Bihar’s growth is derived from an infrastructure push and social change

Narendra Modi and Nitish Kumar are not just political foes. They also preside over two rival and disparate growth models in their respective states. There is a common thread, though, between the two warring politicians: good governance; but that is where the commonality ends. On the one hand, Modi has relied on a private sector-driven model that has made it easy for industries to find land and begin operations; and development is seen as a trickle-down effect of this process. On the other, the Bihar model works through direct government intervention, and development is defined both in terms of growth of infrastructure as well as social change.

Bihar’s inclusive double-digit growth has found resonance in the most unexpected of quarters. The World Bank, appreciating the state’s progress report, recently said it is considering doubling its soft loan to $1 billion. Onno Ruhl, World Bank country director, summed up the Bihar case succinctly when he said Kumar had made “human resources development his key priority along with law and order and infrastructure”.

In July, the state drew praise from Unicef. “Bihar is becoming polio-free, which is appreciable. The vaccination rate is higher than the national average, which is praiseworthy,” said Louis-Georges Arsenault, Unicef India head.

Double-Digit Growth
Growth figures for Bihar are reflective of the all-round optimism about the state’s performance. Despite a global slowdown and sagging domestic demand that saw the country’s gross domestic product (GDP) growth rate plunge to 5 per cent for 2012-13, Planning Commission data showed Bihar bucking the trend and posted a robust 9.48 per cent growth. “Bihar’s state gross domestic product (SGDP) is not only higher than the previous year, but we also expect it to be the highest among all states,” says Vijay Prakash, the state’s planning and development department secretary.

The sterling performance was scored on the back of a sharp increase in public and government expenditure that rose 22.6 per cent in 2012-13, and a spike in construction, communication, trade, transportation, banking and insurance sectors. Construction did particularly well, posting a 21 per cent growth, with the private sector taking the lead.

This is not a one-off. In 2011-12, Bihar posted a growth rate of 13.26 per cent and won plaudits for being the fastest growing state; for the 11th Five-year Plan period (2007-12), it grew at a stunning 11.95 per cent.

There is no doubt that the change in Bihar’s fortunes came with the election of Kumar, of the Janata Dal (United), as chief minister in 2005. He ushered in a regime committed to good governance and a vision of inclusive growth. In comparison, the earlier two decades were a period of stagnation. During 1980-90, the state grew at 4.66 per cent; over the next decade (1991-99), the SGDP growth fell to a miserable 2.88 per cent.

These figures are significant when comparing the models of Bihar and Gujarat. When Modi took over as Gujarat’s CM in 2001, the state was already on a strong growth trajectory. During 1991-1999, Gujarat recorded the highest growth rate in India, at 8.15 per cent. The poor had fallen to just 14 per cent, against 24.2 per cent in the previous decade. In comparison, Bihar had over 42 per cent of its population living in poverty in the 1990s. Also, in 1995-96, the private sector was non-existent in Bihar, with private projects contributing just 2.7 per cent to the SGDP, as opposed to 57.7 per cent in Gujarat.

Earlier this year, Avantika Bhuyan, member secretary of the Asian Development Research Institute (ADRI), put the difference between Gujarat and Bihar in a national daily thus: “It’s difficult to call development in Gujarat the ‘Narendra Modi Model’, as the spectacular economic growth can’t be attributed to an individual. Unlike other states, Gujarat has had a proper social construct and a succession of leaders who created its growth trajectory. Modi is not the initiator of the growth model. In contrast, Nitish Kumar is a stand-alone example in Bihar, who has pursued the development agenda for the first time. Unlike Modi, Kumar had to travel a long way.”

Social Change
Bihar has scored not just on economic statistics. There has also been a consistent effort to attack poverty and bring about social change. Recent data shows that Bihar, along with Orissa, has had the best positive change in below poverty line (BPL) numbers. They fell from 54.4 per cent in 2004-05 to 33.7 per cent in 2011-12. While still high, they’ve seen a significant 20 per cent drop.

The state is also a success story in terms of the health and education sectors. Though it’s at the bottom with 63.8 per cent literacy, it has managed to increase the number of male literates by 16.8 per cent and female literates by 20 per cent. In The New Bihar, author Rukmini Banerjee notes that the state has applied several unconventional ways to make schooling more accessible to rural kids. This includes providing free cycles for girls, improving the quality of teachers via new training centres, and a revamped teacher-training curriculum. For students, state-wide summer camps are organised to address problems such as lack of basic reading skills and a poor grasp of arithmetic.

As many commentators have noted, CMs have enormous power and flexibility. If the man at the helm in the state — in this case, Kumar — is serious about development, historical disadvantages such as backwardness are not major stumbling blocks. Good governance is all about the push from the top, and that’s where Kumar has done well.

Miles To Go
But a rapid growth rate should not belittle the fact that the state has miles to go. Though feudalism has been officially abolished, the state is among the most backward in terms of caste relations that often result in violence. The carving out of Jharkhand from Bihar (in November 2000) took away the bulk of the state’s wealth — an area that accounts for 40 per cent of the country’s mineral deposits. Though it has doubled its per capita income, in absolute terms, Bihar remains India’s poorest region, with an annual per capita income of Rs 14,268 in 2012-13 — a little over one-third of the national average of Rs 39,143. Agriculture, too, is facing a crisis in the state with a tepid growth of 6.27 per cent in 2012-13, half that of the previous fiscal.

The situation could get worse with the vagaries of the monsoon. This year, the rains have been 37 per cent deficient, raising the spectre of drought. With as many as 33 of the state’s 38 districts of the state declared drought-hit, the chief minister has demanded Rs 12,000 crore in central assistance.

As ADRI’s Bhuyan puts it, “the Bihar model is construction-centric — around roads and bridges”, and will, thus, need a lot more central infusion to take it out of the woods. It’s in this context that Kumar raised the demand for ‘Special Status’ for Bihar — a promise the state was made when mineral-rich Jharkand was separated. It’s also a winning card for the CM for the 2014 Lok Sabha elections.

Meanwhile, Bihar is no more the ‘Bimaru’ state dependent on the earnings of its migrant labour. Punjab is already facing the problem of the vanishing tribe of workers from Bihar who have returned home. Addressing a rally in March this year at Delhi’s Ramlila Ground, Kumar had told a cheering crowd: “The situation has changed. ‘Bimaru’ Bihar is now on the path of progress and it can present the real model for development that is equitable and sustainable.”

Source: BW