What is the Gujarat Model? | Modi as a chief minister for Gujarat

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This is the common statement that arises when any election comes to Gujarat. Not only for Gujarat but these days it is also circulating in other states as well to show Modi’s supremacy and his rich political portfolio. 

Before we discuss Modi’s Administration, let us see how BJP got its first entry into Gujarat by making its Government.

The first time BJP came to power in Gujarat was in 1995 by the then MLA of Visavadar Mr. Kesubhai Patel Maurya when he was sworn in as the Chief Minister of Gujarat. But he was there in the chief minister’s chair for about 224 days which means less than a year.

A revolt among his colleagues forced him to resign as Chief Minister. The position was later taken over by cabinet minister Suresh Mehta of the then government and he served for less than a year. Then comes the actual twist. A party member named Shankarshih Vagehla revolted against the party and formed the Rashtriya Janata party, where he was Chief Minister for almost one year. Again Kesubhai Patel comes into the screen where he was been in Chief ministership until Modi comes in

Modi’s entry

Narendra Modi became chief minister in 2001 by overthrowing Kesubhai Patel and continued till 2014. He was there in the Gujarat government for 12 years. This is the 12 years that shaped Gujarat as a Gujarat model and became a role model for the other states in India.

But what is the Gujarat model and why it became a popular term in India?

Well, I don’t want to make this entire blog politically related. I will confine to only developments that happened in Modi’s era.

  1. Infrastructure Development and Ease of Doing Business
  2. Subsidies to corporates
  3. Agriculture
  4. SEZs and clusters
  5. Schemes

1) Infrastructure development and Ease of doing business

After taking over Gujarat, Modi prioritized building sufficient infrastructure, including roads and electricity that was available 24 hours a day. The state industrial growth jumped to 12.65% during 2005-2009 compared to 3.95% in the period 2001-2004 the initial time when Modi took over. A merit-based package of assistance to companies for investing with at least 5000 crores was initiated. Gujrat is a coastal state which has a coastline of 1600 kilometers.

Collectively 30%of India’s exports are from Gujarat.

Ease of access to clear an application for setting up a production plant.

Gujarat has the second-highest ports in India with 40 just below the Maharastra (53).

Mundra port is the largest privately owned port located in Gujarat.

2) Subsidies to corporates

  1. Subsidies to corporates and ease of doing business 

During Modi’s regime, huge subsidies were given to corporates on service tax. 

For example – 

If a company wants to establish its plant in India then its looks for a state where it gets the lowest price of Land, the Best infrastructure, and the lowest tax collection. After all, it is a company right at the end of the day it needs to make a profit.

Let us look at those subsidies 

  1. The Land has been subsidized. The rule is such that 75% of the first 200 acres of land is subsidized for setting up a semiconductor plant. In some cases, 1rupee for 1 acre of land had been sold for companies. 
  2. Tata motors have gotten a 500-core soft loan at the rate of 0.1%interest rate just to shift their manufacturing plant from West Bengal to Gujarat in 2008.
  3. A total of 50 thousand crores were subsidized.

3) Agriculture

Agriculture has witnessed tremendous growth in Modi’s administration in Gujarat. Thanks to the Jyotiram scheme which provides 8 hours of continuous electric current supply for irrigation for all 18000 villages and 24*7 domestic house power supply. Between 2001 and 2010, there was a growth rate of 10.97%.

By adopting the latest technology, farmers have grown Genetically modified cotton(BT cotton)

Cultivated check dams and water tanks for a seamless supply of water. And Gujarat is the only state where groundwater levels are raised in that period.

4) SEZs and Ports

SEZs (Special economic zones) are present in Gujarat covering an area of approx 27,125 hectares.

Gujarat has three operational SEZ

  • Kandala
  • Sur
  • Surat

From all the sectors Gujarat has 56 SEZs

Gujarat has 40 private ports that can handle 80% of the cargo in all private ports in India.

Manufacturing of textiles and vegetable oils has a sizable portion of Gujarat’s industrial production.

Some of the major brands that evolved are

1) Amul

2) Nirma

3) Parle

4) Wipro

5) Reliance

6) Godrej

7) Marico

8) Ajanta

9) Tata

10) Biocon

and many more…

5) Schemes

Modi launched numerous schemes while he was ruling Gujarat from 2001 to 2014. Some of the schemes are

Krishi Mahotsav

Krishi Mahotsav is a festival where scientists, doctors, and other top-level government officials go to villages for educating farmers on drip education, soil testing, rainwater harvesting, and new farm technologies.

Kanya Kelavani

Encouraging girl children for enrollment in schools.

Sagarakhedu Yojana

A unique twelve-point flagship program amounting to Rs. 11,000 crores for Eleventh Five Year Plan focuses attention in an integrated manner on the Developmental issues of 60 lakh population living in 3000 Villages of 38 coastal Talukas in 13 Districts. This program addresses special problems to improve the quality of life and HDI in coastal areas, especially the fisherman population.

Vanabandhu Kalyan yojana

The Government of India, Ministry of Tribal Affairs has launched the Vanbandhu Kalyan Yojana (VKY) for the welfare of Tribals. VKY aims to create enabling environment for the need-based and outcome-oriented holistic development of the tribal people.

Chiranjeevi Yojana

The Chiranjeevi Scheme was launched as a one-year pilot project in December 2005 in five backward districts: Banaskantha, Dahod, Kutch, Panchmahals, and Sabarkantha. Health insurance coverage is provided to all families below the poverty line, SECC categories, and NFSA. Beneficiaries of Ayushman Bharat Mahatma Gandhi Rajasthan Swasthya Bima Yojana are also eligible to get the scheme. Chiranjeevi yojana has benefitted lakhs of rural people.

Jtotigram Yojana

Jyotigram Yojana is an initiative of the Government of Gujarat, India, to ensure that a 24-hour, three-phase quality power supply is available to rural areas of the state and supply power to farmers residing in scattered farmhouses through feeder lines with specially designed transformers in Gujarat.

Additional information

Gujarat’s GSDP ratio is at 19%

The interest payments to revenue receipts ratio are at 14.2%

In eight years from 2011-12 to 2019-20, an average Gujarati saw his/her income double.







The Dark Side of the Gujarat model (Upcoming)


Varun is a stock market enthusiast and passionate writer. He has 2+ years of experience in writing about stock market and personal finance.