Bihar \u2018Growth Miracle\u2019: \u00a0 Myth and Reality<\/p>\n
Observer<\/p>\n
There has of late been a lot of media\u00a0 hype about the recent \u2018CSO\u2019 (Central Statistical Organisation) data on Bihar\u2019s\u00a0 \u2018growth miracle\u2019 in the last 5 years. At a five-yearly average of 11.03 per\u00a0 cent, Bihar under Nitish Kumar has apparently been next only to Gujarat which\u00a0 clocked a growth rate of 11.07%, only marginally higher. The CSO has of course\u00a0 been quick to distance itself from this statistical miracle, attributing the\u00a0 figures to data supplied by the Bihar government. \u00a0 Be that as it may, an average GSDP growth rate of 11.03 per\u00a0 cent per annum in the last five years (from 2004\u201305 to 2008\u201309) is, no doubt,\u00a0 quite impressive at first sight. But a closer look makes it clear that it is\u00a0 more a case of statistical illusion than any real transformation on the ground. \u00a0 Starting from a very low base, even an otherwise relatively\u00a0 marginal increase in GSDP\/NSDP in absolute terms would give a very impressive\u00a0 picture in terms of growth rate figures. For instance, Bihar\u2019s NSDP (Net State\u00a0 Domestic Product) may have nearly doubled from Rs. 66,040 crore in 2004 to\u00a0 nearly Rs. 1,19,443 crore\u00a0 in 2008\u201309, which is still paltry when compared to TN (Rs. 2,99,119 crore),\u00a0 Maharashtra (Rs. 5,04,950 crore) or Gujarat (Rs. 2,57,694 crore). \u00a0 Coming to the sectoral picture of the Bihar economy,\u00a0 agriculture has reportedly registered an unbelievably high growth rate of 9 per\u00a0 cent per annum average between 2004\u201305 to 2008\u201309, with agricultural NSDP\u00a0 increasing from Rs. 18,155 crore\u00a0 in 2004\u201305 to Rs. 26,399 crore in 2008\u201309. This 9 per cent growth rate claim\u00a0 certainly does not tally with the stagnant and crisis-ridden agricultural scene\u00a0 on the ground. Once again, it is a case of statistical illusion. Actually, the\u00a0 agricultural NSDP in Bihar in 2005\u201306 at Rs. 17,812 crore was lower than Rs.\u00a0 18,735 in 2000\u201301 and the intervening years witnessed virtual stagnation in\u00a0 Bihar agriculture. In view of this prolonged stagnation, recovery in 2006\u201307\u00a0 which saw an agricultural NSDP of Rs. 23,700 crore marked a sharp increase in\u00a0 growth rate in 2006\u201307 over 2005\u201306, something like 29% in a single year!!!\u00a0 This jacked up the overall trend growth rate per annum in the last five years. ![\"rally](\"http:\/\/www.cpiml.org\/liberation\/year_2010\/march_10\/photo\/2MAHANGAI-KE-KHILAF-AIPWA-KA-PARDARSHAN.gif\")
\u00a0 But after 2006\u201307, it was again a story of stagnation in\u00a0 Bihar agriculture with the NSDP recording Rs. 23,251 crore in 2007\u201308\u00a0 (marginally lower than in the previous year of 2006\u201307) and hence showing a\u00a0 relatively higher increase to Rs. 26,399 crore in 2008\u201309 over the previous\u00a0 year (i.e., 13.5 per cent, in the year of Kosi disaster when, according to the\u00a0 government figures themselves, about 1,20,000 hectares of land went under water\u00a0 in August, destroying not only the kharif crop but also sharply reducing the\u00a0 rabi acreage.) If we calculate the trend growth rate of the average per annum\u00a0 from 2000\u201301 to 2008\u201309, the average agricultural growth rate of Bihar works\u00a0 out to a modest 4.5 per cent per annum. Thus, the relatively \u201cimpressive\u201d\u00a0 growth rate during Nitish period was more due to the stagnation in the earlier\u00a0 period and the recovery is also marked by repeated spells of stagnation in\u00a0 between in the Nitish era itself. \u00a0 It should also be noted that much of Bihar\u2019s agricultural\u00a0 \u2018growth\u2019 revolves around horticulture. Bihar is the fourth largest\u00a0 horticultural producer in the country. Fruits and vegetables are cultivated in\u00a0 about 8 lakh to 1 million hectares of Bihar, or nearly 20 per cent of net\u00a0 cropped area, producing 3.2 million tonnes of fruits and 7.6 million\u00a0 vegetables. But, leaving the corporate trade in litchi, not even 1 per cent of\u00a0 this horticultural produce is processed and not even five per cent of the horticultural\u00a0 area is covered by coldstorage infrastructure (the whole State has only 200\u00a0 coldstorages with a meagre 4 lakh tonnes capacity) and hence one can imagine\u00a0 the low prices and distress sale by farmers and the stranglehold of mercantile\u00a0 capital. In 2008, potato farmers suffered heavy crop loss due to blight disease\u00a0 and farmers got no compensation. \u00a0 The overall industrial sector \u2013 comprising mining &\u00a0 quarrying, manufacturing (registered and unregistered), construction and\u00a0 electricity-gas-water supply \u2013 NSDP has also clocked a significant 25.4 per\u00a0 cent growth (23.4 per cent in GSDP) over the five years from a negative growth\u00a0 earlier. But the manufacturing subsector within industrial sector tells a\u00a0 different story. The manufacturing sector in Bihar grew from a paltry Rs. 3379\u00a0 crore in 2004\u201305 to Rs. 4852 crore in 2008\u201309 but the manufacturing NSDP of\u00a0 Maharashtra in 2008\u201309 was Rs. 90,819 crore, 18 times more than that of Bihar!\u00a0 Why, the manufacturing NSDP of the tiny Puducherry (Pondicherry) was more than\u00a0 the big Bihar\u2019s, at Rs. 5203 crore in 2008\u201309! \u00a0 The secret of high growth in Bihar during the Nitish period\u00a0 lies in the exceptionally high growth in construction. The construction sector\u00a0 in Bihar grew from Rs. 3766 crore in 2004\u201305 to Rs. 12,033 crore in 2008\u201309,\u00a0 almost three-and-a-half-fold increase. This jacked up the overall growth rate\u00a0 to some extent. \u00a0 What explains this major stride in construction growth in\u00a0 Bihar? Housing boom? No, not at all. Bihar records a pathetic figure even in\u00a0 Indira Awas Yojana (state-subsidised housing with Central assistance), and with\u00a0 only 10% urbanization we can hardly talk about any major boom in urban housing.\u00a0 What then is the secret behind this construction growth in Bihar? Actually, the\u00a0 substantial growth in Bihar NSDP is accounted for by public investment in which\u00a0 the Central Plan assistance is a very major component. Central assistance to\u00a0 State Plans as well as Central Plan projects in Bihar has nearly tripled during\u00a0 the Nitish period and averages around Rs. 6000 crore per annum (Rs. 30,000\u00a0 crore in the last five years). \u00a0 In the four years of Nitish raj, 1854 \u201cbridges\u201d have\u00a0 reportedly been constructed and 6800 kms of roads laid. But this figure\u00a0 includes 1600 mini-bridges and even culverts! This is evident from the amount\u00a0 spent by the Nitish Government \u2013 Rs. 1340 crore was spent from the State\u2019s\u00a0 coffers to build 1854 \u201cbridges\u201d! Most of them were constructed under the\u00a0 centrally funded national highway project which involved four-laning of major\u00a0 highways, or all-weather rural roads construction under Pradhan Mantri Gram\u00a0 Sadak Yojana (PMGSY). \u00a0 True, private investment in Bihar in the last five years has\u00a0 also recorded an increase. But to put it in perspective, Bihar\u2019s aggregate\u00a0 private investment in the last five years stands at nearly Rs. 20,000 crore,\u00a0 whereas in a state like Tamil Nadu, in a single year alone (in 2008), it\u00a0 exceeds Rs. 31,333 crore, and that too in organised\/registered manufacturing!