"FOR THE FIRST TIME IN MORE THAN 50 YEARS,NITISH KUMAR HAS BROUGHT HOPE INTO PROSPERITY,THE STATE WILL NEED TO SUSTAIN THE CURRENT MOMENTUM"
The political row between chief ministers Nitish Kumar of Bihar and Narendra Modi
of Gujarat has spilled over into an acrimonious debate on the
performance of their respective states. Defenders of each state have
gone on to rubbish the accomplishments of the other state. This is a
painful spectacle since the achievements of both states are considerable
and deserving of celebration rather than rebuke.
Focussing exclusively on Bihar today, let us begin by noting that this state has suffered from neglect by the Centre as well as local leaders during much of its existence beginning in 1947. It is fashionable to blame Lalu Prasad and his wife, Rabri Devi, for the woes of Bihar. While it is true that 15 years of misrule by this husband-wife team held back the progress of Bihar during India's crucial reform era, the state's misfortunes go much farther back. Few chief ministers preceding Lalu and Rabri had shown any passion for building an economically strong state.
Data testify to this long-standing neglect. As far back as 1980-81, per capita income in Bihar as measured by per capita net state domestic product was the lowest among all states. Even Rajasthan, the second-poorest state, enjoyed one-third higher per capita income. And the richest state, Punjab, had per capita income almost three times that of Bihar.
Unlike Rajasthan, which managed to climb up to the fifth place from below among the larger states in the subsequent decades, Bihar remained steadfastly at the bottom. The creation of Jhar-khand, accounting for a quarter of the state's original population, left it further impoverished. Because the more industrialised and richer parts of the state went with Jhar-khand, the per capita income of new Bihar fell by 10 to 15% overnight. The break-up also resulted in a decline in the proportion of the population living in urban areas.
By 2004-05, the last year before Kumar came to power, per capita income in the second-poorest Indian state, which was now Uttar Pradesh, had moved up to two-thirds higher than that of Bihar. The richest among the large states, Haryana, had per capita income almost five times that of the latter. Bihar had started the poorest in 1980-81 and it grew the slowest over the following quarter-century.
Unsurprisingly, the task facing Kumar was Herculean. He began with a per capita income that was barely two-thirds of the average of India a solid 25 years earlier. The law and order situation was in a shambles with rampant corruption and skyrocketing rates of crime. Infrastructure was among the worst in the country. A whopping 78% of the rural workforce depended for livelihood on low-productivity agriculture.
What has Kumar accomplished? Between 2005-06 and 2010-11, total incomes in Bihar have grown 9.9% annually. If we take out the first year of his administration during which his initiatives could not possibly have had any impact, growth in the remaining five years averages 11.7%. In addition to being the period of highest growth in the recorded history of Bihar, these five years have also been characterised by the least fluctuations.
In terms of other indicators, the most impressive progress has been in the literacy rate, especially among women. The proportion of the rural workforce employed in agriculture has declined from 78% in 2004-05 to 67% in 2009-10. Prudent fiscal management has helped bring the debt burden down significantly.
The change is not just good luck but the fruit of special efforts in which the chief minister is directly and actively involved. Efforts to cut down on serious crime have been greatly intensified with all indicators in terms of convictions as well as safety of citizens showing dramatic improvement. New teachers have been hired at accelerated pace, translating to rapid expansion of enrolments. And roads have been constructed at a speed not previously witnessed in the state.
While Bihar has, thus, turned a corner, it is not out of the woods by a long shot. In terms of level rather than change, in most indicators it remains 30 or more years behind the Indian average. Per capita income remains below that of India as a whole in 1980-81. Much more dramatically, urbanisation at a paltry 11% compares unfavourably with the 17% India-wide average prevailing six decades earlier in 1951. The share of manufacturing in state output stood at an abysmally low level of 3.9% in 2010-11. This is the result of more than just the loss of a vast chunk of industry to Jharkhand. The share has in fact seen a secular decline since 2000. Sectors that have driven growth are construction, hotels and restaurants and telecommunications.
For the first time in more than 50 years, Kumar has brought real hope to Bihar. To turn this hope into true prosperity, the state will need to sustain the current momentum of good policies for many more years to come. The state must continue to improve law and order and combat corruption. It also needs to reverse the decline in manufacturing and accelerate the process of urbanisation.
