Bihar development report 2010
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Bihar development report 2010

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Bihar struggles against an image problem that is deeply damaging to its growth prospects. However, the situation has changed in recent years. This section presents an objective assessment of the ...

Bihar struggles against an image problem that is deeply damaging to its growth prospects. However, the situation has changed in recent years. This section presents an objective assessment of the socio-economic progress made by the state particularly in the last five years. Two critical questions have been dealt with in depth – (a) what has changed in the state during 2005-10? , and (b) what implications does this change hold for the future?

A state-level comparative analysis is done under the following heads.

i) Economic Indicators
• State GDP Growth Rate
• Sectoral Growth
• Consumer Markets
• Investment Scenario
• Central Grants and Social Sector Expenditure
ii) Social and Development Indicators
• Law and Order
• Infrastructure and Communication
• Poverty
• Education
• Health
iii) Other
• Tourism
• Agriculture

The overall analysis gives positive signals, Bihar is gradually treading on the path of development.

A. Economic Indicators

a) GDP Growth Rate in Bihar (2004-05 to 2008-09)

The state's economy has never grown so fast and so consistently as it has since 2004-2005. The Central Statistical Organization (CSO), in a report released recently, placed Bihar in the second place in terms of growth in the Gross Domestic Product (GDP) between the years 2004 and 2009. On an average, Bihar registered a double digit GDP growth rate of about 11 percent over the period 2004-09 (Figure 2.1 and Table 2.1). According to Swaminathan S. Anklesaria Aiyar , ‘this economic boom in Bihar is real and not a statistical fudge’.

Figure 3.1: GDP Growth Rate Trend

Source: CENTRAL STATISTICAL ORGANIZATION (CSO)
Table 3.1: GDP Growth Rate (2004-05 to 2008-09)
Year GDP Growth Rate (in % per annum)
2004-05 12.17
2005-06 1.49
2006-07 22.00
2007-08 8.04
2008-09 11.44
Average growth (2004-09) 11.03
Source: Central Statistical Organization (CSO)

Arguably, Bihar had been performing so badly for so long that it may just be enjoying catch-up gains. In other words, this high growth is coming on a very low base. In fact, four of the poorest states — Bihar (with 11.0 percent GDP growth), Orissa (8.7 percent), Jharkhand (8.5 percent) and Chhattisgarh (7.4 percent) — qualified as miracle economies, going by the international norm of 7 percent growth. This is indeed a remarkable achievement. However, sustainable growth would only be ensured in the State when the economy is well-diversified and the volatility in year on year growth is robustly tackled.

According to the Bihar Economic Survey 2009-10, the main growth sectors have been construction, communication and trade/hotels/restaurants. The annual growth rate for these high-growth sectors was 35.8, 17.7 and 17.7 percent respectively, way above the overall average rate of 11.0 percent. Further, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Bihar GDP is estimated to reach Rs 2,64,781 crore from the current level of Rs 1,05,148 crore, mainly due to the positive boost from good governance.

b) Sectoral growth:

With the process of growth and development, there is a structural change in the sectoral share of income, the main focus of an economy's activity shifts from the primary, through the secondary and finally to the tertiary sector. Further, this is accompanied by a shift in employment from the primary sector to the other sectors as surplus labour moves to more productive avenues of employment.

Bihar’s economy is witnessing a shift towards services, much before industrialization, mostly driven by a buoyant urban economy. This is growth induced by the government. The share of the tertiary sector in GSDP grew in Bihar from 51 percent in 2001 to about 60 percent in 2007-08, while the secondary sector showed a marginal increase in share from about 11 percent to about 16 percent (Figure 2.2). The primary sector has witnessed a decrease of 13 percentage points in its contribution to the state income.

Table 3.2: Sectoral shares in GSDP (

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Bihar development report 2010 Bihar development report 2010 Document Transcript

