been observed that Gujarat’s growth rate is highest in the last two
decades, being closely followed by states such as Karnataka, Maharashtra,

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 Parwez
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Table 1. Comparative Status Based on Economic Indicators

Sl. Kerala Gujarat All India

No. Indicators Rural Urban Rural Urban Rural Urban
1 GSDP–Value added (2011–12)* 14,742,972 16,777,595 25,051,702 36,124,998 427,528,811 407,820,689
2 Percentage of population
9.14 4.97 21.50 10.14 25.70 13.70
below poverty line (2012)**
3 Unemployment rate*** 82 145 7 15 34 50
4 Worker population ratio (2011)*** 38.2 36.3 44.7 36.3 39.9 35.5
5 Head count index of Poverty** 12.60 12.00 26.7 17.9 33.80 20.90
Sources: *Government of India (2012), **Government of India (2013) and ***Labour Bureau Report (2013).

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Andhra Pradesh and Tamil Nadu. Kerala is nowhere in the picture. Throughout
the last two decades of the high level of economic growth in India, the contri-
bution of Gujarat has been phenomenal on various accounts. Though it has not
resultant in to major decline in number of people who fall in below poverty
line in Gujarat.
Reflection from poverty figures from the year 2011–12 suggests that Kerala with
7.05 per cent population below poverty line is performing better in comparison to
other states and way above to Gujarat (16.63 per cent) (RBI Report 2013). Both
Kerala and Gujarat are faring well if one compares it with the national status on
poverty of 21.92 per cent. The performance of Kerala is exceptional with respect to
reducing or controlling the poverty considering the low GSDP of the state and slow
economic growth. Decline in rural disparity in the last decade has been sluggish in
Gujarat as compared to Kerala, and also with contemporary economically devel-
oped states such as Tamil Nadu, Maharashtra and Andhra Pradesh (Sood 2012).
Minimum wages for unskilled workers reflects on Kerala’s supreme perfor-
mance in the implementation of social welfare measures and protection of labour
rights. Figures from the year 2011–12 suggests that Kerala pays minimum wage
of `150–510 to unskilled labour, which is highest in the country, on the contrary
economically advanced, Gujarat pays only `100–222 (Labour Bureau Report
2013). In rural setting, the minimum wage is lower than the urban centres for both
the states. It is evident that economically developed Gujarat has compromised on
welfare measures with non-implementation of welfare and social security meas-
ures (Parwez 2015). The prevailing low minimum wage in Gujarat is more indus-
try friendly but it requires correction as it does not even up to subsistence level to
lead cover basic needs.
Labour Bureau Report (2013) states that Gujarat has the least unemployment
rate among all states in India (barring Daman and Diu which is a union terri-
tory); Kerala’s performance has been sub-standard on unemployment rate which
is as high as 82 and 145 for rural and urban centres respectively. One interesting
fact is that the unemployment rate in rural Kerala is less than urban Kerala. Data
on employment also reveals that Kerala has significantly high number of unem-
ployed population.
Kerala has the history of strong labour movement; it is evident with the
high level of labour unionization and frequent strikes. Flexible labour law and
less unionization in Gujarat have worked as an instrument for exploitation of
labour (reduces the production cost) as well as creation of employment oppor-
tunities (Parwez 2015). According to the Census (2011), Kerala has the highest
tract under urban area, that is, 47.72 per cent in the country while Gujarat
has 42.58 per cent of the territory under urban area. It is also an indication of
further implication of social development on urbanization and concentration
of economic activates.
According to Sood (2012), during the last two decades (1993–2010), the
growth rate of employment creation in rural areas of Gujarat is on par with
Kerala, whereas urban areas of Gujarat created more jobs than Kerala. This
phase also witnessed decline in employment for rural Gujarat even though
higher economic growth was achieved. The decline in rural employment has

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Parwez 115

been accompanied by reduction in participation of farmers in high value crops

cultivation. The overall growth in employment is mainly ensured by growth
in services sector, especially in urban spaces. Largely, these new employment
opportunities are contractual in nature.
Data from Department of Productivity and Promotion (2012) clearly exem-
plify on the superiority of Gujarat on account of attracting FDI. For the period of
2004–10, Gujarat enjoyed the share of 5.79 per cent; Kerala attracted just 0.4 per
cent of the total FDI received. It showcases the level of economic viability for
these two states as perceived by the foreign investors.

