A SILENT BREAK­THROUGH

India Today - - STATE OF THE STATE - By Ajit Kumar Jha

In the past decade, the state has be­come an ex­em­plar of fis­cal pru­dence and tar­geted spend­ing on in­fra­struc­ture and growth. But it needs to in­dus­tri­alise rapidly and im­prove agri­cul­tural pro­duc­tiv­ity to check migration out of the state and al­le­vi­ate poverty

Ety­mo­log­i­cally de­rived from the word ‘vi­hara’— the serene and tran­quil Bud­dhist monas­ter­ies—mod­ern Bi­har has, in a cruel irony, been as­so­ci­ated with vi­o­lence, law­less­ness, po­lit­i­cal an­ar­chy and eco­nomic stag­na­tion. The stereo­type is so tena­ciously em­bed­ded in the pub­lic imag­i­na­tion that the very men­tion of Bi­har brings to mind images of a po­lit­i­cal ‘jun­gle raj’ and an eco­nomic BIMAROU (the damn­ing acro­nym for Bi­har, Mad­hya Pradesh, Ra­jasthan, Odisha and Ut­tar Pradesh, re­fer­ring to their poor eco­nomic stand­ing).

The true pic­ture of Bi­har is quite the re­verse. There was in­deed a long pe­riod of de­cline af­ter In­de­pen­dence and, in the not so dis­tant past, a 15-year pe­riod of slump be­tween 1990 and 2005. But from 2004-05 to 2014-15, Bi­har emerged as the fastest grow­ing state in In­dia, clock­ing over 10 per cent an­nual growth for the past decade and, in the process, more than dou­bling its econ­omy. Ac­cord­ing to the Bi­har Eco­nomic Sur­vey, in 2016-17, the last year for which data is avail­able, the growth rate was 10.3 per cent, while the na­tional av­er­age was 7 per cent. In 2015-16, Bi­har’s growth rate was 7.5 per cent.

The state’s im­pres­sive growth can be at­trib­uted partly to the low base of the stag­nat­ing decade and partly the pos­i­tive ef­fect of a fairly rapid pe­riod of global growth (2003 to 2012). What’s re­mark­able is the rel­a­tive sus­tain­abil­ity of Bi­har’s dou­ble-digit growth for a decade even as its neigh­bour Ut­tar Pradesh gasped along at 6.6 per cent, with a com­par­a­tively low base dur­ing the same pe­riod. Odisha is a sim­i­lar story of rel­a­tively slower growth in the same pe­riod. This is a state with a 560 kilo­me­tre coast­line—a great lo­ca­tion trade-wise. Bi­har grew faster de­spite be­ing land­locked and less ex­posed to the global econ­omy, while Odisha’s growth was mod­est, by com­par­i­son. Also, Bi­har’s growth is way more ro­bust than of the other BIMAROU states.

A par­al­lel de­vel­op­ment is the phe­nom­e­nal growth in lit­er­acy in Bi­har, es­pe­cially since 2001. Be­tween 2001 and 2011, pushed largely by the Sarva Shik­sha Ab­hiyan and the ex­pan­sion of pri­vate schools, its lit­er­acy rate jumped from 47 per cent to al­most 64 per cent. This decadal in­crease is both a

ge­o­graph­i­cal and his­tor­i­cal record. The 17 per­cent­age point im­prove­ment in lit­er­acy is the high­est among all In­dian states for the decade. Again, the low base of Bi­har’s lit­er­acy might have con­trib­uted par­tially to it. Also, the state’s fe­male lit­er­acy rate surged 18 per­cent­age points as against In­dia’s av­er­age fe­male lit­er­acy rate in­crease of 11 per­cent­age points. Yet, the truth is that Bi­har has a lot of catch­ing up to do. In 2018, while Bi­har has a lit­er­acy rate of 64 per cent, the coun­try’s av­er­age is 74 per cent. Since the growth in lit­er­acy pre­dated the eco­nomic surge, the for­mer can be con­sid­ered as a cause for the lat­ter.