  • nd Indicus Analytics Pvt. Ltd., 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • BIHAR DEVELOPMENT REPORT 2010 SUBMITTED TO PRABHAT KHABAR July 2010 Indicus Analytics Indicus Analytics Pvt. Ltd. Page nd 1 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Data Qualification Objective analysis of the performance of a state requires quantitative information that allows for comparison on various indicators with other states and across time. There are many caveats while doing so, however, as the availability of data that meet stringent standards is not assured in many cases. Estimates of the growth of the economy, for instance, is released by state governments on a provisional basis for the latest years and is revised once final numbers come in from various sources. Final revised estimates therefore follow provisional estimates with a gap of a few years. There are also delays in release of data and this report utilises the latest available data, though it may be provisional and may seem old. There is an added constraint in this report when it comes to data from states that were broken up in 2000 – data from pre-2000 usually is available only for the combined states, while data from post- 2000 is available for the states separately. Comparison across time needs to account for this divergence. As far as fiscal estimates go, this report uses the revised estimates of state budgets for the previous years, rather than budgeted estimates for indicators related to expenditure incurred by the state government on various sectors like education, health etc. This gives a more accurate picture of the finances of the government, than the budgeted estimates. While all data have been taken from credible government sources, all care has been taken to validate the data. Indicus Team: Ankur Gupta, Sumita Kale, and Peeyush Bajpai Indicus Analytics Pvt. Ltd. Page nd 2 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Data Qualification ................................................................................................................................. 2 Section I.................................................................................................................................................. 4 Changing Bihar’s future .......................................................................................................................... 5 Resurrection of the State .......................................................................................................................... 8 The New Bihar of 2010s: Strengthening the Ethical Environment ....................................................... 13 Ray of Light Emerging in Bihar............................................................................................................. 17 Deprivation to Development................................................................................................................... 21 A Job Well Begun ................................................................................................................................... 26 Section II............................................................................................................................................... 30 Reviewing Growth and Development of Bihar (1985-2005) .................................................................. 30 Section III.............................................................................................................................................. 41 New Era in Bihar (Post 2005 till Date)................................................................................................... 41 Section IV ............................................................................................................................................. 77 District Profile of Bihar.......................................................................................................................... 77 Bibliography......................................................................................................................................... 93 Indicus Analytics Pvt. Ltd. Page nd 3 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Section I In the last five years there have been a number of instances that point to a revival of Bihar. It seems from various indicators that Bihar is preparing itself to shed the "BIMARU" tag. It will take consistent effort and time to catch up with the other states. This section includes seven essays contributed by eminent thought leaders. These essays focus on the success stories, the problems being faced, the lessons to be learnt and the way forward for Bihar. Indicus Analytics Pvt. Ltd. Page nd 4 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Changing Bihar’s future Ashok V Desai Ashok V Desai is a Senior Economist and Consulting Editor with Business World. His columns are an authoritative commentary on economic events in India. Before his journalistic career, Desai served as Chief Consultant in the Finance Ministry from 1991 to 1993, and helped design the early economic reforms. In the 1980s, Desai coordinated a large survey of energy research for International Development Research Centre in Ottawa. Earlier, he worked as an economist in National Council of Applied Economic Research in Delhi, where he carried out policy-oriented industrial studies, especially studies on technology development and transfer. India has an elaborate array of statistics. But they are fitted into economic categories that tell us little about how people live and work; and they are published with such long delays that they tell us little that is topical. Price statistics are the only ones that are up to date; and man does not live by prices alone. In the circumstances, we think of people and states as stereotypes, such as that Madrasis are thrifty and Bengalis are lazy. There is usually a modicum of truth behind these stereotypes – at least historical truth – but they are useless for any analysis, let alone any practical thinking. Thus, Bihar is stereotypically a poor state with rich natural resources. Its people talk a lot but achieve little. Nothing much happens in their state, and they go to other states to find work, mainly manual work. This generally unfavourable impression has recently acquired a discordant corollary – that it has one of India’s most honest, dedicated and industrious chief ministers, under whom it has achieved GDP growth that would be the envy of any state. Indicus Analytics Pvt. Ltd. Page nd 5 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • There was a time when I saw a good deal of Bihar, though it is long ago. During the famine of 1966, I went and worked with Jaiprakash Narain who had organized mass feeding programmes. The landmark of Patna that I remember most vividly is the Golghar. This 90ft-high, egg-shaped structure was built in 1786, the year of another famine, to store grains for the British army. Coolies would go up a spiral staircase and pour grain through a hole at the top; and it would be removed through vents at the bottom. Our organisation kept receiving grains from all over India by train; I used to go to the station to keep a watch on the unloading. There was much grain arriving on government account; the labourers who unloaded it pilfered a lot, both at the station and from warehouses. We did not allow pilfering; so labourers used to eat the rice. They carried hooks to dig into gunny bags and lift them; they would tear the bags with the hook and eat the rice raw as it poured out. The villages were eerie; they had only women and children. All the men had left the villages to find work elsewhere (this was before the green revolution). One reason was that the government and charities fed only women and children; there was a strong belief amongst them that men should look after themselves. I do not remember men looking after themselves by theft and robbery; Bihar was not known for crime then, although landlords had gangs of strongmen, and they were surely not paid for being nice. The famine was disastrous for education, for schools were turned into food outlets, and teachers were turned into kitchen managers and cooks. That was the last famine in Bihar. The 1987 famine was equally serious; I remember seeing thousands of cattle leaving Gujarat for Madhya Pradesh and for slaughterhouses. But Bihar was hardly affected. Its economy has become more robust. I suspect one reason is that, paradoxically, many more Biharis work outside Bihar. More than a half of Delhi’s population of nearly two crore is Bihari. Many Biharis have settled down in Punjab. A taxi driver in Bombay or Calcutta is more likely to be a Bihari than an indigene. All these migrants send money home; apparently there are agents Indicus Analytics Pvt. Ltd. Page nd 6 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • in Bengaluru with cell phones who offer taxi drivers overnight money transfer to their families in Bihar. I remember coming across a Bihari engineer on a flight. He owned some 200 acres near the Nepal border; most of it was fallow because he could not get labour. Altogether, Bihar is more prosperous today because it receives much larger transfers from Bihari migrants. Some people would lament this. For them, development is not of the people but of a territory. They would like to see many more factories and offices all over Bihar. To me, what matters is what people consume and enjoy, not what they produce. But if I had to think like these