\u00a0 If one closely examines the investment pattern in Bihar, the bulk of private investment\u00a0 \u2013 and also of the overall investment including public investment \u2013 is accounted\u00a0 for by construction sector and not (registered) manufacturing or\u00a0 agriculture\/primary sector The Bihar State Investment Promotion Board has\u00a0 listed only 115 investment proposals for medium and large units (not all\u00a0 industries but include hotels, colleges and hospitals) approved. Out of these,\u00a0 45 are ethanol and\/or sugar units (35 of them being only ethanol), 5 cement\u00a0 units and 6 thermal power units. The rest are insignificant except a tractor\u00a0 unit and a few steel rolling mills needed for construction industry. So it is\u00a0 construction, especially the Central funds for roads, which is driving Nitish\u00a0 Kumar\u2019s growth story. \u00a0 This reinforces one fundamental truth about a backward state\u00a0 like Bihar \u2013 growth in Bihar can only be initiated and sustained by a spurt in\u00a0 public expenditure and the neo-liberal model which relies overwhelmingly on the\u00a0 market and private initiative of big capital has little relevance even from the\u00a0 limited objective of raising economic growth. Yet, Bihar government continues\u00a0 to woo big private capital and borrow its economic policy inputs from the\u00a0 notorious DFID (Department for International Development, a United Kingdom\u00a0 government department which promotes corporate interests and neo-liberal\u00a0 economics in the developing world). The International Growth Centre funded by\u00a0 DFID has chosen Bihar along with African countries like Ethiopia, Ghana, Sierra\u00a0 Leone and Tanzania and neighbouring Pakistan and Bangladesh to supply policy\u00a0 inputs for \u2018development\u2019! Mere increase in public expenditure will however not be\u00a0 enough to sustain growth, let alone reach its benefits to the sectors of the\u00a0 economy and sections of the people who suffer the most because of lack of\u00a0 development. What is needed is to orient and prioritise public expenditure so\u00a0 that sectors like agriculture and small scale enterprises that cater for the\u00a0 overwhelming majority of Bihar\u2019s population get the maximum attention and\u00a0 benefits. Such a trajectory of growth must begin with land reforms, investment\u00a0 in irrigation and agricultural development, increased agricultural credit for\u00a0 small peasants and tenants and, of course, increased generation and improved\u00a0 transmission of electricity. In the absence of this, growth will remain tilted\u00a0 heavily in favour of a tiny nexus of criminals, middlemen and corrupt officials\u00a0 and their political bosses and patrons.<\/p>\n
Tailpiece:<\/strong> Along with construction, Bihar has witnessed another boom in recent years \u2013\u00a0 liquor boom despite continuing popular protests, especially by rural women.\u00a0 Governments however continue to justify the liquor boom by pointing to growing\u00a0 revenues from increased excise earning. But in Bihar, the excise minister has\u00a0 raised the issue of a massive excise scam and instead of appointing a\u00a0 commission of inquiry into the alleged scam, Nitish Kumar has thrown the\u00a0 minister out of the cabinet. So much for his rhetoric of transparency and good\u00a0 governance !<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" \u092c\u093f\u0939\u093e\u0930 \u0915\u0940 \u0909\u0928\u094d\u0928\u0924\u093f \u0915\u0940 \u0959\u092c\u0930\u0947\u0902 \u092c\u0939\u0941\u0924 \u0926\u093f\u0928\u094b\u0902 \u0924\u0915 \u091b\u093e\u0908 \u0930\u0939\u0940\u0902 \u092a\u0930 \u0905\u092c \u0932\u0917\u0924\u093e \u0939\u0948 \u0915\u0940… more