The growth driv­ers

Bi­har’s turn­around de­spite the poverty trap and the nu­mer­ous re­sul­tant chal­lenges has led to a se­ri­ous de­bate among econ­o­mists. The is­sue has been ex­am­ined from var­i­ous per­spec­tives. What trig­gered the struc­tural trans­for­ma­tion in such a poor econ­omy? Was it a mere regime change in 2005, from the Lalu Prasad Ya­dav-led Rashtriya Janata Dal

(RJD) to the Ni­tish Kumar-led Janata Dal-United (JD-U)? Or was it good gov­er­nance and the re-es­tab­lish­ment of law and or­der un­der the JD-U-led gov­ern­ment? What were the po­ten­tial driv­ers of such growth given the stag­na­tion in the past? Did fis­cal strength­en­ing and strate­gic tar­get­ing of pub­lic spend­ing lead to the growth spree? Has this struc­tural trans­for­ma­tion re­duced poverty? Is this dou­ble-digit growth sus­tain­able in the long run, and if so how?

In an ar­ti­cle, ‘Bi­har’s Growth: Learn­ing From Ex­pe­ri­ence’, economist Arvind Vir­mani fo­cuses on the sec­toral driv­ers of the state’s growth. Vir­mani com­pares two pe­ri­ods: 199394 to 2004-05, when In­dia’s eco­nomic growth av­er­aged 6.8 per cent per year, and 2004-05 to 2011-12, when the coun­try’s eco­nomic growth was 8.3 per cent an­nu­ally. Bi­har’s av­er­age growth in the ear­lier pe­riod was a mod­est 5.3 per cent per year, but in the later pe­riod, it ac­cel­er­ated to 11.7 per cent. The sec­ond pe­riod wit­nessed more than dou­ble growth than the ear­lier one.

The ac­cel­er­a­tion ap­pears even sharper if we take 2005-06 as the di­vid­ing year, when Chief Min­is­ter Ni­tish Kumar came to power. “From an av­er­age of 4.8 per cent per year be­tween 1993-94 and 2005-06 to 13.5 per cent per an­num from 2005-06 to 201112,” says Vir­mani. More­over, if we take the long-term trend from 2004-05 to 2014-15, the av­er­age an­nual growth rate re­mains in dou­ble dig­its, at 10 per cent, even by the most con­ser­va­tive es­ti­mates. Dis­ag­gre­gat­ing the over­all growth rate, which were the main con­tribut­ing

sec­tors? Six sec­tors ex­ceeded the av­er­age growth rate of 10 per cent. “These were com­mu­ni­ca­tion (27.5 per cent), con­struc­tion (21.8 per cent), bank­ing and in­sur­ance (19.4 per cent), min­ing and quar­ry­ing (14.1 per cent), reg­is­tered man­u­fac­tur­ing (13.1 per cent), and trade, ho­tels and restau­rants (12 per cent),” says Vir­mani.

The re-es­tab­lish­ment of law and or­der un­der Kumar has been the main trig­ger for growth as it kick-started sev­eral eco­nomic ac­tiv­i­ties. It checked the flight of the en­tre­pre­neur­ial class to neigh­bour­ing Chhattisgarh and Mad­hya Pradesh and even lured back some of Bi­har’s di­as­pora to rein­vest in the state all over again. This led to a sud­den gush in con­struc­tion ac­tiv­ity— both pub­lic and pri­vate—which be­came the sec­ond driver of growth. Land prices shot up along with the con­struc­tion of multi-storeyed build­ings, fly­overs and malls in ur­ban cen­tres, es­pe­cially Patna, Muzaf­farpur, Munger, Na­landa and Bha­galpur.

This was fol­lowed by rapid growth in the in­fra­struc­ture, en­ergy and com­mu­ni­ca­tion sec­tors. There was mas­sive pub­lic in­vest­ment in roads, both na­tional and state high­ways. Ru­ral and ur­ban net­works be­came the ar­ter­ies of com­mer­cial and eco­nomic ac­tiv­i­ties and growth. The spurt in the ser­vices sec­tor—bank­ing and in­sur­ance—be­came an im­por­tant driver of growth as did the hos­pi­tal­ity sec­tor—trade, ho­tels and restau­rants. The growth in min­ing and quar­ry­ing and reg­is­tered man­u­fac­tur­ing boosted in­dus­trial growth, though its share in the Gross State Do­mes­tic Prod­uct (GSDP) re­mained lower than the ser­vices sec­tor.

Real turn­around?

But what are the lim­i­ta­tions of such a sharp turn­around in the econ­omy? Economist Kaushik Basu points out that Bi­har’s high growth did not trans­late into sig­nif­i­cant re­duc­tion in poverty. “Be­tween 2004-05 and 2009-10, the per­cent­age of poor peo­ple in Bi­har hardly de­clined, as against the na­tional fig­ure,” says Basu. “The num­ber of poor in Bi­har has in­creased in the past five years. So the task ahead re­mains huge.”