Women Social Demography Indicators

Reducing the regional disparities is one of the major requisites for inclusive
development. To understand it further, a cross state assessment of social and eco-
nomic developmental variables reflects some interesting outcomes. Census (2011)
data suggests that Kerala has excelled in demographical status of women with the
highest sex ratio of 1,084 females per 1,000 males in the country, closely followed
by the southern state Tamil Nadu (995) while Haryana (877) has been ranked at
bottom. Gujarat’s performance is considered to be average among all major states
in India depicted by low sex ratio of 914, which is encouraging in some way if
compared with the past record of the state. Interestingly, one expected that the
economic development will lead to the better social development, contrary to the
fact that developed states like Gujarat and Maharashtra fare poorly with low sax
ratios of 914 and 925 respectively. Rural areas of Kerala have exceptional sex
ratio of 1,078, which reflects positively on evolution of Kerala’s development
process over the years.
These numbers are also reflections of respective state government priori-
ties (Table 2). Education does have an impact on empowerment, which can be
observed through the mean age of marriage for female in Kerala. It has been
observed that the mean age for marriage in both rural and urban region is more or
less the same. Figures on female literacy in the state of Gujarat showcase a sorry
picture. Kerala being ranked the best (literacy rate) while Gujarat falls somewhere
down the line.
It is evident that Gujarat’s economic development has not translated on
count of several social indicators. On a positive note, Census (2011) data on
women workforce participation shows that rural Gujarat is employing more
women then rural Kerala. NSS 64th round reveals a different picture in terms
of the overall employment of women in Gujarat (12.7 per cent), reflects on
below par performance in comparison to Kerala (39.3 per cent). The over-
all performance of the states on several indicators for women appreciates
Kerala’s approach of development.
NFHS (2005–06) reveals that there is a positive correlation between education
and married women’s participation in decision-making on family matters. Kerala
boasted with 62.5 per cent women participating in decision-making; lower in case
of Gujarat (56.7 per cent). In general, cross-states figures on various indicators
reflect dismal picture for women.

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116 International Journal of Rural Management 12(2)

Table 2. Comparative Status Based on Women Social Demography

Indicators

Sl. Kerala Gujarat All India

No. Indicators Rural Urban Rural Urban Rural Urban
1 No. of females
per 1,000 males 1,078 1,091 949 880 949 929
(2011 census)*
2 Child sex
960 958 906 852 919 902
ratio (2011)*
3 Mean age for
22.6 22.8 20.7 22.7 20.7 22.7
marriage for female**
4 Female literacy
92.92 94.99 62.41 82.08 57.93 79.11
rate (2011)*
5 Women workforce
participation 20.2 16.0 32.0 11.4 30.0 15.4
rate (2011)***
Sources: ***government of India (2012), *Census (2011) and **National Family Health Survey
(2008).

Health Care Status

The Constitution of India attributes ‘health’ to be the responsibility of the
respective state governments, rather than the central government (National
Family Health Survey, 2008). It designates every state to be responsible for
‘raising the level of nutrition, standard of living and the development of public
health as among its primary duties’. So far, the Indian states have not achieved
the desired results; in other words, the situation is bleak. Census (2011) suggests
that yet again Kerala is excelling among all the states in context of life expec-
tancy3 at birth (75.8 years). Despite improvements over the years, Gujarat’s life
expectancy at birth is 66.4 years. Kerala’s performance is also exemplary with
respect to life expectancy at birth in both rural (74.2) and urban (74.3) areas.
Additionally, gender-wise life expectancy of males (71.5 years) and females
(76.9 years) have been encouraging. Gujarat’s performance has been below par
in terms of life expectancy of rural population considering its economic might;
however, it is at par with the national average. Assam has been the worst per-
former among major states with respect to life expectancy of just 61 years for
males and 63.2 years for females.
Furthermore, Gujarat with moderate performance in IMR has been ranked 10th
in the country. It is evident from Table 3 that Gujarat’s performance against IMR4
(46) is average with IMR of 58 in rural Gujarat, which reflects on poor state of
affairs. In contrast, IMR in Kerala is lowest (11) for the year 2011, the highest
has been observed in Madhya Pradesh (59) while the national average is 44. The
rural–urban IMR gap remains thick, only negligible change has been witnessed
between 2000 and 2010 in both Gujarat and Kerala.

