World Bank praises Bihar’s rapid economic development

NEW DELHI — Lauding the Bihar government for undertaking all-inclusive policy reforms, the World Bank said Bihar has started turning around in real terms .

“In response to the people’s aspirations, the state government has begun to set the stage for rapid economic development…. There are visible signs of a turnaround where the Bihar government has been implementing wide-ranging reforms. State revenues and development expenditures have increased,” the multilateral lending agency said in a statement.

Bihar has undertaken sweeping policy reforms, sometimes moving ahead of the more progressive states in the country. Major initiatives have been taken to streamline the administration, attract industry, ensure easier credit and better prices for farmers, and to lay the foundation for bringing modern e-governance services to the people.

“By all accounts, law and order has improved, and informal surveys show that many people see a change for the better,” the World Bank said.

While Bihar has a lot of catching up to do, there are signs of hope. If the current momentum for progress can be sustained, the state can hope to bring prosperity to its people. The road to development will now need the combined efforts of the state and the central government, the private sector, civil society, Bihar’s migrant population, as well as the international community.

World Bank said Bihar is home to some of the country’s poorest people, but a new reform effort by state government along with the bank’s support, has helped it improve public finance management and better utilization of proceeds.

“Reducing poverty and accelerating growth in the state are likely to have national implications,” it said. Until 2007, economic growth in Bihar was much slower and its public services and infrastructure were among the worst in India.

“Pinpointing the roots of economic growth is complex, the faster growth experienced by Bihar after 2004 can be reasonably linked to improvements in the rule of law, more efficient and larger public expenditures, and better infrastructure,” the bank said.

The Bank said it has also been helping the Government of Bihar to build technical capacity in a range of sectors, from public expenditure management, to the reform of the public distribution system. A Development Policy Loan to help the state implement its broad development agenda is also under preparation.

“Given the devastation wrought by the recent floods, we are looking at ways to expand our on-going technical support to the Government of Bihar for flood forecasting and management. And, as we move forward, we are working closely with the Asian Development Bank (ADB) and the United Kingdom’s Department for International Development (DFID) to define a joint framework for a coordinated approach to our assistance,” a statement issued by the bank said.