How­ever, Oxford economist Sabina Alkire, who stud­ies Multi-di­men­sional Poverty In­dex (MPI) across var­i­ous coun­tries, dis­agrees. “Over half of the multi-di­men­sion­ally poor in In­dia live in the four poor­est states. Pock­ets of poverty are found across In­dia, but multi-di­men­sional poverty is par­tic­u­larly acute—and sig­nif­i­cant—in Bi­har, Jhark­hand, Ut­tar Pradesh and Mad­hya Pradesh,” says Alkire. “These ac­counted for 196 mil­lion MPI poor—more than half of all MPI poor in In­dia.”

Yet, there was progress. “Jhark­hand made the big­gest strides among all states in re­duc­ing multi-di­men­sional poverty, with Arunachal Pradesh, Bi­har, Chhattisgarh, and Na­ga­land only slightly be­hind,” says Alkire, who has stud­ied multi-di­men­sional poverty re­duc­tion be­tween 2005-06 and 2015-16 across In­dian states. It seems re­duc­tion of poverty through higher

growth rate is a lagged vari­able. It may not be vis­i­ble in a five-year pe­riod, but be­gins to have an ef­fect in an in­ter­val of 10 years or more. So while Basu does not find any cor­re­la­tion be­tween growth and re­duc­tion in poverty in five years, Alkire sees a cor­re­la­tion be­tween growth and re­duc­tion of multi-di­men­sional poverty in a 10-year pe­riod.

What other fac­tors could have led to Bi­har’s turn­around since 2005? Pro­fes­sor Sudipto Mun­dle, a for­mer 14th Fi­nance Com­mis­sion mem­ber, looks at the state’s growth from a pub­lic fi­nance per­spec­tive—the strate­gic tar­get­ing of pub­lic spend­ing to­wards de­vel­op­ment pro­grammes and fis­cal strength­en­ing. “An­other fac­tor that is driv­ing Bi­har’s strong de­vel­op­ment per­for­mance in re­cent years is the strength­en­ing of its fis­cal sit­u­a­tion,” says Mun­dle. “The emer­gence of a rev­enue sur­plus, the ris­ing share of cap­i­tal spend­ing and ris­ing de­vel­op­ment spend­ing are cen­tral to an ex­pla­na­tion of the re­mark­able turn­around in Bi­har’s de­vel­op­ment per­for­mance.”

Cap­i­tal ex­pen­di­ture is a ro­bust mea­sure of the em­pha­sis be­ing given to cap­i­tal in the pub­lic sec­tor. It pro­vides the fig­ure for ex­pen­di­ture on pub­lic goods, such as roads, telecom­mu­ni­ca­tions and power de­liv­ery sys­tems. De­vel­op­ment ex­pen­di­ture, which com­bines cap­i­tal ex­pen­di­ture and rev­enue, is a mea­sure of what the gov­ern­ment spends on all de­vel­op­ment ser­vices. In Bi­har, the share of cap­i­tal ex­pen­di­ture in to­tal gov­ern­ment spend­ing, which was a lowly 8 per cent in 2004-05, rose sharply to over 20 per cent by 200607 and sta­bilised around that level for the next decade, es­ti­mates Mun­dle. De­vel­op­ment spend­ing bot­tomed out to 39 per cent in 2003-04 and then rose steadily to 52 per cent by 2010-11, ac­cord­ing to him.

The en­tire in­crease in pub­lic spend­ing was by the Ni­tish Kumar gov­ern­ment gen­er­at­ing a rev­enue sur­plus and at the same time re­duc­ing the fis­cal deficit from 6 per cent dur­ing the RJD regime to 3 per cent, says Mun­dle. Fis­cal deficit was brought down af­ter the Bi­har gov­ern­ment en­acted the Fis­cal Re­spon­si­bil­ity and Bud­get Man­age­ment Act in 2006, com­mit­ting to elim­i­nat­ing rev­enue deficit by 2006-07.

