Bihar continues struggle despite positive indicators

All the major indicators for Bihar are up, but the state is still at the bottom of key development indices.

A bird's eye view of state capital Patna A bird's eye view of state capital Patna
Sanjeev Gupta, after he has imbibed some of his favourite drink, Royal Stag, begins to have a hazy dream involving home-cooked food and two Boleros. When he wakes up, he rushes to join the taxi lane at New Delhi's Indira Gandhi International Airport. The cab he drives, a battered, yellow-and-black Maruti Omni, earns him enough to buy at least a bottle of Royal Stag a week. But ever so often, at times even at the wheel, Gupta is besieged by visions of his family home in Gopalganj, near Bhagalpur, in Bihar. And two Boleros.

In his early thirties now, Gupta came to Delhi 12 year ago - one among tens of thousands regurgitated every month by overflowing trains from Bihar, fleeing unmitigated chaos and seeking livelihood. Now all he wants to do is take the train back.

"Once I have saved enough to buy two second-hand Boleros from Punjab, I will go back," he says. The rugged Mahindra vehicles will give him a healthy income. "Once money comes, I will find avenues to invest. There is enough to do in Bihar now. This is Nitish Kumar's rule."

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Since that rule started on October 25, 2005, it has exceeded all expectations. Kumar became chief minister at a time when Bihar, battered by a decade and a half of governments led in one way or the other by Lalu Prasad, had been given up for dead.

Even in capital Patna, an ancient city of formidable kings like Ashoka and master strategists like Kautilya, lawlessness ruled. Kidnapping flourished to the extent that Bollywood director Prakash Jha, who is from Bettiah, a dusty town on the Bihar-Nepal border, made a film on it.

People learned to be modest about their wealth; those who could afford a Corolla settled for a Zen. Little noticeable development took place. Travellers began to measure the roads not in kilometres but in hours.

For college students, it was not uncommon to finish their three-year graduation in five, as examinations were held late. Schools did not have teachers. The few teachers that were there, practised another trade on the side.

A point came when news of corruption involving top functionaries of the government no longer raised eyebrows. The spin-off of the southern part of the state into Jharkhand in 2000 doused whatever hope was left. The southern part, with its abundant deposits of iron ore and coal, drew whatever capital still came to the state.

The division left agriculture as Bihar's dominant source of income, with some trading activity and some basic services like travel and hospitality. Naturally, those who aspired for more fled the state and sought their fortune in Delhi, Mumbai - right up to California.

65,819 criminals convicted since 2006. Of these, 10,928 were given life sentences and 133 hanged

Some of them - like US-based Cradle Technology's Chief Operating Officer Ramesh Yadav, social entrepreneur Satish Jha and STAR India Chief Executive Uday Shankar - were back in Patna over February 17 to 19 to attend the somewhat pompously named Global Bihar Summit 2012.

They had to jostle for space on stage and off it with industrialists Kumar Mangalam Birla and Analjit Singh, and K. V. Kamath, who as Chairman of ICICI Bank and Infosys Technologies, is among the country's most successful managers.

Two of the top regulators, Reserve Bank of India Governor D. Subbarao and Securities and Exchange Board of India Chairman U.K. Sinha, also came.

So did global citizens like World Bank's Country Director Roberto Zagha and UNDP's Caitlin Wiesen. It was like the world had turned up to verify what it had read and heard about this new Bihar Kumar was building.

A newly built flyover in Patna. CM Nitish Kumar has built 13,322 km of new roads and 3,648 bridges
A newly built flyover in Patna. CM Nitish Kumar has built 13,322 km of new roads and 3,648 bridges

They were not disappointed. Beginning his tenure with the dramatic pledge of "governance, governance and governance", Kumar has made the state unrecognisable. He embraced one of the principles enunciated by Kautilya, and iterated some 2,000 years later by Adam Smith, that a secure and peaceful environment, where economic transactions are protected by the rule of law, is the key to robust development. He set up a Special Auxiliary Police comprising 10,500 freshly retired army personnel.

The conventional police force was made visible again by recruiting 20,000 constables and 2,000 sub inspectors. He set up fast-track courts which have convicted nearly 66,000 criminals since 2006.

He resurrected government hospitals, pushing up the number of patients arriving from two a day to 40. He appointed some 248,000 teachers and made sure they attended school. This sharply reduced the percentage of children not attending school. Kumar has already built 13,322 km of new roads and 3,648 bridges.

699 cases of corruption registered since 2006; there were 285 in the preceding 10 years

Bihar became the first state to fully implement the Right to Public Services Act, capping the time taken to issue a driver's licence at 30 days and a ration card at 60. So a government officer cannot demand a bribe by delaying these things.

