LUCKNOW: UP and Bihar — for long, the two states have been like country cousins, remembered in the same breath as models of underdevelopment; home to corrupt politicians and babus and, as exalted members of Bimaru states, symbols of everything that ailed the Indian economy. But then one man was introduced in the plot, as if by divine intervention. And the script changed. As the chief minister of Bihar, Nitish Kumar tried to pull Bihar out of the clutches of backwardness. Biharis raised a toast to his genuine attempts and he was given a rare second term with a historic mandate.
So, is Bihar developing so fast that it will leave Uttar Pradesh behind in the next few years? The Central Statistical Organisation (CSO) data between 2000 and 2009 categorically shows that Bihar has kind of outpaced UP in terms of growth indices in the last decade (pointedly since Nitish Kumar took the rein), triggering all-round appreciations from economists and public.
Although stats hardly present the real picture from the grass–roots, for the record sake, Bihar’s net state domestic product (NSDP) at constant prices grew by 68% between 2000 and 2009. The same for UP is 50%. In 2000-01, SDP for Bihar was Rs 53,656 crore. That went spiraling up to Rs 90,566 crore, a jump of 68%. On the other hand, UP had a NSDP of Rs 1,60,015 crore which rose to 2,40,039 crore, a rise of 50%. No wonder, Bihar is now considered to be the second fastest growing state after Gujarat.
In fact, in June 2009, the World Bank reported that Patna was the second best city in India to start a business, after Delhi. Between 1999 and 2008, state GDP grew by 5.1% a year, which was below the Indian average of 7.3%. However, in January 2010, the Central Statistics Organisation reported that in the five-year period between 2004–05 and 2008–09, Bihar’s GDP grew by 11.03%, which made Bihar the second fastest growing economy in India during that five-year period, just behind Gujarat’s growth of 11.05%.
Another survey conducted by Central Statistical Organisation (CSO) and National Sample Survey Organisation, showed that Bihar had 14.80% growth in factory output in 2007-08, which was slightly less than the Indian rate of 15.24%. “Bihar did not have a proper and systematic governance for many years. That affected its socio-economic development. Now, with a stable governance the state is showing a miraculous change,” said Shaiwal Gupta, member secretary of Patna-based Asian Development Research Institute (ADRI).
Bureaucrats in Uttar Pradesh however are not so impressed by the Bihar story. “Bihar was so backward that it started from negative growth. So, even small development looks significant,” says senior IAS officer Sailesh Krishna.
Gupta, too, admits that Bihar had a low base. “And therefore any significant change shows up,” he says. The sectors powering growth in the state are construction at 35.8% growth per annum in the five-year period starting 2003, compared to 8.4% growth in the previous five years and services at 11.5% compared to 5.4% previously.
Significantly, it’s the service sector (banking, insurance) that provides the maximum push to Bihar’s growth. The sector grew by a whopping 117% as against 106% in case of Uttar Pradesh in the last decade. Bihar’s service sector contributed Rs 28,804 crore in 2000-01. By 2008-09 this scaled up to Rs 62,518 crore. UP, on the other hand, too performed well but not as good as its counterpart, at least in percentage terms. The state had its service sector contributing Rs 79,691 crore to the NSDP in 2000-01. By 2008-09, this figure notched up to Rs 1,64898 crore.
Notably, UP does well in the other two sectors — primary and secondary sectors. While UP’s primary sector, essentially agriculture, grew by 18.7%, in Bihar it grew by 11.6%. In case of secondary sector UP registered a growth of 187% while Bihar’s industrial growth remained at 20.3%. “The two states are alike and yet completely different,” says Arvind Mohan, an economist and a professor at Lucknow University. “Any investment in Bihar would mean a lot. That may not be the case with UP which has seen a sustained if not a sharp growth trajectory for the past many years,” he said.
Mohan, however, maintains that the annual growth rate of Bihar in past five years has been good enough to give UP a run for money. Economists point out per capita income (PCI) as another base to assess the socio-economic growth of a state. According to CSO data, Bihar’s PCI was Rs 6,197 at current prices (which takes into account inflation) in 2001-2002. This rose to Rs 13,663 as against the national average of Rs 37,490. In other words PCI of Bihar registered a growth of 120%. UP’s PCI was Rs 9781 in 2001-2002. This has now gone up to Rs 18,710. Or, a rise of 91%.In fact, in 2007, Patna recorded a per capita income of Rs 31,441. This was even higher than Bangalore orHyderabad, which are both leading centres for global software development. This also reflects how much the Bihar growth story is centered around the capital city. Says Gupta: “It was essentially because of the fact that Patna is the city which has attracted maximum investment.” He said that if one takes the case of UP, the state has its western part growing at a rapid pace. “There is NCR region which provides a growth impetus,” he says. This is the area which contributes maximum to UP’s industrial growth.
Despite a phenomenal growth in the past three-four years, there are two major areas where Bihar still lags behind – literacy and per capita power consumption. In fact, the total power demand in Bihar is almost as much as Gurgaon’s and its per capita income is still one of the lowest in the country. And as one travels through Bihar, one may not find a dramatic change in the lives of the people in general, but what has certainly changed is how the rest of India perceives Bihar now. There are stories galore of Bihari NRIs coming back to their roots to start a business; India Inc suddenly seems overtly interested in the pariah of the past and our finance minister makes in glowing terms a special mention of the once-most backward state in his speech. Even if one doesn’t go by stats, have we in UP witnessed any of such positive signs of late?
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IFC, a member of the World Bank Group, and the Bill and Melinda Gates Foundation are working with the government of Bihar state to find ways to make government payments to health workers and health beneficiaries more efficient, transparent, and timely.
Jamshedpur: Bihar Chief Minister Nitish Kumar has been conferred the prestigious Sir Jehangir Ghandy Medal for Industrial and Social Peace 2011 by XLRI-Jamshedpur (Xavier Labour Relations Institute) “for his role in effecting Bihar’s turnaround within a short span.”