The growth of rev­enue to GSDP ra­tio, which led to fis­cal con­sol­i­da­tion, is also at­trib­ut­able to a rise in cen­tral trans­fers, not sim­ply en­hance­ment of state rev­enues. Cen­tral trans­fers ac­count for 75 per cent of the Bi­har gov­ern­ment’s rev­enues. How­ever, the main com­po­nent of cen­tral trans­fers is the manda­tory trans­fer of Bi­har’s share of cen­tral taxes, as rec­om­mended by sev­eral fi­nance com­mis­sions. Poorer states like Bi­har are heav­ily re­liant on cen­tral trans­fers since their own pow­ers of tax­a­tion fall far short of their spend­ing re­spon­si­bil­i­ties on agri­cul­ture, pri­mary ed­u­ca­tion, health, law and or­der and other state sub­jects. The prin­ci­ple of eq­uity in a fed­eral fis­cal sys­tem re­quires that within a uni­fied na­tional ju­ris­dic­tion, cit­i­zens in all states should have ac­cess to the same level of pub­licly pro­vided ser­vices for the same tax price. Fi­nance com­mis­sions are able to only partly help in this since their awards only ac­count for one part of the cen­tral trans­fers. The D.R. Gadgil for­mula also only helped partly. Mun­dle says that for cen­tral schemes, the al­lo­ca­tion among states is purely ad hoc, not guided by any prin­ci­ple of in­ter­state eq­uity.

Bi­har is the worst vic­tim of this in­ad­e­quate fed­eral trans­fer sys­tem. Since Bi­har is the poor­est among the gen­eral cat­e­gory states, “it has the strong­est claim to be awarded a spe­cial as­sis­tance pack­age to com­pen­sate for its fis­cal dis­ad­van­tage”, adds Mun­dle.

Ac­cord­ing to pub­lic fi­nance ex­pert M. Govinda Rao, “Thanks to in­ad­e­quate cen­tral trans­fers to com­pen­sate Bi­har, its per capita de­vel­op­ment ex­pen­di­ture is the low­est among all gen­eral cat­e­gory states. It amounts to only about half the av­er­age per capita de­vel­op­ment spend­ing of all states, and a third of that in the high­est-spend­ing state.” Stuck with the low­est per capita in­come, Bi­har also has the low­est per capita spend­ing on ed­u­ca­tion, health, and eco­nomic and so­cial ser­vices. “The case for a spe­cial as­sis­tance pack­age for Bi­har is fur­ther re­in­forced by the fact that the trans­fer gap ex­ists de­spite a strong ef­fort at fis­cal con­sol­i­da­tion by the state gov­ern­ment,” ar­gues Rao.

De­spite a phe­nom­e­nal turn­around in the past decade, Bi­har re­mains largely poor. With 3 per cent of In­dia’s land mass and about 9 per cent of its pop­u­la­tion (104 mil­lion), it is the most densely pop­u­lated state. It has a pop­u­la­tion den­sity of 1,102 per­sons per square kilo­me­tre (2011 Cen­sus) as against

the all-In­dia fig­ure of 382. This high pop­u­la­tion growth in the state dur­ing the past few decades is con­cern­ing. The pop­u­la­tion growth rate over 2001-11, at 25 per cent, was much higher than the cor­re­spond­ing 17.6 per cent for In­dia.

More­over, with an ur­ban pop­u­la­tion of barely 11 per cent, Bi­har is the least ur­banised among the ma­jor states. Bi­har’s bi­fur­ca­tion in 2000 took away its en­tire in­dus­trial base into the mineral-laden, in­dus­tri­ally rich Jhark­hand. The bi­fur­ca­tion left Bi­har with just 54 per cent of the orig­i­nal un­di­vided area but 75 per cent of the pop­u­la­tion. This fur­ther in­creased pop­u­la­tion den­sity and de­mo­graphic pres­sure on nat­u­ral en­dow­ments. Most of the mineral-rich ar­eas, ac­count­ing for nearly 85 per cent of the known and cer­ti­fied de­posits in the re­gion, and a large part of the for­est re­sources, have gone to Jhark­hand. At the time of bi­fur­ca­tion, Bi­har was left with just 7 per cent for­est cover. Ad­di­tional chief sec­re­tary Tripu­rari Sha­ran says the for­est cover has now in­creased to 15 per cent.

Re­gional vari­a­tion and cul­tural di­ver­sity

Bi­har’s most im­por­tant nat­u­ral re­sources are fer­tile land, plenty of water and rich and di­verse flora and fauna. The en­tire state lies on the Gangetic Plain, with hills ris­ing above the gen­tle slope east­ward, north and south of the Ganga. The north is bet­ter wa­tered than the south, with rivers Kosi, Ka­mala and Gan­dak flow­ing down from the Hi­malayas, and inevitably more vul­ner­a­ble to flood­ing. The districts of Mad­hubani, Sheo­har, Su­paul, Sa­harsa, Mad­hep­ura and Araria form a mas­sive fun­nel be­tween the Ka­mala and Kosi and are peren­ni­ally flood-prone. These are also the poor­est districts and the main source of out-migration of labour.