people, the industry I would think of for Bihar is fish or water chestnuts. Both require fresh water, of which most of India is short, so Bihar would have little competition in producing them. In southern China, every farmer has a fishpond next to his house. If Biharis took to fish culture, they could not only improve their diet, but they could supply the rich urban markets of north India. Such is my out-of- the-pond thinking for Bihar. Indicus Analytics Pvt. Ltd. Page nd 7 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Resurrection of the State Shaibal Gupta Shaibal Gupta is a prominent social scientist and founder member-secretary of Asian Development Research Institute (ADRI) in Patna. The areas of his research interest have been guided more by the development problems of Bihar rather than his own intellectual predilections. His research interest is to promote development research that is more user-oriented than the academic output of typical research institutions. His research interest now transcends beyond Bihar and encompasses the entire Hindi Heartland and the eastern Indian states. Nitish Kumar has completed four and half years of his reign in Bihar. Only a few months are left before he faces the assembly elections in Bihar in November, 2010. Even if the present pace of development initiated by Nitish continues without any electoral destabilization, it will take years before Bihar can hope to reach any front ranking state in the country. However, Bihar which was on the verge of being written off by the national elite and the media has already experienced a dramatic change, not only in the level of perception, but in the realm of actual development too. Bihar will no more be referred under the contemptuous rubric of a BIMARU state. When the mantle of the state was electorally thrust on Nitish, he inherited a ramshackle state structure which had no history of work, coherence and dynamism, not just during the previous regime, but during the entire last century. In this background, among many of his political achievements, the most substantive one is probably the task of state building in Bihar. The growth agenda of Bihar could be pursued, even in the absence of an institutional memory of development, provided a few other conditions were favorable. But the retarded civil society, non-existent corporate sector, largely uninformed political opinion and an intelligentsia with a none too wide cognitive world, all together could not understand the critical role of a strong state structure, the main fulcrum of a growth process. Thus, the task of state building could not become the prime Indicus Analytics Pvt. Ltd. Page nd 8 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • agenda in Bihar in the post-independence period and, in the process, development remained a casualty. For any regime that comes to power through a democratic process, development must be its core agenda. The trajectory of governance is then essentially woven around it and its success is measured in terms of creating new economic and social benchmarks. This script of governance with the thrust on development is relatively easy for a regime, either national or provincial, provided there is a functioning state structure. As Nitish Kumar did not inherit such a structure, he had to build it all by himself. It is a matter of social science research as to why the elites in Bihar, largely wedded to feudal landed interest, or the galaxy of Chief Ministers who ruled the state in the last six decades, could not feel the disadvantage of a non-functioning state. In contrast, Nitish did feel its absence immediately after taking over the reigns, owing primarily to his wide national and international exposure developed during his stint in the Union Cabinet for years. He had got elected to the Parliament six times and held various important portfolios in the Central Government with élan and distinction in railways, agriculture, road transport, etc. So he could not have been satisfied with a 'Bihar- centric' sloth, ignoring the national trajectory of development. As Nitish was considered to be a dynamic and successful Minister at the centre, he was keen to replicate his successes in the governance of the state as well. For the first time, therefore, Bihar was being calibrated from inside vis-à-vis national parameters. He could go about his job of state building with clinical precision. Even though an engineer by training, his predilections were not techno-managerial, his understanding of an inclusive growth was shaped by his ideological grounding in the socialist movement and the wider world view. In the last sixty years, the building of the state structure was nearly complete in most regions of the country and at the centre. The first task in this process was value addition to the inherited colonial administration, apart from reinventing the chain of command for the development administration, parallel to the general administration. Over and above, it also entailed administrative reforms and Indicus Analytics Pvt. Ltd. Page nd 9 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • creation of new institutions to serve the development agenda. Such strengthening of the state and the consequent economic development would have led to a growing market structure. This important gap is being filled now in Bihar. A well-oiled state structure was not absolutely needed for enforcing the ‘rule of the law’, without which neither social justice nor economic development could be possible. An under governed province like Bihar needed both ‘law’ and ‘order’, essentially a demonstration of the authority of the state. This new grammar of governance in Bihar is now being provided and one of its important dimensions is the ‘conviction rate’, mediated through the speedy trial in the courts. It is reported that 47,000 criminals have been convicted in the recent years, a number of whom have been given the death sentence, life imprisonment and sentenced for 10 years or more. The impact of better governance was visible in the state. An analysis of the Bihar economy indicates that in the last four years, it has shown considerable growth rates in three sectors viz. construction, communications and trade, hotels and restaurants. The dramatic GSDP growth in Bihar, which generated a national and international interest, was not a flash in the pan. The growth rate of the GSDP in Bihar during 2004/5 to 2008/9 recorded 11.35 percent which was much higher than what it was during the preceding five years. This was not totally unexplainable phenomenon, because the total plan expenditure of Bihar at Rs.4899 in 2005/6 has more than trebled in the first three years of the present government. In 2008/9, it stood at Rs. 15746 crore. For the current year, the plan size of Rs. 20,000 crore for Bihar has been approved by the Planning Commission. Essentially, the growth in Bihar presently is construction centric. On the industrial front, small and medium scale enterprises are predominant in Bihar. But, after declaration of the new liberalized industrial policy by the state government in 2006, a number of proposals for setting up medium and large industries has been received which are likely to materialize in near future. However, a number of industrial ventures related to power and sugar for Indicus Analytics Pvt. Ltd. Page nd 10 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • establishment in the state will need support from the Government of India. For example, establishment of power projects in the state will need clearance of coal linkages from the central government. Efforts are also being made to tap into the food processing and agro-based industries that carry a great potential in the state and can become a major source of income and employment generation. The functioning of the banking sector again has shown improvement, resulting in higher commercial activities and increased credit-deposit ratio. There are major achievements in social sectors as well, especially education and health. For example, the enrolment in primary schools (especially for the scheduled caste children) during the last four years has increased considerably. The crowning achievement in the realm of asset building exercise in the state is revealed by the sterling performance of Bihar State Bridge Construction Corporation Ltd and Bihar State Police Construction Corporations. The plethora of bridges and police stations built in the state in the last four years is really unprecedented. Incidentally, both these corporations were on the verge of liquidation during the previous regime. A visible impact of such heightened economic activity has been a significant drop in the out migration of workers from Bihar. In the arena of public finance, the fiscal performance has improved through rationalization of expenditure, effective debt management and improvement in the quality of expenditure. While the growth of revenue expenditure has been kept to the minimum, the capital expenditure is growing fast, the latter now accounting for about one-fifth of the total expenditure. Incidentally, the present government is working out the nuts and bolts to ensure that the per capita developmental expenditure of the state matches the national average by 2015. It will not be out of place to state that after years of isolation, the economy of Bihar is likely to get integrated with the national and possibly international economic grid in future. The state of Bihar is poised for a turnaround and will be the most happening state in this