Christophe Jaffrelot 
It has been in the news lately that Gujarati migrants make up a huge portion of those who have been deported by the Trump administration to India.
In fact, it is understood that Gujaratis are overrepresented among illegal Indian migrants in the US at large. In 2023, out of 67,391 Indian illegal migrants in the US, Gujaratis were 41,330.
The risks these migrants took were not small. In 2022, one Jagdish Patel, his wife and their two sons from the Dingucha village froze to death during a blizzard while attempting to cross the US-Canada border.
Illustration: Pariplab Chakraborty.
Gujaratis have been travelling to Africa and then, the West, for centuries, but not as illegal migrants. In the meantime, Gujarat has become a rich state – we are told that it is “a model” even. Then why are people leaving this way, and in such large numbers, the very Indian state which has one of the highest growth rates and the highest per capita net state domestic products – Rs 181,963 rupees in 2022-23, which was more than half the national average of Rs 99,404?
The explanation is rather simple: there are very rich people in Gujarat, but many more very poor people, because the state has not been creating good jobs for years.
The persistence of mass poverty
Not only did the growth rate of jobs not increase in proportion to the growth rate of the state GDP, but the quality of jobs did not improve either, as is evident from the informalisation process at work in the job market.
In 2022, according to the Periodic Labor Force Survey, 74% of the Gujarati workers had no written contract, against 41% in Karnataka, 53% in Tamil Nadu and Kerala, 57% in Madhya Pradesh, 64% in Haryana, 65% in Maharashtra and 68% in Bihar.
More importantly, this ‘casualisation of the workforce’ resulted in low wages. In April-June 2024, the average wage earnings per day from casual labour work for Gujarat was Rs 375, less than the national average, Rs. 433 and much less than in Kerala (Rs. 836), Tamil Nadu (Rs. 584), Haryana (Rs. 486), Punjab (Rs. 449), Karnataka (Rs. 447), Rajasthan (Rs. 442), Uttar Pradesh (Rs. 432) and even Bihar (Rs. 426). The only state where wages for the casual labour force lagged behind Gujarat was Chhattisgarh (Rs. 295).
Even average monthly earnings from regular salaried employment were much lower in Gujarat than elsewhere. In April-June 2024 it was Rs. 17,503, against Rs 21,103 as an average in India. Among the big states, only Punjab (Rs 16,161) lagged behind Gujarat. Karnataka (at Rs. 25,621), Haryana (at Rs. 25,015), Maharashtra (at Rs. 23,723), Kerala (at Rs. 22,287), Andhra Pradesh (at Rs. 21,459), Tamil Nadu (at Rs. 21,266), Uttar Pradesh (at Rs. 19,203), Rajasthan (at Rs. 19,105), Madhya Pradesh (at Rs. 18,918) and West Bengal (at Rs. 17,559) were all doing better.
Of course, those who migrated to the US are unlikely to have been salaried people. They most probably came from the villages of Gujarat where the condition of poor peasants is particularly bad.
In 2023, the average daily wage for agricultural workers, at Rs 242, was the lowest in India, and far behind that in Bihar, one of India’s poorest states. The daily wage for rural people not working in the fields (but as artisans, for example), at Rs 273, placed this state second-last, just ahead of Madhya Pradesh (Rs. 246) – and still far behind that of Bihar (Rs. 313). The daily wage for construction workers, at Rs 323, ranked Gujarat third to last, before Madhya Pradesh (Rs. 278) and Tripura (Rs. 286).
Wages are not the only indicators one must pay attention to for measuring poverty. The Monthly Per Capita Expenditures (MPCE) of the state’s rural and urban dwellers are very revealing too. According to the National Sample Survey Office, in 2022-23, Gujarat’s MPCE was at Rs. 6,621 in urban areas and Rs 3,798 in rural areas, far from what it was in Tamil Nadu (Rs 7,630 and Rs 5,310), Kerala (Rs. 7,078 and 5,924), Karnataka (Rs 7,666 and Rs. 4,397), Andhra Pradesh (Rs. 6,782 and Rs. 4,870) and even Haryana (Rs 7,911 and 4,859) as well as Maharashtra (Rs. 6,657 and Rs 4,010).