The Ganga di­vides Bi­har into north and south. This nat­u­ral par­ti­tion is also the main eco­nomic di­vide in the state. The pros­per­ity of the south is in sharp con­trast to the penury of the north. The south is more ur­ban, with cities like Patna, Gaya, Munger and Bha­galpur. In the north, Muzaf­farpur, Ba­rauni and Be­gusarai are the com­pa­ra­ble cities. Other ur­ban cen­tres are more like towns with large pop­u­la­tions. Darb­hanga, which at one time boasted of the best med­i­cal school in the state, two top uni­ver­si­ties and an air­port, looks like a relic of its past. “There is a se­ri­ous at­tempt to re­con­struct the air­port and make it func­tional by 2019 in or­der to link north Bi­har di­rectly with Delhi, Kolkata and Mum­bai,” says San­jay Jha, a JD-U MLC. Air con­nec­tiv­ity is a trig­ger for de­vel­op­ment. For in­stance, Kis­hanganj in the north­east has be­gun to boom be­cause of its prox­im­ity to the Bag­do­gra air­port in West Ben­gal.

The north is more pop­u­lated and eco­nom­i­cally poorer, but cul­tur­ally richer. The Maithili-speak­ing Darb­hanga, Tirhut, Kosi, Purnea (also called Mithi­lan­chal and See­man­chal) and Bha­galpur di­vi­sions in the south have pow­er­ful tra­di­tions of paint­ing (Mad­hubani), mu­sic, ar­chi­tec­ture and sculp­ture. Bho­jpuri-speak­ing Saran has rich folk song and the­atre tra­di­tions sym­bol­ised by nau­tanki and Bhikhari Thakur’s Bidesiya. The state’s south­ern parts are more sparsely pop­u­lated and much more pros­per­ous, with canal ir­ri­gation in the south­west, and in­cludes the larger ur­ban cen­tres of Patna, Munger, Bi­har­sharif and Na­landa. Na­landa was the seat of the old­est univer­sity in In­dia, thriv­ing be­tween 500 CE and 1,200 CE. To­day, the re­vamped Na­landa Univer­sity is a global cen­tre of ex­cel­lence.

It is such re­gional and cul­tural di­ver­sity as well as eco­nomic dis­par­ity that the State of the State (SOTS) ex­er­cise aims to cap­ture through a com­par­a­tive study of the var­i­ous districts. With a firm be­lief that the fu­ture of the coun­try lies in its states, Union ter­ri­to­ries, the SOTS sur­vey, started in 2003, has emerged as the gold stan­dard for analysing the per­for­mance of states. The sur­vey analy­ses the per­for­mance of districts in each state over a pe­riod of time, and across var­i­ous cat­e­gories. Each cat­e­gory is usu­ally a com­pos­ite in­dex of a few pa­ram­e­ters, which are mea­sur­able across time, pro­vided data is avail­able. In the case of Bi­har, ide­ally one should com­pare all 38 districts. The ur­ban cen­tres have ad­van­tages over the far-flung ru­ral ar­eas. Yet, some of the emerg­ing ru­ral districts top­ping var­i­ous pa­ram­e­ters of de­vel­op­ment range from the north­west cor­ner, such as Kis­hanganj, or from the south­east, such as Ro­htas and Kaimur, or even from the poverty-stricken north—Darb­hanga, Mad­hubani and Sheo­har. More­over, Patna—the top dis­trict in pros­per­ity and over­all de­vel­op­ment—ac­counts for a large share of this growth.