part of the country. Bihar could become role model for most of the land-locked states of the Hindi Heartland. The problem of governance is universal in the Hindi Heartland states. Bihar has displayed to the world that with marginal improvement in the quality of governance, even a moribund state could Indicus Analytics Pvt. Ltd. Page nd 11 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • get resurrected. Without a resurrected state, the economy of the state will not leap frog. Unfortunately, the tripod of state, market and civil society, a necessary precondition for economic growth, is relatively weak in the state. While the functioning of the state has improved substantially, the other components of the tripod need to be strengthened. We hope in the next couple of years, we shall banish our developmental deficit authentically. Indicus Analytics Pvt. Ltd. Page nd 12 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The New Bihar of 2010s: Strengthening the Ethical Environment Laveesh Bhandari Laveesh Bhandari is the Founder Director of Indicus Analytics. He has led policy-oriented studies for nationally and internationally reputed organisations such as the Finance Commission, World Bank, United Nations Children’s Fund, Asian Development Bank and Food and Agriculture Organization. He has published extensively and is a columnist for newspapers and newsmagazines. His work on inequality, education and regional growth is frequently referred to in policy debates in India. He has received a number of awards, including the EXIM Bank Award for his work on international joint ventures and the Hite Fellowship for his work on international finance. As a new decade starts, Bihar is leaving behind a history of slackness and entering into a new phase marked by energy and dynamism. The government can no longer be characterized as lazy and vision-less, the state can no longer be identified as uninterested in its own people. It seems that Bihar has decided to go on a path that will take it into a completely new world. It is not used to this path, has little experience in, and will need to devise new ways of doing new things. True international and national consultants may fly in regularly, NRBs (Non-Resident Biharis) long gone away, may come in to help out. But in the end the new Bihar will be built by those who have lived through bad times and good in Bihar itself. What is the single biggest challenge facing Bihar today and in times to come? Many say it is lack of adequately educated trained human capital; but that is only a temporary problem – human capital moves wherever the opportunities are, and as Bihar grows human capital will come in. Others say it is lack of finances, but that also goes where the opportunities are and will also come into Bihar as time goes by. Still others say it is lack of infrastructure, but that is a medium term problem at best. Some also say it is a problem of ineffective state government machinery; but there are solutions to this problem as well that take some time to yield fruit. Note that I am not saying that these are not Indicus Analytics Pvt. Ltd. Page nd 13 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • difficult challenges, they are. But there is another challenge that Bihar, like any other rapidly growing economy, will need to address. In my mind the most important issue for any society including Bihar is that of maintaining and strengthening ethical practices. These include ethics in government and in business, in relationships between individuals and between organizations, ethics in citizen-state interaction and in commercial relationships. Ethics are important not merely because the religious texts and those who have lived life to its fullest tell us so. Ethical practices are a very practical solution to the various pulls and pressures that affect individuals and organizations. Without them we can very easily go down a long downward spiral that any amount of government action or investment cannot get us out. Economic research has shown in many different ways that ethical actions are the very foundation of market forces. Without those, markets don’t function, private or public enterprise fails, costs increase and any progress – whether social or economic is unsustainable. The classic example is that of Russia where despite a great base of human capital, rich natural resources, and good infrastructure, economic growth did not follow after the unravelling of socialist institutions. Somehow the markets just could not deliver. The latent energy of a great country got diverted towards quick short cuts, greed and selfish gains. A few people in the government and in the private sector gained untold riches but a whole country is still suffering. Why does this happen? As opportunities arise there are two ways of dealing with them. The first is individuals quickly react by trying to get as much of the new pie as they can get for themselves. The second way is groups of individuals work together to ensure that such opportunities continue to arise and they are willing to share in the effort and benefits of such opportunities. The latter will Indicus Analytics Pvt. Ltd. Page nd 14 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • necessarily have to work in a cooperative ethical manner; the former in most cases will end up in some kind of an unethical action or the other. Why are markets so dependent upon ethics? In the absence of ethical practices there are many different kinds of market failures. If markets fail, either transactions do not occur, or for transactions to occur companies and governments need to create counteracting mechanisms to reduce the impact of unethical practices. Creation of complex contracts, greater regulation, monitoring, greater dependence on third party arbitrators and the judiciary are only some examples. These are very costly and lead to high level of economic inefficiency. Moreover in areas or sectors where the level of unethical practices are high, the time and effort costs incurred in finding the right partner also are very high, and sometimes these areas or sectors are avoided altogether. Hence markets work best where the level of ethics are best. And growth is highest in such areas - be it at the level of an individual, organization or the economy. But despite such well known positive impacts of ethical practices and despite the teachings of all religions and gurus, unethical practices abound. Why? Here as well economic theory provides many insights. • First, those who expect to be in a repeated and long term relationships are less likely to resort to fraud and cheating. The reason is simple, if one practices unethical behavior once, the long term relationship will end. • Second, those who want quick returns are more likely to practice unethical behavior than those who are in it for the long term. This is because unethical behavior is found out and eventually adversely impacts long term relationships, though it gives instantaneous benefits. • Third, unethical behavior happens much more in areas where there is a large turnover of people. For instance in politics a lot of new people keep on entering and exiting, hence long term relationships are difficult to maintain. Indicus Analytics Pvt. Ltd. Page nd 15 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • But there is also another facet of ethics. Societies that do not punish unethical behavior fail to prosper. In other words, just waiting for god or the government to punish unethical actions is not enough. Individuals and organizations need to be constantly aware of unethical practices and the response needs to be swift and even. Punishment of the unethical is a critical element of strengthening ethical practices. In conclusion, as funds will flow into Bihar, as investments are made in land, labour and capital, the people of Bihar will face a new wind of opportunity. After having been debarred of such opportunities for so many decades, some may want to benefit from gains at the cost of others, some may stop thinking of the long term, and many may want to make a quick buck. Such people need not be only in the government; even in the private sector, in trade, industry, services or agriculture, the lure of quick riches can be a powerful motivator that could lead Bihar in a downward spiral. Merely depending upon the government to address this problem will not be adequate. Every individual will need to guard against it and not accept it – whether the action is by a colleague, friend or family. Indicus Analytics Pvt. Ltd. Page nd 16 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Ray of Light Emerging in Bihar Sumita Kale Sumita Kale is Chief Economist with Indicus Analytics. She received her Ph D from the University of Pune and M Phil in the Economics of Developing Countries from the University of Cambridge. She has a number of publications to her credit and has been visiting faculty at the Department of Economics, University of Pune and at the National Insurance Academy, Pune. A state that is usually in the news for the wrong reasons, Bihar has stunned the country by turning in a superlative growth performance, averaging 11.4 percent annual growth over the five year period starting 20004-05. There are many sceptics to this growth story - reservations over whether the data has been fudged and doubts over the sustainability of such high growth. The first thing to note is that this data is as reliable as other estimates that come through the Central Statistical Organisation. There is of course