Column: Gujarat Muslims: In a PC trap

Written by Surjit S Bhalla | Updated: Nov 2 2013, 09:33am hrs
The debate about Narendra Modis economic record has just gone international (perhaps even viral!). In an October 27 editorial, the prestigious newspaper, The New York Times, stated: His rise to power is deeply troubling to many Indians, especially the country's 138 million Muslims and its many other minorities His economic record in Gujarat is not entirely admirable, either. Candidate Modi has changed the contours, and style, of the (Presidential) debate in India. His in-your-face style has been enthusiastically joined by the other two aspirants for the PMs post: Rahul Gandhi of the Congress and Nitish Kumar of the JD(U). All three contenders have engaged in objectionable name calling and the debate is plumbing new lows. For example, Bihars Chief Minister, Nitish Kumar, recently likened Modi to Hitler. The hope remains that the debate will soon begin to focus on possibilities, policies and performance rather than venom and hatred and contempt.

As part of the discussion about performance, I have published two articles in The Financial Express (The Modi metric,; and Lessons to be learnt from Narendra Modi's Gujarat, on the economic fortunes of the disadvantaged in Gujarat and other states of India. The disadvantaged are defined as the dominantly poor of IndiaMuslims, scheduled castes (SC) and scheduled tribes (ST). The specific attention to Gujarat was motivated by the fact that the conventional wisdom has been that while Gujarat under Modi has been well known for its affinity with the corporate sector and strong GDP growth, it has not been known for inclusiveness of its growth, and particularly for inclusiveness of those whose religion is Islam.

In the first of the two articles I mentioned earlier, analysis of NSS surveys for FY00 and FY10 revealed that the Muslims in Gujarat had experienced very little decline in absolute poverty according to the Tendulkar definition (1.8 percentage points or ppt) in a decade of Modi rule. In contrast, the SCs and STs had shown a large 22 ppt decline over the same period. This singular omission from the growth process was dutifully reported by me, and most commentators applauded my professional dedication, and my conclusion.

In the second article, I repeated the exercise with the recently available FY12 NSS data and again dutifully reported the results. The latest data showed a large decline in poverty levels of Muslims in Gujarat, about 26 ppts in the space of just two years. If the FY12 results are true, then an entirely different conclusion about Modis governance is obtained. With the FY12 data, it appears that Gujarat under Modi has delivered on both growth and governance. However, it did not help that this result was reported in the middle of a heated election campaign. Thus, rather than accepting the new result with all the attendant implications, many have now questioned whether the FY12 data are accurate.

Note that all surveys emanate from the same statistical sourcethe NSSand should be treated the same. If the FY10 data was freely and willingly accepted and endorsed and welcomed especially by the politically correct (PC) class, why not the same acceptance for the FY12 data At the same time, I fully agree that the large decline in poverty shown between FY10 and FY12 is statistically suspect and deserving of further investigation.

So, what has really happened to Muslims in Gujarat under Modi Both FY10 and FY12 surveys cannot possibly be right. One of these surveys is an outlier.One possible explanation for the wide discrepancy is that of a small sample size of Muslims (around 350 sampled households only). The NSS surveys are not designed to capture the consumption behaviour of a subset of population and in Gujarat, Muslims constitute less than 10% of the population.

There are some tabulations that can help identify the outlier year. One can compare the percent of Muslims poor in Gujarat with the percent of Muslims poor in India for the longish time period 1983 to 2012. In five large sample NSS survey years since 1983 (there have been six), Gujarati Muslims have had a lower than average all India poverty and lower by about 9 percentage points. Except in FY10 when this fraction was higher for Gujarat by 2 percentage points! Second, as reported in my most recent article (and not mentioned by the PC sceptics) is the fact that almost every disadvantaged group in Gujarat reports near identical declines in the poverty rate between FY00 and FY12about 30 percentage points. Thus, it appears that several statistical criteria favour rejecting the estimate provided by the FY10 NSS data. In addition, note that the only reason there was a large sample survey in FY12 was because FY10 was considered untrustworthy by the government for two valid reasonsit was both a drought year and a global financial crisis year.

One final calculation remains. It is well recognised that reduction of poverty from 50 to 30 ppt is a lot easier than an equivalent 20 ppt reduction from 30 to 10 ppt. In other words, for assessment of poverty decline, the initial level of poverty matters. One method of evaluating poverty reduction is to look at the percent declines in the poverty ratio. The table reports such percentage declines for all states in India with Muslim populations of above-6% and for the period FY05 to FY12. This later time-period is chosen to make comparisons with Bihar possible (calculations for FY00 to FY12 yield the same qualitative results and rankings for Gujarat). For Muslims, Gujarat had the third-highest decline among 15 states in the country and for SCs and STs, the eighth-highest decline. For the disadvantaged groups together, Gujarats rank is 6th (not shown in the accompanying table) and 7th for the OBCs. Modis political, governance and growth comparator and competitor Nitish Kumar obtains the following disappointing rankings: 9th for both Muslims and SCs and STs, 11th for the disadvantaged and 10th for OBCs.

There are several other pieces of information that can, should, and will be examined in the future. The discussion about poverty decline is a humble start towards a more desirable debate about the economic governance of the different prime ministerial candidates.

The author is chairman, Oxus Investments, and a senior advisor to Zyfin, a leading financial information company. Twitter: @surjitbhalla