Corruption anyway fell with a crackdown that saw the house of a bureaucrat being confiscated and converted into a school. All corruption cases have to be concluded within a year. In Kautilya's prescribed environment, trade is flourishing as people are pounding the roads and filing into eateries.

Families are thronging the first mall and multiplex built in Patna by the man who made the movie on kidnapping. Some of them come in Corollas and some stay on to watch the late-night shows.

Workers take a break at a brick kiln near Patna
Workers take a break at a brick kiln near Patna

All the economic indicators are up. The Gross State Domestic Product (GSDP) has been growing at an average of 11.4 per cent every year since 2005/06, compared to 3.5 per cent a year in the five years to 2004/05. The fiscal deficit is down to three per cent from six per cent a decade ago, and per capita income has been galloping.

Tax revenue growth has averaged 25 per cent in the last five years. In a highly symbolic event reported by news agency Reuters last year, hundreds of thousands of illegal arms seized by police were melted and turned into agricultural tools.

What is more, after his first term ended in 2010, Kumar returned to power with a landslide victory, leaving no one in doubt that "governance, governance, governance" could also spell political triumph. His bete noire Prasad - the two began their public lives together with Jaiprakash Narayan's "Total Revolution" in the mid-1970s - finds himself in the political wilderness.

Kumar's other rival, Ram Vilas Paswan, who once declared that he held "the key to Bihar", last made news when his son made his forgettable Bollywood debut.

"When people had stopped thinking of Bihar, Biharis have on their own bounced back," said Kumar at the inaugural session of the summit and drew thunderous applause, and two piercing slogans, from the 1,500 people who had packed the Sri Krishna Memorial Hall in the heart of Patna.

However, Kumar said something else at the same session, which went largely unnoticed.

Addressing Nepal Prime Minister Baburam Bhattarai, the chief guest at the summit, Kumar said he was looking at the head of the government in the Himalayan state for guidance because "the path ahead of us is very tricky... a difficult and uphill climb."

Students ride their bicycles, which they got under a bicycle scheme.
Students ride their bicycles, which they got under a bicycle scheme.

Which it is. All the buoyant indicators have not lifted Bihar out of the morass of poverty and underdevelopment. Its per capital income is the lowest in India. Growth in wages and employment is slower than the national average. The National Sample Survey Office says there has been no decline in poverty since 2005-06.

Urbanisation is just 11 per cent, compared to 28 per cent for India. And then there is power, or the lack of it. "Bihar is an extremely power-deficient state with per capita consumption of just 100 units, compared with the national average of about 770 units. Without power, no heavy industry can be set up," said Kumar Mangalam Birla at the summit.

Children out of school down from 12.5% to 3.5%

The lack of industrialisation shows up in the credit-deposit ratio for banks in Bihar, which is less than 35 per cent, compared to the national average of close to 75 per cent.

"The challenge for the state is to ensure that there are bankable schemes," said RBI Governor Subbarao. There has been development, but a lot it led by schemes of the Centre.

Bihar's own revenues as a percentage of GSDP have actually fallen from seven per cent a decade ago to about five per cent. The state was third from the bottom in UNDP's latest human development index.

"Nitish Kumar has done remarkable things to turn around a state everyone thought was a basket case. But it is still so far behind. Business as usual will take it 20-30 years to catch up with the national averages. To do it sooner, say in 10 to 15 years, the state must grow at 14 to 15 per cent," says Sudipto Mundle, Emeritus Professor at the National Institute of Public Finance and Policy in New Delhi.

Kumar is acutely aware of the expectations raised by his early success. He hopes to bridge the gap in two ways: by getting more from the Centre for development schemes and by developing the state's traditional strength of agriculture, for which he has a Rs 150,000-crore plan for the next five years.

"The next green revolution will come from the east of India and it will not be a green revolution but a rainbow revolution. We want that at least one dish on every Indian's plate should be from Bihar."

He also realises that his success will eventually be measured by the tangible changes in people's lives. "GDP growth is not real growth. That is for the economists to worry about," he says. "Unless aam aadmi's income grows, unless life at the lowest rung improves, we will not call it development."

And then, maybe a small house in Gopalganj, near Bhagalpur, will have two Boleros parked in the lane outside.

  • Per capita income growth 8.5%; among the best performing states
  • 21 percentage point decline in infant mortality since 2005, highest among states
  • Literacy improvement 16 percentage points since 2001 80% higher than national average
  • Fiscal deficit down to 3 per cent from 6 per cent a decade ago
  • Share of capex in govt spending up at 20% from the rock bottom of less than 8% per cent in 2004/05
  • Per capita income below half the national average
  • Infant mortality rate 48 per 1,000 live births, higher than the national average
  • Literacy lowest among all states
  • Fiscal consolidation mainly due to increase in central transfers from 10% of GSDP a decade ago to over 16%
  • Own revenues lower today at 5.6% of GSDP compared to 7% a decade ago