The Multidimensional Poverty Index (MPI), developed by the UN to measure poverty by taking into account not only standard of living, but also access to education and healthcare, is very useful here, as it goes beyond economic criteria. Gujarat, from this point of view, is in the middle of the table, with 11.66% poor in 2020-21, barely less than West Bengal (11.89 %), but more than Maharashtra, Karnataka, Haryana, Andhra Pradesh, Telangana, Himachal Pradesh, Punjab, Tamil Nadu, Jammu and Kashmir and Kerala (to mention only large states). Gujarat is particularly penalised by its poor score in terms of access to food: 38% of the state’s inhabitants reportedly do not have access to the food they need (compared with 42% in Bihar and 40% in Jharkhand – the other two states occupying the lowest ranks here).
How can we explain the absence of good jobs in the Indian state with the largest per capita net state capital product – and the correlative persistence of mass poverty that forces so many people to migrate to the West?
Few good jobs: a capital intensive, oligarchic political economy
The explanation of this paradoxical situation lies in the trajectory Gujarat started to follow under Narendra Modi. Between 2001 and 2014, the government gave priority to infrastructure projects (including ports, thermal plants and refineries) and petrochemicals industry at the expense, not only of social expenditures – including health and education – but also more labour-intensive activities.
This strategy contrasted with the kind of political economy Gujarat was known for till then. Indeed, the state has traditionally been a land of entrepreneurs where the state has assisted small and medium enterprises (SMEs) and where some positive discrimination was implemented for smaller-scale entrepreneurs. In the 1990s, the industrial policy of the state government of Gujarat still focused on SMEs which are four times more labour-intensive than big enterprises on average.
The 2003 industrial policy introduced by Narendra Modi broke away from this tradition, and the 2009 one even more. Small was not beautiful any more. The Gujarat Special Investment Region Act was passed in order ‘to come up with a legal framework to enable development of mega investment regions and industrial areas in the State’. Its ultimate aim was to create ‘global hubs of economic activity supported by world class infrastructure’. The Act was the mainstay of the 2009 Industrial Policy, which was explicitly designed for ‘making Gujarat the most attractive investment destination not only in India but also in the world’. It targeted not only ‘prestigious units’ (above Rs 3 billion, or $37.5 million), but ‘mega projects’, which denoted more than Rs 10 billion ($125 million) of project investment and direct employment of only 2,000 people – creating a ratio of Rs. 500,000 ($6,250) per job, a clear sign of capital intensity. To attract big companies, access to land was considered a key element in 2009. The Gujarat Industrial Development Corporation (GIDC) therefore started to acquire land to sell to industrialists, in some cases on a 99-year lease, or in Special Economic Zones.
The new industrial policy not only impacted the peasantry because of its provisions regarding land, it also affected the workforce. While, till the 1990s, it was mandatory for businesses benefiting from state subsidies or incentives in the context of some new investment to employ 100 permanent workers, ‘the condition of employing 100 permanent workers turned into 100 regular workers and then just 100 workers’ in the 2000s.
The new industrial policy of Gujarat benefited a handful of regional or national oligarchs whose firms were all highly capitalistic and not at all labour intensive. As a result, between 2009-10 and 2012-13, Gujarat was the state where investment in industry was the highest in India (above Maharashtra and Tamil Nadu). But this performance did not translate into job creation as much as in the states where enterprises tended to be smaller and (therefore) more labour-intensive. A comparison between Gujarat and Tamil Nadu is illuminating in this respect: in 2013, the Gujarat industrial sector represented 17.7% of India’s fixed capital and only 9.8% of factory jobs, whereas the industry of Tamil Nadu represented 9.8% of fixed capital but 16% of factory jobs.
It is not just that the big companies invested in activities which were not labour intensive, but they also contributed to the decline of the Gujarati SMEs which took part in their supply chain (big companies usually did not pay them on time) and which had to buy key components of their activities from them. Energy oligopolies, like the Adani Group, sold them electricity at a very high price, for instance. Between 2004 and 2014, 60,000 MSMEs shut down in Gujarat.
Incidentally, the Adani group, whose head, Gautam Adani epitomises today’s crony capitalism, with a total headcount of just 36,000, employs the fewest number of workers among the top six groups in India, which have at least 150,000 employees each.
Christophe Jaffrelot is research director at CERI-Sciences Po/CNRS, Professor of Politics and Sociology at King’s College London and Non-Resident Fellow at the Carnegie Endowment for International Peace. His publications include Modi’s India: Hindu Nationalism and the Rise of Ethnic Democracy, Princeton University Press, 2021, and Gujarat under Modi: Laboratory of Today’s India, Hurst, 2024, both of which are published in India by Westland.