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Parwez 117

Table 3. Comparative Status Based on Health Care Indicators

Sl. Kerala Gujarat All India

No. Indicators Rural Urban Rural Urban Rural Urban
1 Life expectancy
74.2 74.3 65.0 70.2 64.9 69.6
at birth (2011)*
2 IMR (per 1,000)** 12 10 58 35 58 36
3 Institutional deliveries
in the last three 99.3 99.9 48.1 83.7 37.8 70.5
years (%)***
4 Mothers who received
postnatal care within
99.3 99.9 52.9 81.1 42.3 72.0
two weeks of
delivery (%)***
5 Children between
12—23 months fully 80.3 76.9 51.4 66.8 50.6 63.1
immunized (%)***
6 Anaemia among pregnant
35.8 27.7 61.7 59.1 59.0 54.6
women (%) in 2006 ****
7 Available government
17,595 20,021 9,925 17,983 196,182 432,526
hospital bed (2013)**
Sources: ****National Family Health Survey (2008), **CBHI (Central Bureau of Health Intelligence)
(2013), *India Census Vital Statistics Division (2012) and *** Census of India (2009).

It has been well documented that Kerala excels in health indicators. Data on
‘institutional deliveries’ and ‘mothers postnatal care’ suggests that Kerala has
almost 100 per cent coverage; comparatively Gujarat has very low coverage.
Picture is not that different in case of critical health indicators such as ‘children
immunization coverage’; Kerala (78 per cent) outperforms Gujarat (52 per cent).
It should be noted that within Kerala, immunization coverage in rural areas is
better than the urban area. In case of Gujarat, urban areas are relatively more
equipped (Government of India, 2008). Table 3 also reveals that anemia among
pregnant women prevails throughout Gujarat, though Kerala is performing better
than Gujarat; rural areas of both the states are largely suffering.
Kerala has been relatively more proactive in providing health care facilities to
citizens (Government of Kerala, 2010). It is also evident from the data reported by
CBHI (2013) on population served by hospitals; Gujarat and Kerala’s government
hospital serves 1,746 and 910 people respectively. Both rural and urban areas in
Kerala provide better coverage in terms of government hospitals. Kerala’s perfor-
mance has been noteworthy as it provides 17,595 beds in government hospitals of
rural areas, whereas the coverage by government hospitals in rural Gujarat found
wanting with only 9,925 beds in place. There could be several reasons for the
poor performance of Gujarat and relatively far better performance of Kerala with
respect to inclusive health status. One such significant factor is public expenditure
on health care. Kerala’s and Gujarat’s investment in health care was `507 and
`320 per capita respectively for the year 2009–10 (CBHI 2013).

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118 International Journal of Rural Management 12(2)

Gujarat’s public health care delivery structure seems to have deteriorated, even
though there is a sign of improvement in the last few years. CBHI (2013) reports
that there is a prevalence of widespread shortage of doctors at all the levels of
health care system. Primary health centres (PHCs) facing the shortage is 34 per
cent while the shortage of specialist doctors at community health centres (CHCs)
is at the critical stage with 94 per cent. Largely, the health care infrastructure is
either not built or is in the decaying state. Basic infrastructure itself is absent in 21
per cent of sub-centres, 19 per cent of PHCs and 11 per cent of CHCs. Tribal areas
seem to be the most affected with the lack of personnel and basic infrastructure;
more than 70 per cent of X-Ray operators and 63 per cent of pharmacists are not
hired. Alongside, there is mass shortage of specialized doctors in these neglected
areas. Disarray status of existing health care system in Gujarat is evident and
somehow not surprising.
With a maternal mortality ratio (MMR5) of 122, Gujarat has outshined the
national average of 178, but falls well behind Kerala (66). Gujarat’s perfor-
mance is also nowhere near to its contemporary economies such as Maharashtra
(87) and Tamil Nadu (90). It can be said that Gujarat as a state has ignored
the significance of health care; public spending on health is just 3 per cent of
the total expenditure of the state. Its contemporary states such as Tamil Nadu
spent 4 per cent, Maharashtra 3.5 per cent of the total expenditure, being more
proactive. Even relatively backward states like Jharkhand (4.8 per cent) and
Rajasthan (4.5 per cent) are spending more on health care (India Census Vital
Statistics Division 2012).

