In the Professor P.R.

Brahmananda Memorial Lecture at the Indian Economic Conference, Raipur on

28th December 2019, Prof Ravindra H. Dholakia focused on achieving economic progress with a
proper definition which would be the most desirable goal in any democratic society. He said the
recent debate on a strategy to achieve the best outcome of state-level economic progress has produced
some light but mostly heat. The development strategy adopted in Gujarat and Kerala and the
outcomes obtained are often compared and contrasted in order to learn valuable lessons in fiscal
federalism for state-level policies. The debate would, in his view, be better informed particularly for
institutions such as the Finance Commission if the experience of different state economies is
evaluated more comprehensively within a fair and broader concept of economic progress.

He proposed firstly to consider a proper and broad definition of economic progress and then to
examine the case of the state of Gujarat within such a framework comparing with All India as a unit
and in some cases with Kerala. The main motive is to arrive at a meaningful hypothesis that can be
tested later on with other states ' experiences and then use it to decide on an optimum development
strategy and fund devolution.

His present research paper attemts to examine the economic progress made by Gujarat in all its three
connotations – volume, efficiency and welfare, considering such additional aspects that are generally
not covered in the state level studies. At the end of the study, it is expected to emerge with a
hypothesis about development strategy for a comprehensive growth experience at the state level.

Five distinct growth phases are identified in Gujarat by endogenously determined break-points in the
time series of real GSDP. These are: 1960-61 to 1971-72; 1971-72 to 1984-85; 1984-85 to 1999-00;
1999-00 to 2011-12; and 2011-12 to 2017-18. While Gujarat performed better than the nation in all
the five phases, it is only since the third phase that its ATRG crossed 6% threshold; and thereafter, it
has further accelerated.

The aspect of efficiency is captured by the structural changes taking place in the state economy,
measured by shares in total output by: I sectors; (ii) urban-rural areas; and (iii) domestic-to-external
demand production. The structural changes in all these three output shares are consistent with
improved resource utilization efficiency in the state.

The case of Gujarat examined in this paper with estimates of some of these exclusive criteria shows
that consistently high productivity performance in terms of high growth of real GSDP originating
within the state would lead to better performance in terms of efficiency as well as welfare aspects of
economic progress over the longer period.

However, if a state has done well on a few indicators of the social sector relating to education and
health, as in the case of Kerala, it is not necessary to start performing better even in the long run on
the multifarious welfare dimensions of economic progress.