Thursday, June 18, 2009

Bihar’s Growth Rate Story: A Perspective

Bihar Times): If the dramatic growth rate of 16 per cent in GSDP(Gross State Domestic Product) indicated in the Economic Survey of 2007-08 was correct than Bihar witnessed a huge decline in the following year, that is, 2008-09. This year it registered a growth rate of just 2.41 per cent (Table 1.7 Economic survey 2008- 09)

Tabled by deputy chief minister Sushil Kumar Modi in the Bihar assembly on Tuesday it shows growth in three sectors–– construction (21.53 per cent), communications (16.01 per cent) and trade, hotels and restaurants (12.03 per cent). The developments in the first two sectors is mostly possible because of several big projects taken up by the various central ministries and private sectors (especially telecom companies)

So far the state’s achievement is concerned agriculture grew by just 1.38 per cent, which is much lower than the desired four per cent growth. The state’s finance minister attributed it to two successive severe floods. Once again the last year Economic Survey showed 24.4 per cent fall in the agriculture growth and on that occasion too flood was held responsible. What remained a mystery is that in the last financial year the overall growth rate was shown at 16 per cent when the Economic Survey also said that there was 24.4 per cent fall in agriculture growth in the same period.

In spite of this perfect packaging, the Economic Survey showed that the growth rate was lower than the national average growth rate of six to seven per cent. However, it claimed that it is still higher than what it was in the past when the state economy grew at barely three to four per cent.

Whatever the state government may claim now the truth, however, is that the state registered an average growth rate of 4.89 per cent between 1992-93 and 2003-04, which was a phenomenal performance during those period of low GDP. In 2000-2001 Bihar, under the much-maligned Rabri Devi government, registered the growth rate of 5.97, which was highest since independence. This was achieved at the time when the central investment was much less.

This year’s Economy Survey is unique in other aspects too. It talked of “improved law and order situation in the state”. In normal condition law and order is not the subject for the Economic Survey to discuss.

However, Modi said that “I know law and order is not generally mentioned in an economic survey but it is an important indicator for commercial activities in Bihar.”

The Survey said that the use of chemical fertilizers by farmers has increased by over 62 per cent, yet what is surprising is that the farm growth has increased by just 1.38 per cent. On the industrial front, it points out that 15 out of the 164 approved proposals have already been implemented with one of them ready for production. As many as 49 proposals with a total investment of about Rs 23,000 crore are in an advanced stage of implementation. It also talks of growth in the tourism sector in Bihar.

The Survey talks about achievements in education and health sector. For example, the enrolment, according to it, in primary schools during the last four years has increased by over 28 per cent and in case of scheduled caste children by over 35 per cent. But if a recent media report is to be believed the figure of high enrolment has been highly inflated by the officials as they want to lift more and more food for the mid-day meal programme. Similarly, in the health sector much is possible because of the massive doze of medicines by the Centre under the National Rural Health Mission launched in 2006.

The Survey talks of increased commercial activities of five regional rural banks (RRBs). In comparison the commercial banks witnessed a slight decline during 2007-08. They gave credit to the tune of Rs 17,202 crore. The figure of RRBs stand at Rs 3,678 crore in the same period. It says that by increasing revenue and rationalising expenditure, the state has generated a surplus of Rs 4,647 crore.

The Survey claimed that the economy is well set to achieve most of the 11th Plan target, especially those related to the development in the social sector.

This year’s Economic Survey seems to be loaded with more realistic and accurate facts and figures than the last year’s which claimed 16 per cent. The state government was taken to task by several experts on that occasion yet it stood by what it said in its Survey. However, this year the Survey unnecessarily went on to highlight law and order issue which is never its purpose.

http://bihartimes.com/Newsbihar/2009/Feb/Newsbihar27Feb1.html

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