Educational Performance
Educational indicators suggest that the progress of Gujarat with respect to the
literacy rate is lethargic; Kerala excels in providing education (particularly high
literacy rate) to its people. Historical indicators show that Kerala has always per-
formed on educational indicators and Gujarat has lagged behind (State Domestic
Products of India, 1960). However, Gujarat has shown sign of improvement in the
last decade. As per Census (2011), Kerala has been ranked as number one state in
the country with literacy rate of 96 per cent while Gujarat has also shown some
significant improvement with 87.2 per cent (table 4), performing better than the
average national literacy rate.
The existing literature shows that discussion on education is largely based on
data drawn from the NSSO’s 64th round (2009–10). Data suggests that Kerala
is a welfare-oriented state and Gujarat is keen on economic growth and encour-
agement to private entity. But ‘school management by government’ showcases
interesting picture, only 40 per cent of schools are management by the state
government in Kerala (rural and urban); but government agencies in Gujarat
manages 50 per cent of urban schools and more than 91 per cent of schools in
the rural area (NSSO 64th round). It suggests that Gujarat is working towards
enhancing its reputation as a welfare state. It is also visible in case of student’s
transition rate from primary to upper primary in Gujarat, which is at par with
Kerala. Indicators such as average number of instructional days and dropouts

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Parwez 119

Table 4. Comparative Status Based on Educational Status Indicators

Sl. Kerala Gujarat All India

No. Indicators Rural Urban Rural Urban Rural Urban
1 Literacy rate
92.9 98.1 73.0 87.6 67.8 84.1
(2011 census)*
2 Proportion of children
currently attending 98.5 99.7 79.9 88.2 88.2 92.3
school (aged 6–14 years)*
3 Schools by government
40.83 40.91 91.53 49.28 85.52 46.22
management (2007–08)**
4 Average expenditure
3,234 4,913 1,295 5,110 1,551 5,128
per student till 12th level**
Sources: *Census (2011) and **Education in India: 2007–2008: Participation and Expenditure—
NSSO 64th Round.

(Grade I–V) also reveal improved performance of Gujarat. Usually, an expected

gloomy depiction of educational status of Gujarat is expected. On the con-
trary, in case of school dropouts (Grade I–V), Gujarat showcases a brighter
picture with only 2.2 per cent against the 5.8 per cent of Kerala (Census, 2011).
Teacher–pupil ratio in Gujarat depicts not so brighter picture, particularly in
senior classes—at intermediate levels there are 52 students for every teacher
compared to the national average of 34 students per teacher.
In case of higher education, the provisional report (2011–12) of All India Survey
of Higher Education (AISHE) (Ministry of Human Resource Development 2013)
reveals that Gujarat appears to be sluggish with Gross Enrollment Ratio (GER)6
of 17.6, and it is significantly lower than the national average of 20.4 and substan-
tially below Kerala (23.1). Other developed states such as like Tamil Nadu (38.2)
and Maharashtra (27.4) have performed exceptionally.
As mentioned earlier in case of health status, same is true for the educational
environment in Gujarat. Possibly, the dismal performance of Gujarat in the educa-
tion sector is largely attributed to low public expenditure. Spending on education in
Gujarat is neglected to the extent of miniscule amount of `1,295 per capita against
the `3,234 per capita of Kerala (NSSO 64th round). Since 2001, Government of
Gujarat has only spent 13.2 per cent of the total public expenditure on education
compared to the national average of 14.8 per cent (table 4). Comparable states such
as Maharashtra (18 per cent) and Tamil Nadu (14 per cent) have invested more and
are performing better.
Based on various educational indicators, it is evident that Kerala is faring
much better than Gujarat and others states in the country. Some recent initiatives
of Government of Gujarat substantiate the fact that the state is striving towards
improvement in the overall educational environment.

Discussion
The prevailing interstate and rural–urban disparity in India even after several decades
of planning-based development efforts is distressing. The introduction of centralized
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120 International Journal of Rural Management 12(2)