the caveat that these are provisional estimates, till the state governments release final estimates through the CENTRAL STATISTICAL ORGANIZATION (CSO), and such revisions can continue well into the next few years - for now, these estimates cannot be doubted. The sectors powering growth in the state are construction at 35.8 percent growth per annum in the five year period, compared to 8.4 percent growth in the previous five years and services at 11.5 percent compared to 5.4 percent previously. This data actually corroborates anecdotal evidence coming in from Bihar of improvements in governance and boost by government spending on infrastructure, particularly road construction. The Nitish factor is seen to have worked post 2005 - while all states in India have grown faster in the last five years, it is Bihar that has made the largest jump. Indicus Analytics Pvt. Ltd. Page nd 17 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • According to the latest Economic Survey 2009-10, growth has raised connectivity in the state dramatically. Tele density has risen from 5.34 percent in 2006 to 22.18 percent in 2009. Internet connections in rural Bihar are up to 4.99 lakh in 2009-10 compared to 0.43 lakh in 2008-09. Two districts - Muzaffarpur and Khagaria - have the highest number of broadband and dial up connections. Road connectivity is a crucial achievement in Bihar. About 2,417 km roads were constructed in the state in 2008-09 compared to 415 km in 2005-06. The survey also pointed that the improvements in Bihar have been validated by a rise in tourist arrivals – the state attracted 3.46 lakh tourists in 2008 compared to 61,000 in 2003. Bihar has definitely changed for the better. Yet, the question remains whether such double-digit growth is sustainable over the long term? This is a difficult question to answer as it depends on so many factors. To begin with, this growth comes on a very low base. Even after leading the growth charts amongst states in India, Bihar’s per capita income at Rs. 12,643 in 2008-09, a third of the national figure of Rs. 37,490, is still the lowest in the country. The state government understands well that the achievements so far just mark the beginning and much more needs to be done to consolidate the fruits of this growth. As Deputy Chief Minister Mr. Modi said, ‘If Bihar continues with 11 percent growth rate for the next 15 years, then we will achieve Maharashtra’s current SDP. And by that time, Maharashtra’s SDP will be threefold of what it is today. So, we have a long way to go.’ Sustainable growth is a dream unless the economy is well-diversified and the volatility in year on year growth is a worrisome feature of Bihar’s economy that needs to be tackled. A look at the graph on annual growth will show how growth fluctuates from year to year. The reason behind this volatility is that Bihar’s economy has not diversified enough over the last few years. The share of agricultural sector in the economy has been declining over the last decade but still accounts for almost a quarter of Bihar’s income. A lot needs to be done in irrigation, flood control and drainage schemes to keep agricultural output from suffering tremendous fluctuations. Indicus Analytics Pvt. Ltd. Page nd 18 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • More importantly, manufacturing accounts for just 4-5 percent of the state income, with the major share coming in from the un-registered sector. That is, organised manufacturing still accounts for just under a quarter of manufacturing activity in the state. What the present government has managed in Bihar so far has been to improve the law and order position and raise the feasibility of investment in the state. The government has attracted significantly larger investment proposals recently, but these need to be converted into actual production facilities on the ground. In a recent note on economic prospects at the regional level, global research agency Moody's Economy.com noted Bihar's stunning economic performance as an example of how government policies help accelerate growth. The note went ahead to say, "If Bihar shows how good regulation can accelerate growth, neighbouring West Bengal highlights how bureaucratic roadblocks and firmly entrenched special interests can inhibit it." The tragedy of West Bengal today is that it is being pulled out as an example of bad governance and constrained growth. Is this a fair picture? It is true that West Bengal has posted the second lowest growth in the decade amongst large states. On the other hand, growth has been steadily rising; per capita income at Rs. 31,722 in 2007-08 was way higher than Bihar’s Rs. 11,135 that year. More importantly, on all social indicators, West Bengal outperforms Bihar. The problem is that while Bihar is a state that had been practically given up as a non-achiever, and has therefore surprised observers, West Bengal has been performing far below expectations, per capita income currently trails the national average. As one of the leading industrial states in the 60s, West Bengal ranked with Maharashtra amongst the rich states in the country. While the state has lost much ground in the decades since then, the manner in which Singur and Nandigram were dealt with recently has created an atmosphere of uncertainty that is not conducive for investment and growth opportunities. The experience of Bihar and West Bengal show that things cannot be taken for Indicus Analytics Pvt. Ltd. Page nd 19 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • granted – states that were once leaders can fall back, while states that were laggards can turn the corner and shine. In the last five years, the state of Bihar has shown that change is possible. Bihar’s achievement has given the people of the state hope and confidence that good governance can move the economy on a high growth trajectory. Indicus Analytics Pvt. Ltd. Page nd 20 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Deprivation to Development Bibek Debroy Bibek Debroy is Professor at the Centre for Policy Research, New Delhi and Contributing Editor with the Indian Express. He has worked in academic institutes, for the government and an industry chamber. He is the author of several books, papers and popular articles. His special interests are education, health, law, governance and trade. Anga, Videha, Magadha, Vaishali, Nalanda, Vikramshila, Pataliputra – these are names that resonate in history. On 27th May 2006, Prime Minister Dr Manmohan Singh delivered a speech at the International Conference on Agriculture for Food, Nutritional Security and National Growth.1 In that speech he stated, “We do need a lot more attention to be paid to the management of our agricultural research and technology system. We must also ponder why is that Bihar which was chosen to be the original location of the Indian Institute of Agricultural Research, why it has failed to catch up with the rest of the country? Bihar, in 1950 was described as the second-best governed state in the very famous Paul Appleby Report. From that point, from that benchmark where Bihar is today in terms of its absorptive capacity? This is worthy of exploration, why a state like Bihar has not been able to catch up with the rest of the world?" Let us dispose of Paul Appleby first. Paul Henson Appleby (1891-1963) visited India in 1952, 1954, 1956 and 1960-61. As a consultant to the Ford Foundation, he produced his first report in 1953, titled, “Public Administration in India: Report of a Survey”. And there was a second report in 1956, titled, “Re-examination of India's Administrative System with Special Reference to Administration of Government's Industrial and Commercial Enterprises.” There was no Paul Appleby Report in 1950. The year should have been either 1953 or 1956. Where in his two reports did Appleby rank Bihar as 1 http://pmindia.nic.in/speech/content.asp?id=341 Indicus Analytics Pvt. Ltd. Page nd 21 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • the second-best governed state? There is no such mention. Strictly speaking, the subject of the second report had nothing to do with ranking states. If Appleby had undertaken such a ranking, it should have been in the first report. And certainly in the 1950s, this business of cross-country or inter-state rankings wasn't that fashionable. Governance wasn't the buzzword it is now. Nor was there any literature on what variables to include in governance and how to weight and aggregate them into an index. Appleby also published three papers in the “Indian Journal of Public Administration” at around the same time and there is no such ranking of Bihar in these three papers either. Consequently, the stuff about Appleby ranking Bihar so high in the early 1950s is just an urban legend and the Prime Minister's speech-writers should have known better. But it is a good story and captures Bihar's relative slippage not only from a historical period, when it was the cradle of civilizations, empires, religions, educational centres, administration and prosperity, but also from the 1950s. Had a governance ranking been undertaken in the 1950s, Bihar, and even Uttar Pradesh, would have figured at the top of the league. By any criterion, Bihar is towards the bottom. Published in 2001, the Planning Commission's “National Human Development Report” is dated now.2 Nevertheless, it illustrates the point. The human development index (HDI) was computed for 15 major States in 2001 and Bihar was ranked the 15th.3 Every year, a cross-State ranking is undertaken by Bibek Debroy and Laveesh Bhandari for “India Today”, spanning a large number of variables spread over several heads. Irrespective of the head (or the variable), Bihar figures towards the bottom. In 2004-05, 42.1 percent of rural Bihar was below the poverty line, a figure surpassed only by Jharkhand and Orissa.4 Bihar has become an image for everything that is wrong with the state of India's economic development and governance. Academic work and popular impression have often used the BIMARU (Bihar, Madhya Pradesh, 2 http://www.planningcommission.nic.in/reports/genrep/nhdrep/nhdreportf.htm 3 HDI is based on three indicators of education (literacy, gross enrollment ratio), health (life expectancy) and per capita income (or expenditure) and has been popularized by UNDP in its “Human Development Reports”. There are some minor differences between the UNDP methodology and that followed by the Planning Commission. 