Over-re­liance on agri­cul­ture

Agri­cul­ture con­tin­ues to be the main source of liveli­hood for the ma­jor­ity of peo­ple. It em­ploys 66 per cent of all work­ers and 75 per cent of all ru­ral work­ers, who are mostly small cul­ti­va­tors and agri­cul­tural labour­ers. Agri­cul­ture is dom­i­nated by small farms, with nearly 85 per cent of the farm­ers own­ing less than a hectare. The crop­ping pat­tern is also typ­i­cal of a sub­sis­tence econ­omy wherein food­grains cul­ti­va­tion oc­cupy 87 per cent of the to­tal cropped area, with rice and wheat ac­count­ing for 44 per cent and 26 per cent re­spec­tively. Fur­ther, this sub­sis­tence crop­ping pat­tern has shown rigid­ity over time. A com­par­i­son of Bi­har with the agri­cul­tur­ally ad­vanced

states—for in­stance, Mad­hya Pradesh— re­veals that de­spite its rel­a­tively favourable soil and cli­matic con­di­tions, most crop yields in Bi­har are low. The av­er­age pro­duc­tiv­ity of rice and wheat is 20-25 per cent lower than the na­tional av­er­age and less than half that of the best per­form­ers, such as Mad­hya Pradesh.

The back­ward­ness of Bi­har’s econ­omy in the past has been per­pet­u­ated be­cause of ex­tremely poor in­fra­struc­ture and low lev­els of in­vest­ment, along with poor gov­er­nance. The state was ex­tremely de­fi­cient in power. The Bi­har gov­ern­ment’s Har Ghar Bi­jli Yo­jana started in Novem­ber 2016 has al­most trans­formed the vil­lages.

Ear­lier, the per capita elec­tric­ity con­sump­tion was 112 per kilo­watt hour (kWh). To­day, it is 360 kWh. The num­bers look woe­ful com­pared to the na­tional av­er­age of 1,200 kWh. But the main rea­son for the low con­sump­tion of elec­tric­ity in Bi­har is the absence of se­ri­ous in­dus­tri­al­i­sa­tion in the state. In in­dus­tri­ally de­vel­oped states such as Ma­ha­rash­tra and Gu­jarat, 40 per cent of the con­sumers are high-ten­sion con­sumers, i.e. the in­dus­trial units. The peak de­mand grew two-and-a-half times in three years: from 1,800 MW in 2014 to 4,600 MW in 2017. The aim is to reach 6,000 MW by early 2019.

The Har Ghar Bi­jli Yo­jana is likely to im­pact agri­cul­tural pro­duc­tiv­ity. The con­struc­tion of ded­i­cated agri­cul­tural feed­ers—1,312 such feed­ers with plans for an­other 800 by the year-end—is likely to boost agri­cul­ture and help farm­ers save the money spent on diesel pumps. Like Gu­jarat and Mad­hya Pradesh, agri­cul­tural pro­duc­tiv­ity is likely to go up. As of to­day, the share of agri­cul­ture in elec­tric­ity con­sump­tion is 3-4 per cent. This is likely to jump to about 18-20 per cent.

New in­dus­trial pol­icy

Bi­har’s growth story is largely led by ser­vices and partly by agri­cul­ture. There has been a to­tal absence of any in­dus­trial sec­tor in Bi­har since its bi­fur­ca­tion and the en­tire mineral-rich Chota Nag­pur Plateau be­com­ing a part of Jhark­hand. For a while, con­struc­tion was the lone sec­tor in the name of in­dus­try. Later, food pro­cess­ing, man­u­fac­tur­ing, dairy and health­care were added to the list. Given their small base, the in­dus­trial growth rate picked up rather fast, but has a long way to go be­fore hav­ing any mea­sur­able im­pact on the state’s eco­nomic pro­file. The state has planned ini­tia­tives for the de­vel­op­ment of other sec­tors, such as agri­cul­tural im­ple­ments and small ma­chine man­u­fac­tur­ing, tourism, in­for­ma­tion tech­nol­ogy and re­new­able en­ergy.

Ad­dress­ing the ‘Bi­har IT and ITeS In­vest­ment Con­clave 2017’, Kumar had an­nounced, in the pres­ence of Union IT

min­is­ter Ravi Shankar Prasad, that 100 acres had been ear­marked for an IT city at Ra­j­gir near Na­landa Univer­sity. Land has been made avail­able for an IT park at Bi­hta in Patna dis­trict. In Patna city, land has been pro­vided for an IT tower. IT units with in­vest­ment be­low Rs 5 crore and with over 50 peo­ple en­gaged in core ac­tiv­i­ties were be­ing given spe­cial con­ces­sions if they fin­ished the in­vest­ment within three years. Kumar said there was tremen­dous scope for both the soft­ware and hard­ware sec­tors. In the state in­dus­trial pol­icy of 2016, pri­or­ity has been given to IT, food pro­cess­ing and ready­made gar­ments.

