This was published in Economic Times, Western India Editions, sometime in October 2008. 

 

Western India is leading India’s economic revolution.  Maharashtra and Gujarat together are India’s manufacturing powerhouses, but that does not take away from the impressive achievements of Goa, Dadra and Nagar Haveli, and Daman and Diu in the post reform years.  This region is not known for its natural resources as eastern India is, neither does it have population concentrations as high as in the north, nor does it have high human development indicators as in the south.  Despite that it has some of the highest investment levels – both private as well as public.  What accounts for this rapid growth?  The answer is a combination of location, history, circumstances, and arguably the most important – initiative. 

 

My colleagues at Indicus Analytics and I have been following the growth of more than a 100 major cities in India for almost a decade now.  At the time of independence, amongst the major cities of India, only Mumbai counted among the major metros in Western India.  As the City Skyline of India Data shows, today, Mumbai has been joined by Ahmedabad and Pune as large metros and important commercial and industrial centers of Asia.  And we are now seeing the rapid growth of a whole group of cities in Western India that will be among the largest manufacturing and service centres of this continent. 

 

Take this example.  What seemed like a momentary spurt in the early 2000s is now more or less confirmed - Surat is the most rapidly and consistently growing large city in the whole country.  What was once a small commercial town has already entered the ranks of the top 10 urban economies in India. At the rate it is growing, it would surpass many of the larger cities in the next decade, as Bombay had surpassed Kolkata in the nineteen sixties.  The world might today talk about Bangalore, or Gurgaon or Tirupur, but the real wonder of post reform India is actually Surat. 

 

Take another example.  Pune.  What was once a sleepy city with a few good educational aned cultural institutions, first became a minor automobile manufacturing centre, evolved into a major professional educational centre, and today is the place where the best engineering companies in the world would want to have production centres.  Yes Pune is a now a major metro, with one of the highest levels of in-migration from all parts of the country.

 

In a sense, Pune and Surat’s story provides vital clues to why the west continues to be the economic powerhouse of India.  First, there is a long history of international trade and commerce.  Economic reforms have more than proved that India’s future lies in both selling to and buying from international markets. And past experience in international commerce helped this region in making full use of the opportunities that reforms opened up for everyone in the country.

 

Second, is the proximity to the sea and major ports.  By my estimate proximity to the sea pushes up economic growth by about two percentage points annually.  Of course there are many other states that are on the sea and have ports – Orissa is one such example.  But only states that are able to improve their port infrastructure, and build appropriate connecting means with the major production and consumption centres, can benefit from this proximity.  And here western India far surpasses both the south and the east. 

 

Third, higher education and learning.  Kolkata was for many decades the intellectual, commercial and cultural capital of India.  But at some point, its predominance as an educational centre faded, and slowly and steadily everything else also lost its unassailable position.  No region can grow without higher learning, and Western India boasts of the finest professional education institutions in the country, and they are not only in one state, but are spread everywhere in the region.

 

Fourth, western India boasts of relatively better governance levels than the rest of the country.  True, it not at the forefront of all the regions of the country - Law and order measures tend to be considerably higher in many states both in the south and the north.  However, in the aggregate, western India tends to perform much better than either the north or the east. 

 

Fifth, governance also involves relatively efficient state government machinery.  And it is here that the west scores quite well.  Generally bureaucracy functions better here than in other states of the country, and is quicker to respond to changing conditions and requirements.

 

But by far the most important factor in long term progress is sustained effort.  Every once in a while we have a state government in some part of the country that performs very well.  But rarely is that sustained, as in western India.  Successive governments, from different political conglomerations have put in effort to build their states, and not only looked at short term political pay-offs.  That is precisely the reason why Gujarat has been one of the most rapidly growing states in the country both in the 1990s and 2000s.  And that is why, despite being a highly heterogeneous state with highly diverse requirements, Maharashtra continues to remain among the states with the best infrastructure.  And the same holds for Goa, Daman and Diu and Dadra and Nagar Haveli.

 

This is of course not to say that there are no challenges.  With high growth, there are requirements for greater human inputs.  This has resulted in the west having some of the highest in-migration levels in India.  (Western cities such as Pune and Surat have had the highest in-migration levels in the 1990s, other stellar migrant attractors were Delhi and Coimbatore).  But it is also well known that the success story of regions and large cities is always built on the efforts of the migrant.  Kolkata in the pre-independence days, Mumbai later, Delhi since the nineteen fifties, Bangalore since the nineteen eighties, are all well known examples of in-migration and local conditions complementing each other for the betterment of all. 

Last 5 posts by Laveesh Bhandari

• Irrelevance of the State and Naxalites - September 25th, 2009
• Handling Naxalites - August 8th, 2009
• Trust and economic foundations of peaceful progress - August 8th, 2009
• What education? - August 7th, 2009
• Need for introspection - August 7th, 2009

Tags: growth, Western Cities, Western India

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