BIHAR’s achievement of an 11 per cent annual growth rate in the 10th Plan — higher than that of Gujarat and the highest in the country — has been lauded and noticed at home and abroad. This came about from revival of the civil construction-based infrastructure works and especially the completion of unfinished jobs for years due to “massive extortions†and corruption, and the multiplier effect that the construction sector produced in the economy does not mean that the growth was less spectacular. Because, it is not just the “low base effect†but a combination of highly effective measures taken by the state government that helped growth momentum and these hold important lessons for the North-east.
First of these is positioning of a professional state planning board in which a former member of the Planning Commission played a key role in restructuring it as an effective planning and even direct project implementation, mid-course correction and evaluation. Equally crucial was the record disposal of about 34,000 criminal cases leading to conviction of hundreds of hardened “extortionists†and criminals who held the construction sector at ransom causing huge cost escalation, poor quality of work and delays.
It is the determined will of the state that galvanised the executive magistracy, the judiciary and the police to cut through the legal hurdles to achieve this remarkable feat – which has not only restored the rule of law but also satisfied a major condition of economic progress laid down by Adam Smith, an environment of “Peace and Order†and a legal system conducive to settlement of contractual obligations.
The next feature of growth is the success in education and emphasis on science and technical as the future base of industrial development strategy given the fact that creation of Jharkhand has reduced Bihar to a largely agrarian economy with industrial potential only in agro-based “knowledge†and service industries. Still, proximity to steel plants and minerals, Kolkata port and rail road communication link, relatively cheap land and labour are strong points that explain growing investors’ interest in Bihar.
The success of “Super 30†— a unique coaching institution run by a dedicated math teacher, turning youth from poor families capable of cracking IIT entrance examination, has been internationally acclaimed. What has to be recognised is the huge success of Bihari youths in all-India competitive examinations and practically in every sphere which enable the Bihari middle class to secure a firm position in India’s professional elite.
The growth of Patna as an emerging centre for Information Technology and IT-related activities indicates Bihar’s potential in this field — that is still to take place in the North-east. The other factor has been the great strides in mobilising the state’s s own revenues, reducing fiscal deficit and revamping the state power and transport utilities. This is most significant because, though it holds 8.1 per cent of India’s population, ranks 13th in human development index and GDP per capita, it is not in the special category of states, like all the eight North-east states, and has been receiving normal central assistance on a 70 per cent loan and 30 per cent grant basis while the North-east states get such support on a 90 per cent grant and10 per cent loan basis.
And, at 1999-2000 prices, the per capita GSDP of Assam at Rs 15.804, Tripura( Rs 21,431),\ and Mizoram (Rs 20,970) are well above Bihar’s low of Rs 7,188. Thus the case for a larger and long-term central support for Bihar is strong. The last factor that raised hopes for a better future is that Bihar agriculture is looking up, registering an annual growth rate of 4.6 per cent during 1995/6-2002-2003, which is among the highest, while the all-India agriculture growth rate was only 1.8 per cent .This is reflected in higher fertiliser use — 110 kg of NPK per hectare as against 37kg/hec in Assam and larger coverage of irrigated area (47.6 per cent of cropped area as against 14.3 per cent in Assam), consumption of power, use of high-yielding varieties and much higher average yield of major crops per hectare such as rice, wheat, maize and sugarcane as compared to the North-est.
However one must note the continuing unequal land relations in Bihar, lack of any serious effort towards land reforms, especially securing the rights of tenants and share croppers forcing thousands of landless and the poor artisans to migrate to urban areas outside the state because Bihar’s urban centres have not grown as centres of vibrant industries as in South India- a feature unfortunately common to urban centres of Eastern and North-east India.
Will the North-east derive any benefit from this Bihar story? Yes, in some areas such as planning and fixing priorities in development. In the North-east state plans have been routinised for want of resource crunch that Bihar faced, entirely due to generous central support in unrelated to plan performance. The regional planning efforts of the NEC are repetitive with funding of infrastructural projects in road and power sector without addressing the basic issues of sustainability, natural resources conservation and climate change imperatives. Thus Bihar’s success in completing incomplete projects and linking infrastructure to markets and growth centres will be worth emulation. In developing human capabilities, also Bihar’s accent on competitiveness and excellence must be noted as against the North-east culture of “reservation†of seats and jobs even in teaching profession where teachers merit is first condition to be satisfied for providing high quality education capable of churning out skilled personnel. The fact that despite its large network of universities and S&T institutions, the North-east is way behind in science and technology, entrepreneurship and management shows limitations of our existing policies. Thus state planning boards and NEC must be restructured to play their rightful role as in Bihar and be able to draw up a development strategy in keeping with the region’s capabilities with the objective of phased reduction of its abject dependence on the Centre. One way to do so is to review the low property and municipal tax regime in the region, introduce urban taxes, income tax for tribals, stamp duties and user charges for facilities in keeping with the rising property prices and enforce collection strictly.
Bihar has also streamlined its collection of sales tax and other state revenues supplemented by effective cost reduction measures and improving the functioning of power, irrigation and transport utilities. This holds out a good model for the North-east states. For all this to happen the most important factor is “the will of the stateâ€. Bihar’s political and administrative leadership seems to posses this quality in good measure.
This is a welcome development as high growth in Bihar will give a boost to neighboring areas like Sikkim, North Bengal and West Assam could become a compact economic zone, with improved connectivity. The region could absorb surplus horticulture, and value- added products and promote investment.
In tourism, agro-based industries, petro-chemicals and even in medical tourism and education it can become a part of look East policy initiative. One hopes that the high growth in 10th Plan in Bihar and Orissa, will lead to a revival of eastern regional economy and greater integration of North-east states inthis emerging economic order.
The writer, a former IAS officer of Assam Meghalaya Cadre, is a Scientific Consultant in the Office of the Principal Scientific Adviser to the government of India