4 http://www.planningcommission.nic.in/news/prmar07.pdf. This is based on the uniform recall period and the debate about the poverty line is irrelevant for present purposes. 34.6 percent of urban Bihar was below the poverty line, surpassed by Chhattisgarh, Madhya Pradesh and Orissa. Indicus Analytics Pvt. Ltd. Page nd 22 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Rajasthan, Uttar Pradesh) nomenclature, with a pun on the word bimar, meaning ill or sick, referring to the undivided States. However, undivided Madhya Pradesh and Rajasthan are no longer as deprived and backward as Bihar and the eastern parts of Uttar Pradesh. This is important because the demographic dividend, in terms of new entrants into the labour force, will primarily accrue in the undivided States of Bihar, Uttar Pradesh and Madhya Pradesh and in Rajasthan and Orissa. India cannot hope to prosper if these regions remain bypassed and marginalized. Left-wing extremist violence or Naxalism, which feeds on development deprivation, has a significant presence in Bihar. Migration is an indicator of a region's prosperity and attractiveness. A couple of thousand years ago, Bihar was the centre of in-migration. Today, Bihar is the focus of out-migration. Why is Bihar backward and deprived and why has its relative position slipped? Legitimate points can be made about Centre-State fiscal transfers5 and the freight equalization policy, though the latter is now only of historical interest. However, the key is what can broadly be called governance, spilling over into provision of physical and social infrastructure, making public expenditure efficient and ensuring law and order. This enabling environment is critical for agriculture, industry and services.6 Given Bihar's agro-climatic zones and land, despite the flood problem, there is no reason why Bihar's agriculture should not do better. Given Bihar's natural resources7, potential transport infrastructure and strategic location, there is no reason why Bihar's industry should not do better. Given Bihar's educational infrastructure, there is no reason why Bihar's services should not do better. The reform agenda need not be restated here. Such an agenda was formulated by the World Bank in 2005, building on the pillars of improving the investment climate and social service delivery, with fiscal and administrative reforms as integral components of the latter.8 In the complex world of electoral politics, with caste a major factor in Bihar, it is not always obvious that citizens vote out 5 See, Mohan Guruswamy, Ramnis Attar Baitha and Jeevan Prakash Mohanty, “Centrally Planned Inequality, the Tale of Two States – Punjab and Bihar” and Mohan Guruswamy and Jeevan Prakash Mohanty, “De-urbanisation of Bihar,” both published by Centre for Policy Alternatives, New Delhi, in 2004. 6 The share of industry in gross State domestic product is remarkably low in Bihar. 7 Though some have gone to Jharkhand. 8 Bihar, Towards a Development Strategy, World Bank, http://siteresources.worldbank.org/INTINDIA/Resources/Bihar_report_final_June2005.pdf. Indicus Analytics Pvt. Ltd. Page nd 23 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • mis-governance and vote in good governance. However, it is possible to argue that the change in government in 2005 was driven by a desire to see an improvement in governance. This does not necessarily mean that good governance will bring electoral dividends in 2010. There is anecdotal evidence that Bihar has improved, on parameters like administrative delivery and law and order. This has received some support from the 2008-09 GSDP (gross State domestic product) figures. There has been a slight misreporting in some sections of media about 2008-09 real State domestic product (GSDP) growth rates. These reports suggest that at 11.4 percent, Bihar has shown the highest real growth after Gujarat. That’s not quite true, because 2008-09 data are still not available for many States, including Gujarat. Indeed, if one considers States for which 2008-09 data are available, Bihar has grown the fastest. At 10.8 percent and 10.4 percent respectively, Puducherry and Chandigarh come after Bihar. Out of 32 States and UTs, 2008-09 data are yet available only for 18, with many major States missing. Lest we forget, all-India GDP grew at 6.7 percent in 2008-09, considerably lower than 11.4 percent. A better comparison is for 2007-08, when data are available for all but Nagaland and Tripura. The all-India GDP growth in 2007-08 was 9.01 percent. Bihar registered 8.04 percent, far less spectacular than 11.4 percent. Several States and UTs were ahead of 8.04% - Andhra (10.62%), Goa (11.14%), Gujarat (12.79%), Haryana (9.35%), Himachal (8.59%), Chhattisgarh (8.63%), Maharashtra (9.18%), Uttarakhand (9.37%), Chandigarh (11.51%), Delhi (12.48%) and Puducherry (24.85%). Therefore, one shouldn’t make too much of a year’s figures, which can be subject to annual fluctuations. More important is the trend over say, a five-year period. The trouble with picking only one year is better illustrated by 2006-07, when Bihar grew by 22.0 percent. Thus, what is of note is not Bihar’s record in any specific year like 2006-07, 2007-08 or 2008-09. Nitish Kumar became CM in 2005 and political mileage is being made of the fact that in preceding year, 2003-04, Bihar declined by 5.15 percent under Rabri Devi. Ignoring such annual aberrations, between 1999 and 2004, Indicus figures show that real SDP in Bihar grew by 3.9 percent. Between 2004 and 2009, real SDP in Bihar grew by 11.3 percent. The annual decadal (1991 to 2001) rate of population growth in Bihar was 2.8 percent, though it may be lower now. 3.9 Indicus Analytics Pvt. Ltd. Page nd 24 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • percent growth means roughly 1.1 percent per capita income growth, while 11.3 percent growth means roughly 8.5 percent per capita income growth. That’s a huge difference. Regionally, one of the issues has been that States with higher rates of growth have also tended to have lower rates of population growth and States with lower rates of growth have tended to have higher rates of population growth. Therefore, in terms of inter-State disparities, per capita figures show greater divergences than non-per capita numbers. If a traditionally backward State like Bihar has broken away from past trend that is a reason for celebration. Because we are talking about trends and not year-to-year fluctuations, there is no denying that Bihar has broken away from earlier growth trajectories. For instance, in earlier bad years (2001-02, 2003-04), real SDP declined by around 5 percent. In a recent bad year (2005-06), SDP increased by 1.5 percent. Can one ascribe a State’s success to a Chief Minister and a new government? In this case, because break with the historical trajectory is so sharp, the answer is in the affirmative. Anecdotally, one knows governance, administration and service delivery have improved in Bihar, partly facilitated by a World Bank lending programme between 2007 and 2009. However, agriculture doesn’t seem to be the primary driving force. Between 1999 and 2004, real agricultural SDP growth was 2 percent, while between 2004 and 2009, it was 5.6 percent. That’s undeniably an improvement, as is the increase in manufacturing SDP growth from -1.9 percent in the first period to 8.0 percent in the second. But what is spectacular is the jacking up of construction from 8.4 percent to 35.8 percent, communication from 9.4 percent to 17.7 percent and trade, hotels and restaurants from 11.6 percent to 17.7 percent. Somewhat unexpectedly, services have been driving growth, which has what has happened in the rest of India earlier. Bihar is catching up, as with Rajasthan and undivided Madhya Pradesh earlier. However, one should also remember that there are considerable divergences within Bihar and Patna, and the area around it, is not all of Bihar. Indicus Analytics Pvt. Ltd. Page nd 25 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • A Job Well Begun Pratap Bhanu Mehta Pratap Bhanu Mehta is the President of Centre for Policy Research, a New Delhi-based think tank. He has also been appointed to New York University Law School’s Global Faculty. He has previously held Professorships at Harvard and JNU. He was Convenor of the National Knowledge Commission. His most recent publications include The Oxford Companion to Politics in India (co edited with Niraja Jayal) and The Burden of Democracy. He writes a column for the Indian Express. He is also a winner of the 2010 Malcolm Adshieshiah Award. There is little doubt about the palpable excitement that Bihar’s