And, of course, if there ever existed a case for the central government to generously assist this third most populous state of the nation in its struggle against extreme poverty, it is now. The government must rise above petty politics in helping this land of Chandragupt Maurya, Ashok and Chanakya, birthplace of Buddh-ism and Jainism and home to the great ancient university of Nalanda, regain some of its former glory.
The writer is professor of economics at Columbia University.
Focussing exclusively on Bihar today, let us begin by noting that this state has suffered from neglect by the Centre as well as local leaders during much of its existence beginning in 1947. It is fashionable to blame Lalu Prasad and his wife, Rabri Devi, for the woes of Bihar. While it is true that 15 years of misrule by this husband-wife team held back the progress of Bihar during India's crucial reform era, the state's misfortunes go much farther back. Few chief ministers preceding Lalu and Rabri had shown any passion for building an economically strong state.
Data testify to this long-standing neglect. As far back as 1980-81, per capita income in Bihar as measured by per capita net state domestic product was the lowest among all states. Even Rajasthan, the second-poorest state, enjoyed one-third higher per capita income. And the richest state, Punjab, had per capita income almost three times that of Bihar.
Unlike Rajasthan, which managed to climb up to the fifth place from below among the larger states in the subsequent decades, Bihar remained steadfastly at the bottom. The creation of Jhar-khand, accounting for a quarter of the state's original population, left it further impoverished. Because the more industrialised and richer parts of the state went with Jhar-khand, the per capita income of new Bihar fell by 10 to 15% overnight. The break-up also resulted in a decline in the proportion of the population living in urban areas.
By 2004-05, the last year before Kumar came to power, per capita income in the second-poorest Indian state, which was now Uttar Pradesh, had moved up to two-thirds higher than that of Bihar. The richest among the large states, Haryana, had per capita income almost five times that of the latter. Bihar had started the poorest in 1980-81 and it grew the slowest over the following quarter-century.
Unsurprisingly, the task facing Kumar was Herculean. He began with a per capita income that was barely two-thirds of the average of India a solid 25 years earlier. The law and order situation was in a shambles with rampant corruption and skyrocketing rates of crime. Infrastructure was among the worst in the country. A whopping 78% of the rural workforce depended for livelihood on low-productivity agriculture.
What has Kumar accomplished? Between 2005-06 and 2010-11, total incomes in Bihar have grown 9.9% annually. If we take out the first year of his administration during which his initiatives could not possibly have had any impact, growth in the remaining five years averages 11.7%. In addition to being the period of highest growth in the recorded history of Bihar, these five years have also been characterised by the least fluctuations.
In terms of other indicators, the most impressive progress has been in the literacy rate, especially among women. The proportion of the rural workforce employed in agriculture has declined from 78% in 2004-05 to 67% in 2009-10. Prudent fiscal management has helped bring the debt burden down significantly.
The change is not just good luck but the fruit of special efforts in which the chief minister is directly and actively involved. Efforts to cut down on serious crime have been greatly intensified with all indicators in terms of convictions as well as safety of citizens showing dramatic improvement. New teachers have been hired at accelerated pace, translating to rapid expansion of enrolments. And roads have been constructed at a speed not previously witnessed in the state.
While Bihar has, thus, turned a corner, it is not out of the woods by a long shot. In terms of level rather than change, in most indicators it remains 30 or more years behind the Indian average. Per capita income remains below that of India as a whole in 1980-81. Much more dramatically, urbanisation at a paltry 11% compares unfavourably with the 17% India-wide average prevailing six decades earlier in 1951. The share of manufacturing in state output stood at an abysmally low level of 3.9% in 2010-11. This is the result of more than just the loss of a vast chunk of industry to Jharkhand. The share has in fact seen a secular decline since 2000. Sectors that have driven growth are construction, hotels and restaurants and telecommunications.
For the first time in more than 50 years, Kumar has brought real hope to Bihar. To turn this hope into true prosperity, the state will need to sustain the current momentum of good policies for many more years to come. The state must continue to improve law and order and combat corruption. It also needs to reverse the decline in manufacturing and accelerate the process of urbanisation.
And, of course, if there ever existed a case for the central government to generously assist this third most populous state of the nation in its struggle against extreme poverty, it is now. The government must rise above petty politics in helping this land of Chandragupt Maurya, Ashok and Chanakya, birthplace of Buddh-ism and Jainism and home to the great ancient university of Nalanda, regain some of its former glory.
The writer is professor of economics at Columbia University.
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