Bi­har per­forms poorly in so­cial and hu­man de­vel­op­ment in­di­ca­tors. In ed­u­ca­tion, al­though there has been con­sid­er­able im­prove­ment in en­rol­ment at the ele­men­tary level (about 83 per cent in 2006-07), the state is far be­hind the all-In­dia av­er­age for both boys and girls. Most wor­ry­ing is the high dropouts—70 per cent for classes 1 to VIII as against 43 per cent for In­dia as a whole. Health in­di­ca­tors show Bi­har ahead of most BIMAROU states, but be­low the na­tional av­er­age. Life ex­pectancy, at 68.1 (2014 fig­ures), is slightly higher than the all-In­dia av­er­age of 67.9, but much lower than Kerala (74.9). Ma­ter­nal mor­tal­ity (165 per 100,000 live births) is the low­est among BIMAROU states, but higher than the all-In­dia fig­ure of 130. In­fant mor­tal­ity, at 38 per 1,000 births (2016 fig­ures), is higher than the all-In­dia av­er­age of 34, but the low­est among BIMAROU states, bar­ring Jhark­hand.

The way for­ward

The Jayaprakash Narayan-led to­tal rev­o­lu­tion in Bi­har in 1974, which un­seated the Indira Gandhi-led Congress regime af­ter the end of Emer­gency in 1977, pro­duced two mass lead­ers: Lalu Prasad and Ni­tish Kumar. Both were stu­dents of Patna Univer­sity at the same time, one study­ing law and the other engineering. Both were JP’s fol­low­ers, trained in the so­cial­ist tra­di­tion. Both are charis­matic OBC lead­ers who trans­formed the face of Bi­har’s po­lit­i­cal so­ci­ol­ogy. Yet there is a dif­fer­ence. While Lalu shifted the ful­crum of Bi­har pol­i­tics from an up­per-caste, up­per­class so­cial base to what is known as the Mus­lim-Ya­dav (MY) com­bi­na­tion, with the sup­port of some Dalit groups, he did lit­tle to change their eco­nomic for­tunes de­spite rul­ing the state for 15 years, first di­rectly and later through wife Rabri Devi. To many, the mak­ing of Lalu Prasad was the un­mak­ing of Bi­har—the state slid­ing into eco­nomic stag­na­tion, po­lit­i­cal an­ar­chy and law­less­ness. Ly­dia Pol­green put it rather pithily in an ar­ti­cle in The New York Times: “For decades, the sprawl­ing state of Bi­har, flat and scorch­ing as a grid­dle, was some­thing be­tween a punch line and a cau­tion­ary tale, the ex­act op­po­site of the high-tech, rapidly grow­ing, ris­ing global power In­dia has sought to be­come.”

Kumar’s JD-U re­placed the RJD in 2005 in al­liance with the BJP. In the past 13 years, which wit­nessed some som­er­saults by him in­volv­ing an al­liance be­tween the two arch-ri­vals for three years and then Kumar’s re­align­ment with the BJP, the eco­nomic trans­for­ma­tion of the state has be­gun in right earnest. With dou­ble-digit growth, fis­cal pru­dence, tar­geted de­vel­op­ment of in­fra­struc­ture, mas­sive scale of elec­tri­fi­ca­tion of vil­lages, bring­ing girl stu­dents back to schools and women’s em­pow­er­ment and some sem­blance of good gov­er­nance, Bi­har has be­gun a new chap­ter of de­vel­op­ment.

How­ever, dou­ble-digit an­nual eco­nomic growth, largely led by the ser­vices sec­tor, is very dif­fi­cult to sus­tain

in the long run. Al­though agri­cul­ture has shown some growth re­cently, in the form of hor­ti­cul­ture and food pro­cess­ing, agri­cul­tural pro­duc­tiv­ity in Bi­har is still fairly low as against Mad­hya Pradesh and Chhattisgarh. Bi­har needs to change its strat­egy of growth and be­gin fo­cus­ing on agri­cul­ture, by pre­vent­ing an­nual floods in the north and an­nual drought in the south. The Ganga run­ning through the en­tire state is a boon, though mas­sive silt­ing and pol­lu­tion have been a con­stant prob­lem.

Ef­fec­tive water man­age­ment via small dams and mas­sive in­vest­ment in canals, tanks, ponds and other forms of ir­ri­gation can change the face of Bi­har’s agri­cul­ture, given its fer­tile al­lu­vial soil and abun­dance of water. Agri­cul­tural fail­ure and lack of jobs for the youth have been the main cause of end­less out-migration from Bi­har to the south­ern and western states and over­seas. How­ever, fo­cus on women’s em­pow­er­ment through ini­tia­tives such as quota in pan­chayat polls, Jee­vika pro­gramme for women and free bi­cy­cles to girls have be­gun to change the ham­lets.

