As Shri Narendra Modi administration assumes office in Delhi, we analyse the Gujarat model of doing business adopted by the state during his tenure as the Chief Minister. The main focus of our study was on three aspects: Gujarat’s (i) framework for land acquisition and allocation to the industry, (ii) strategy to develop Common Effluent Treatment Plants to support industrial development, especially SMEs, and (iii) efficient water management by river integration.
Land Acquisition: Gujarat has tackled several pain points the industry faces during land acquisition by minimising state clearances. The state’s land acquisition policy is market-price driven. It offers land parcels to the industry with verified computerized land records, applicable clearances, quality infrastructure, soft repayment options and an online application and tracking system
Development of Common effluent treatment plants (CETPs): Gujarat alone has c50% share of India’s total CETP capacity (1065 MLD). The state has been emphasising development of these facilities through allocating land for CETPs, providing environmental clearances, and financing 25-40% of capital costs (alongside 50% support from the central government).
Interlinking rivers: Around 71% of Gujarat is water scarce. Given the surface water availability issues, the state government has been focusing on channelling water from surplus regions to deficit areas and developing river linkage projects. Gujarat has successfully integrated 20 rivers with river Narmada, which has also benefitted the farmers in the state.
The state is one of the favoured destinations for industry. During FY2002-2012, the industrial production of the state grew at an annual average of 11.5%, versus India average of 8.2%. The state’s GDP (at constant prices) during the mentioned period grew at a CAGR of 13.3% (vs. India average of 10.3%), positioning Gujarat among the faster growing states.