At a massive Delhi rally, Bihar chief minister Nitish Kumar boasted of the state’s major achievements after he assumed power, and proclaimed a Bihar model of development for others to follow. If we view development as a sort of Olympics, Bihar would win several gold medals. It’s a champion athlete.
Yet Kumar insists that Bihar is a terribly poor, neglected state that needs special subsidies and massive cash transfers from New Delhi to keep growing. This is like a top athlete demanding steroids to keep sprinting. No Olympics allows this, not even if an athlete is poor or historically deprived.
Bihar has registered GDP growth of 12 per cent per year for eight years, the fastest among major Indian states. This is awesome. Some argue it is easy to grow from a low base. Sorry, but if that were generally true, the poor and backward would be sprinting everywhere. Nitish’s 12 per cent growth is utterly remarkable. It also proves, however, that a poor, backward state can become a champion athlete through good governance, without special subsidies or political favours.
Bihar’s social progress has been remarkable too. Literacy in the decade 2001-11 rose 17 percentage points, the highest in India. Female literacy improved even faster, by 20 percentage points, probably a world record.
Bihar used to be far worse than the national average in social indicators, but in 2011 Bihar equalled the national infant mortality rate of 44 per thousand births, and bettered the national average in rural areas (45 per thousand against the national 48 per thousand. Bihar’s life expectancy is now 65.8 years, just short of the national 66.1. Bihar’s death rate is down to 6.7 per thousand persons against the national 7.1. This reflects huge progress in immunization.
There remain dark areas. Bihar has among the lowest rates of Plan spending and social spending per capita. It is India’s poorest state. Rural poverty in 2004-09 declined by just 0.4 per cent, against the national 8.2 per cent. However, this was only because of a major drought in 2009. A new poverty survey for 2011-12 is being finalized, and will surely show a dramatic drop in rural poverty. Slowing out-migration is tangible evidence of growing prosperity.
Bihar has long been among the worst states in family planning and population growth. Its population expanded 25 per cent in the last decade against the national 17.6 per cent, and its women have on average 3.7 children against the national 2.5. This has depressed its per capita income. But can this be a reason to demand more cash, which will come at the expense of states that have controlled their populations and hence improved per capita income? Should Tamil Nadu and Kerala subsidise Bihar’s bedroom profligacy?
Historically, Bihar’s fertile soil and ample water made it among the richest areas in the world, the seat of mighty empires. Unlike Assam it is not a historically backward area but a world leader that retrogressed, thanks mostly to incompetence and corruption. If Biharis repeatedly chose to elect Lalu Yadav, who declared that economic development was useless, why blame the rest of India?
Lalu asked, why build roads which will help only rich car-owners , who will then run over poor folk’s cows? Today, Nitish Kumar has reversed that policy by becoming a champion road builder. This has helped produce record GDP growth. But if Biharis voted Lalu to power for 15 years, should they suffer the consequences, or the taxpayers of other states?
Bihar provides only 2.8 per cent of national income but gets 8.6 per cent of central funds. That’s misleading, says Bihar : we account for 8.8 per cent of the population, and it is the poorest 8 per cent, so we deserve more. Once again the question arises, should successful family planners have to pay more to the unsuccessful? Bihar’s Plan spending (net of book adjustments) has shot up from Rs 1,000 crore per year under Lalu to Rs 16,000 crore today. This contradicts Nitish’s complaint of “step-motherly treatment” by Delhi. Rather, it shows how deeply self-inflicted were Bihar’s wounds under Lalu.
Nitish has demonstrated that, despite historical problems, Bihar has enough going for it to become a growth champion. It needs to shift massively from agriculture to industry and services, and Nitish wants Central tax breaks for this. But Bihar’s industrial output (including construction) in 2010-11 and 2011-12 grew 17 per cent and 18.4 per cent respectively, and manufacturing grew by 8.5 per cent and 8.9 per cent. These rates were much better than the corresponding national growth rates. Bihar badly needs more electricity and big industries, but is far from stagnant. Nitish may have the political muscle to get Bihar declared a special category state after the 2014 election. But this will be a victory of the politically powerful, not of the deserving weak.