Market-led Growth and Well-being - Gujarat, 1980-2005

An influential school in economic theory maintains that economic growth trickles down and automatically results in the distribution of its benefits across the population. This article examines this hypothesis in the context of Gujarat, one of the fastest growing states of India. Growth is based on industry and exports, mainly unhampered by labor unrest. However, the state has not made significant achievements in terms of well-being, especially in the rural areas. The article analyses levels of nutrition and rural poverty in the state, and finds a slowdown in these parameters. We contend that the neoliberal agenda of uncontrolled, outward-looking growth does not result in reduction of poverty or malnourishment. The policy implications are a need to promote the agricultural sector with a focus on resource-poor farmers and the re-institutionalization of an efficient system of food grain subsidization, which has been reduced in recent years.