Growth and Structural Change in the Economy of Gujarat, 1970-2000

Gujarat appears to be a paradigmatic example of the most disconcerting developments of the 1990s in India. There was no increase in organised sector employment during the 1990s. The primary sector, particularly agriculture, has been stagnant or even declining. By contrast, the secondary and tertiary sectors have shown statistically significant and high rates of growth over the whole period. But the factory sector in Gujarat has undergone a higher degree of concentration than in the rest of India. More importantly, the capital-intensive nature of the growth in the factory sector has been even more pronounced in Gujarat. Looking at the sectoral growth rates, it seems that the economy of Gujarat grew in an unbalanced and volatile fashion over the period under consideration. There has been a significant transformation in occupational structure. But that transformation is out of step with the change in incomes derived from different sectors. A mismatch in the movement of income and employment shares is stronger in Gujarat than the rest of India. Further, the people living in rural Gujarat have become significantly proletarianised.