growth over the last five years or so has generated. But the excitement is, in equal measure, due to the fact that the last five years or so have set new benchmarks in a number of areas. Bihar gives lie to the proposition that there is something inevitable about decline in governance in poor states. Law and deterioration cannot take place without state complicity. The great achievement of the last few years has been removing the sense of state complicity in structures of violence. While Bihar’s law and order woes are by no means over entirely, the sense that the state is marked irrevocably by violent polarisation is diminishing. Bihar has made attempts to contain violence at both ends of the ideological spectrum, naxalism and upper caste reactionary groups like the Ranvir Sena. Just the number of prosecutions is impressive by any measure. The turnaround in law and order, the sense that prosecutions are taking place and increased sense of safety, suggests that any state can improve if it is genuinely committed. Second, there is a palpable sense that the state can actually do things: the construction of roads and schools, the appointments of teachers, functioning health clinics give a sense of a state making its presence felt. Third, there is an innovative attempt to create a new paradigm in politics. This new paradigm has three premises. The first is that the old paradigm of caste politics has exhausted itself; the new Indicus Analytics Pvt. Ltd. Page nd 26 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • paradigm of caste politics seeks to forge new alliances with the most deprived and those marginalised by traditional politics. The second is that politics requires deeper participatory structures, including the strengthening of Panchayati Raj. While a lot remains to be done on the ground, Bihar’s thinking has been innovative. The idea of transferring more functions to panchayat institutions, an understanding that their capacity needs to be built, and making the state visibly present through panchayat Bhawans, are all steps in the right direction. No one should be under any illusion that decentralisation and strengthening local government is at least a fifteen year project; and that things may occasionally get worse before they get better. The challenge is to stay the course. Bihar has also, with admittedly mixed results, at least been a place of governance experimentation. It has tried to make the discourse of development replace a politics of intra group resentment and recrimination. Democracy is always a work in progress. But it is after decades that such an ambitious new paradigm of politics was tried out anywhere and in any state. But the foundations of the new found optimism on Bihar remain fragile. Bihar has had periods of high growth in the past. Although there are more reasons to be optimistic this time there are serious issues that remain to be tackled. For one thing the growth largely seems to be a result of what you might call the governance effect, a rapid expansion in actual government expenditure. The most striking piece of data in the Bihar story is the phenomenal growth in the construction industry, at rates of more than fifty percent a year in the initial phase of this regime. By some estimates the share of construction in state GDP has more than doubled. Construction has great beneficial effects. It is labour intensive, and rural connectivity via roads is a necessary condition for long term growth. Even agriculture has shown improvement, the volatility in agriculture performance due to unaddressed ecological issues remains a cause for serious concern. But the simple truth is that the long term sustainable future of a state requires the opening of alternative vistas of development: industrialisation and services. It is still not very clear that these alternative horizons have opened up in Bihar. Private sector investment is still not picking up at a Indicus Analytics Pvt. Ltd. Page nd 27 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • pace that gives reason to be confident. There are fundamental reasons for this which have not even begun to be addressed. First, Bihar’s power situation remains very precarious, through no fault of its own. The uncertainty of power makes it particularly difficult for small business, which is going to be the backbone of any growth. The second issue is more subtle. No state can experience long term sustainable growth without a credible strategy for urbanisation. Almost all the consistently high growth states have urban centres that are magnets for investment, and draw and retain human capital. West Bengal tried to have an entirely rural based strategy, even going to the extent of actively decimating its urban infrastructure. In recent years it has tried to reverse the trend, but with little success. Bihar is urbanising, but the form of its urbanization, is not of the kind that will draw large scale investment. But a crucial political economy question is this. Regimes that have their base in rural consolidation, typically find it difficult to make the transition to an aggressive industrial or services sector policy. In a way, Bihar’s slow progress on this is understandable. During Nitish Kumar’s first term it had just emerged from almost a decade of active mis-governance. It needed to consolidate state institutions. It also needed a regime that had a powerful social base. But usually, as we have seen in West Bengal, the process of creating a credible urbanisation and industrial strategy generates great conflict. This is especially true in conditions where land is very scarce and highly contested. The real test of the durability of governance in a state is its ability to negotiate the land question. In a way, Nitish Kumar, again had the right idea. Some degree of land reform and regularisation of rights is desperately needed, and in principle would also have allowed the regime to further consolidate its social base. But this strategy is also fraught with risks. It risks a political backlash from some sections of upper castes. But more importantly, it has not yet been demonstrated that the state has the administrative capacity and party support to carry out this program. In West Bengal, the communist party was able to impose its writ at the local level; it is not clear that Nitish Kumar has that kind of party structure that can do serious social engineering on the land question. Indicus Analytics Pvt. Ltd. Page nd 28 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • It also is an open question therefore, whether any government, in the highly contested terrain of Bihar politics, can risk conflict by pursuing an urbanisation strategy. Despite some recent expansion, the condition of Higher Education, a vital engine for growth, remains dismal. But the difficulties of creating high class higher education projects in Bihar, are indications that Bihar will find it difficult to attract and retain an edge in knowledge industries and services that are important drivers of growth. The Nalanda project initially had great promise as a show case project that would set new standards in Indian Higher Education; it is more likely to settle into another humdrum politics. Bihar, at the moment, has renewed energy and commitment in governance. That is paying great dividends. It also shows considerable promise in creating a new discourse on participation and social justice. But, despite a job well begun, these are still precarious gains. There is also little doubt that there is a drive, energy in the people of Bihar. But it is still a long way from being harnessed to an alternative and sustainable development imagination. Indicus Analytics Pvt. Ltd. Page nd 29 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Section II Reviewing Growth and Development of Bihar (1985-2005) Bihar, India’s eighth largest state, is a state with a largely negative image. According to popular perception, Bihar is known as a state with high levels of poverty, lawlessness and corruption. It is only in the last five years that the state has been going through a slow transformation with double- digit growth, improved law and order situation and better governance. Looking at the two decades of performance before the recent growth spurt – 1985-2005 – shows that the years of neglect have given the state a very low base from which it has now begun moving up. While other states pushed ahead on the growth and development agenda throughout the last two decades, Bihar, continues to have significant growth and development challenges to overcome. The state was bifurcated in 2000 as southern districts were carved out to create Jharkhand. There is therefore a caveat when using data across the twenty year period to compare the performance of the state over time. The state includes Jharkhand districts for economic data before the nineties, while for social indicators, in the early years after bifurcation, government data do not provide for separate data for the two states. While this makes strict comparison across time difficult, the broad trends that are reflected by the data, even in aggregate, are indicative of the ground reality in the state of Bihar. As far as the impact of the division is concerned, at one level, it was expected Bihar’s problems would be compounded as the southern districts hosted a large part of the industrial establishments as well as rich mineral resources. However, with change of governance in 2005, these fears have been proved wrong. Over the period 1985-2005, the state hardly