planning after independence was supposed to help in achieving the objective of inclu-
sive development. Our analysis uncovered important aspects of regional and socio-
economic disparity by comparing two very different and important states.
Since the introduction of economic reforms, the states in India are making
concerted efforts to improve the socio-economic environment. States like Gujarat,
Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Rajasthan and
Madhya Pradesh have recorded higher economic growth rates post economic
reforms. States such as Assam, Odisha, Uttar Pradesh, Bihar and West Bengal have
witnessed sluggish rate of growth in pre-economic/post-economic reform period.
During the pre-liberalization period, states such as Punjab, Rajasthan, Haryana,
Delhi, Tamil Nadu, Andhra Pradesh, Orissa, Madhya Pradesh and Karnataka used
to be the catalyst of economy and employment creation (Dev 2008). While states
like Uttar Pradesh, Kerala, Assam, Bihar, Gujarat, Maharashtra and West Bengal
reported lower growth rates. Principally, states such as Tamil Nadu, Andhra
Pradesh, Punjab, Haryana, Rajasthan and Karnataka showcased significantly
improved performance with respect to growth in employment and productivity
before and after economic reforms; working as catalyst of economic development
(Bhanumurthy and Mitra 2004).
Southern states like Kerala, Andhra Pradesh, Tamil Nadu and Karnataka along
with western states such as Maharashtra and Gujarat are experiencing higher distri-
bution of wealth and other amenities (Kurian 2000). Among the cluster of southern
and western states, Kerala is considered to be economically underdeveloped but it
excels in social indicators while Gujarat being an economically developed state,
has been lackluster in that regard. There is visible prevalence of rural–urban divide
in Gujarat. These disparities are in particular evident in case of non-availability of
public health resources in rural areas, also attributed to income differentiation-led
utilization by local population, as wealthy people are consuming most of the exist-
ing health care facilities. Nevertheless, attaining equity for the citizens is a major
goal for states and hence considerable space for improvement remains.
Kerala has shown the way towards inclusive development through planning,
focusing heavily on public investment. It is evident that rural–urban inequality is
comparatively lower in Kerala. Over the years, Kerala has experienced a rural–
urban continuum rather than a divide. Political awareness and peoples’ participa-
tion has promoted further understanding and implementation of socio-economic
measures. The fact remains that initiatives taken by the state governments, regard-
less of the importance they are given, may not be able to take care of the issue
unless complemented by policies at the national level. It is evident that the condi-
tion in rural India is critical, in need of result-oriented long-term development
policies. Furthermore, urban advancement in an economy like India cannot be
ignored and private investments should be encouraged to create more jobs. The
focus has to be on the balanced development of both rural and urban areas other-
wise rural to urban migration will become unmanageable.
The government needs to implement a long-term course of action, not-
ing the necessities of the rural and urban regions. Rural areas possessed with
numerous resources remain unutilized due to lethargic approach of the state
and lack of public investments. It is high time that states need to recognize
and identify them.
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Parwez 121

Concluding Observation
This article examines the economic and social development by comparing two very
different and significant states of India in terms of their growth stories. It, therefore,
explores different approaches pursued by them towards socio-economic progress.
The theory suggests that economic development generally leads to social develop-
ment, which is proven to be incorrect in case of Gujarat. Kerala has however shown
that the implementation of social policies promotes human development and wide-
spread socio-economic security. Despite various interventions at the state level in
Gujarat, there is a lot left to be desired on the social and human development front.
Gujarat’s economic model provides an opportunity to understand the limits of
market-led growth and an insight into a policy regime that does not adequately miti-
gate existing inequalities. Kerala simultaneously needs to concentrate on revenue
generation through investments in industry and service sectors for its redistributive
efforts towards welfare of its citizens to continue.

Acknowledgements
I am grateful to Professor Mukul Kumar and reviewer of the journal for their
extremely useful suggestions and help for enhancing the standard of this article.
It has been prepared in good faith on the basis of information available at the date
of publication.

Notes
1. Externalities are a loss or gain in the welfare of one resulting from the activity of
another.
2. Gujarat and Kerala has been ranked 4th and 11th respectively among 33 Indian states
and union territories in GDP growth rate. Gujarat and Kerala contributes 7.31 per cent
and 3.78 per cent respectively of total India’s GDP. Maharashtra leads the pack and
contributes 14.42 per cent, followed by India’s most populated State Uttar Pradesh with
a share of 8.24 per cent. Tamil Nadu (8.16 per cent) is at 3rd, and West Bengal (6.75
per cent) is at 5th position for the year 2013–14.
3. Life expectancy is a statistical measure of how long a person may live, based on the
years of their birth, their current age and other demographic factors including gender.
4. The IMR is the number of deaths of infants under one year old per 1,000 live births.
5. MMR is the number of women dying from child birth-related causes per 10,000 live births.
6. GER is the proportion of 18- to 23-year-olds studying in higher education to their total
population.

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