Bi­har’s en­tire growth is ser­vices-led, with some con­tri­bu­tion by agri­cul­ture. The miss­ing link is the lack of in­dus­tri­al­i­sa­tion. Some ini­tia­tives have been taken in de­vel­op­ing an IT strat­egy, but with­out its rich min­er­als, Bi­har seems to con­found pol­icy-mak­ers. They are at a loss when it comes to de­vel­op­ing an in­dus­trial vision and strat­egy. The in­dus­trial pol­icy of 2016 by the NDA gov­ern­ment has given pri­or­ity to IT, food pro­cess­ing and ready­made gar­ments. But Bengaluru and Hyderabad did not be­come In­dia’s Sil­i­con Val­ley overnight. Bi­har’s pol­icy-mak­ers need to fo­cus on a qual­ity ed­u­ca­tion pol­icy to pro­duce bril­liant soft­ware en­gi­neers and cut­ting edge startup en­trepreneurs.

What Bi­har to­day needs is a new vision for the next 15 years, and for that a new strate­gic think­ing needs to be in­tro­duced. A com­pletely new fo­cus on in­dus­trial and agri­cul­tural growth linked with the global mar­kets and with greater em­pha­sis on ex­ports is the only way ahead, like those fol­lowed by Gu­jarat, Ma­ha­rash­tra, Mad­hya Pradesh and Chhattisgarh. Cre­ation of jobs must be the top pri­or­ity, for which the em­pha­sis should be on the pri­mary and se­condary sec­tors, less on the ter­tiary. The new fo­cus of ed­u­ca­tion in Bi­har must be on qual­ity and not on mere quan­tity. Some well-mean­ing crit­ics of Chief Min­is­ter Kumar point out that dur­ing his last term, he has been pre­oc­cu­pied with pol­i­tics and the sur­vival of his gov­ern­ment, in­stead of a sin­gle-minded com­mit­ment to de­vel­op­ment and growth, which he dis­played dur­ing his first term. With Lok Sabha elec­tion next year and an as­sem­bly poll in 2020, pol­i­tics will con­tinue to weigh much more than eco­nom­ics, elec­tions much more than de­vel­op­ment. As a re­sult, Bi­har’s growth rate, the crit­ics point out, is bound to slow down un­less a qual­i­ta­tive leap is at­tempted, along with a new growth strat­egy and re­newed fo­cus on tech­nol­ogy, qual­ity ed­u­ca­tion, job cre­ation, cleaner in­dus­trial rev­o­lu­tion and a greener agri­cul­tural trans­for­ma­tion. Bi­har needs to catch up not only with the rest of In­dia, but be­come the leader in the newer sec­tors of growth and de­vel­op­ment.

Per­haps a start can be made by at­tract­ing the Bi­hari di­as­pora, which has ei­ther shifted to other parts of In­dia or over­seas. But for that Bi­har needs world-class in­fra­struc­ture, top qual­ity ed­u­ca­tional in­sti­tu­tions and a good health­care sys­tem. Amartya Sen, in his ar­ti­cle ‘Bi­har: Past, Present and Fu­ture’, points out how Patal­ipu­tra dur­ing the Mau­ryan em­pire had world-class ed­u­ca­tional in­sti­tu­tions, cut­ting-edge math­e­ma­ti­cians, a trail­blaz­ing sys­tem of free and qual­ity pub­lic health­care, rule of law, good in­fra­struc­ture and re­sis­tance to caste in­equal­ity. “What we learn from these early achieve­ments of Bi­har helps us ad­dress and conquer the per­sis­tent disad­van­tages that are re­strain­ing Bi­har in the con­tem­po­rary world. We can­not busy our­selves in the past, but the past of this ex­cep­tional re­gion of In­dia of­fers both inspiration and guid­ance,” Sen con­cluded. Wis­dom for the state if it in­tends to not only catch up but forge ahead as a lead­ing state of In­dia.

The Bi­har Mu­seum in Patna

Bi­har Chief Min­is­ter Ni­tish Kumar

ALAMY

An aerial view of Bis­co­maun Bhawan and Gandhi Maidan, Patna

AFP

Vishwa Shanti Stupa, Ra­j­gir

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