witnessed much economic growth. In 1985, Bihar’s per capita income was Rs. 1601 at current prices, compared to the national average of Rs. 2730. By 2005, per capita income had moved up to Rs. 7844 while the national average had surged to Rs. 30,526 – the gap had widened significantly. Indicus Analytics Pvt. Ltd. Page nd 30 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Figure 2.1 For the first ten years of the period under discussion – 1985 to 1995, the state’s economy grew at a mere 3.2 percent per year, while India grew at 5.5 percent. Over the second ten years – 1995-2005, growth in Bihar picked up to average 4.75 percent while the Indian economy went ahead to turn in a 6.3 percent growth per year. Clearly, not only did Bihar miss out on the opportunities that liberalisation and reforms had brought to the country, it also dragged India’s performance down as it tottered along over the years. As the gap widened between India and Bihar, the urgency to revive the state became even more overwhelming. In fact, as then-President Kalam put it, “If India is to progress, Bihar has to succeed” - India cannot afford to leave 8 percent of its population behind if it aims to achieve double digit economic growth. The high levels of migration from the state as people left to escape poverty and secure any sort of employment outside the state had deep socio- economic repercussions as this migration brought down wages in other parts of the country and induced social tensions. One of the main problems of Bihar’s growth path has been its high volatility (see accompanying graph) with several years of negative growth. Indicus Analytics Pvt. Ltd. Page nd 31 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Figure 2.2 With heavy dependence on agriculture and hardly any buffer against the vagaries of weather, agricultural output fluctuates from year to year. One reason lies in the geography of the state – though the soil is fertile, a large part of Bihar is highly prone to floods. Alternating between years of drought and floods, agricultural output has been highly volatile. Population pressures in this state have been high. The decadal growth of population for 1991-2001 stood at 28.43 percent, the highest in the country. One of the causes for low productivity is the fragmentation of land holdings and preponderance of subsistence farming. Bihar’s record in land reform has been abysmal and the lack of effective water management hindered the improvements in productivity. While on the one hand, the state has been negligent in providing infrastructure for improving returns, the lack of land reforms has led to low levels of incentive to invest in the land. Added to this is the poor transportation network and marketing infrastructure that are needed for farm output to get a better price. Indicus Analytics Pvt. Ltd. Page nd 32 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • More than 60 percent of the population lay below the poverty line in 1983. By 2005, this proportion had improved to 41 percent, however this still makes Bihar one of the poorest states in the country. The slow progress in tackling poverty leaves a higher burden going forward. The concern is that Bihar is largely a rural state – 90 percent of the people live in rural areas, indicating that rural poverty is a problem which needs to be tackled on a war footing. In fact, Bihar is the only state in India that has shown a trend away from urbanisation over these two decades – 1981 urban population constituted 13 percent of the total population, in 2001, this share was down to 10 percent. Most of the rural poor lack access to land and majority are landless labourers, depending on casual work or agricultural wages for subsistence. With 75 percent of the population engaged in the primary sector, raising the levels of agricultural growth would have major implications for poverty reduction. Hence, realising the transition away from the primary sector is a goal that remains to be achieved. However, Bihar was not in a position to build a vibrant industrial sector. Bihar’s share of private projects implemented was the lowest in the 1990s, a time when private sector in India leaped forward to take advantage of the new economic era.. From 1991 to 2006, just 7 Industrial Entrepreneurial Memorandums were implemented in the state, out of a total of 6248 in the country, generating employment for just 768 people. The state accounted for just 0.5 percent of all industrial investment proposals in the country, a pitiful record for the eighth largest state. The ratio of implemented projects to those proposed was 6.7 percent, lower than the national average implementation ratio of 9.2 percent, showing the significant problems faced in getting even the few proposed projects off the ground. While the private sector tended to stay away given the poor law and order situation, public investment was on a decline as low growth and income leave little scope for revenue realisation for the administration. High levels of corruption and inefficiency meant that even though the state received large transfers from the Central Government, funds were left unutilised. Weak infrastructure of roads, telecommunications, power etc., weak financial markets, Indicus Analytics Pvt. Ltd. Page nd 33 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • lack of skilled manpower and very little political commitment to make the requisite changes resulted in a vicious circle that made it difficult for industrial investment to penetrate. Likewise, the services sector also was not well-developed. While the sector did generate 17 percent of employment, in 2005, the largest share of income was generated by public administration, showing the lack of private sector involvement. 20 percent of the services sector was from public administration, in neighbouring West Bengal, this share was just 9 percent. More significantly, the sectors of banking and insurance which contributed 22 percent to West Bengal’s services sector, formed just 10 percent of Bihar’s income from the service sector, a pointer to low access to financial markets and credit in the state. Overall, the state economy was not well-diversified, leaving little opportunities for the people for gainful employment. Table 2.1 Share of employment in 2004 Primary State Sector Secondary Sector Tertiary Sector Bihar 75 8 17 Uttar Pradesh 75 10 15 Madhya Pradesh 71 14 15 Orissa 65 18 17 West Bengal 48 23 29 Source: Central Statistical Organisation It is not just that there were no opportunities for employment, the low spread of education also meant that the population of the state was not employable and had little skills. Not only did Bihar have the lowest literacy rate in the country, it also made the least progress towards enhancing literacy over the period 1981-2001. In 1991, it had the same literacy rate as Rajasthan, in 2001 Rajasthan had covered 61 percent of its population, through intensive government outreach programmes. Indicus Analytics Pvt. Ltd. Page nd 34 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 2.2 Literacy Rates (Percentage of Population) Increase in percentage of literate population States 1981 1991 2001 1981-2001 Bihar 32.3 37.5 47.0 14.7 Jharkhand 35.0 41.4 53.6 18.5 Madhya Pradesh 38.6 44.7 63.7 25.1 Orissa 33.6 49.1 63.1 29.5 Uttar Pradesh 32.7 40.7 56.3 23.6 All India 43.6 52.2 64.8 21.3 Source : Economic Survey, 2009-10 In 2001, literacy rates for men stood at 59.7 percent while that for women was 33.1 percent, both were lower than the national average literacy rate of 1991. Little wonder then that even though the human resource base is huge, the productivity in the state has been so low. In 1998-99, only 22 percent of the children in the 10 years plus age group had completed primary schooling, a clear indication that the backlog in educational attainment is enormous. The problem of poverty, access to schooling and capacity of children to remain in school are all interlinked and as late as 2002, the drop out ratio from primary schooling was almost 75 percent. Given the poor governance factor, the quality of government schools and teaching left much to be desired. A 2003 UNICEF survey of five districts over the previous three years revealed that teachers spent an equivalent of just two months in the classrooms with the children. Teacher absenteeism, lack of monitoring, involvement of teachers in government duties etc, all played a role in leaving the children un-cared for. With an acute shortage of teachers, the pupil-teacher ratio worsened over the nineties. The private sector did manage to step in to provide educational facilities, however access to these schools was limited to the urban areas. Indicus Analytics Pvt. Ltd. Page nd 35 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • On the health front again the lack of governance shows up starkly. Although surprisingly, the number of primary health centres grew 177 percent over the period 1985-1996, compared to the growth rate of 140 percent at the national level, the shortage continued to be severe. More importantly, as in the case of schools, absenteeism of staff was a regular problem. A 2003 survey showed that 58 percent of the staff was absent on unannounced visits by independent researchers. With the public health system plagued with problems of inadequate staff, lack of medicines and equipment, often without basic infrastructure of power and water etc., it is little wonder that the bulk of the population went to private doctors, if they could afford to, or to unlicensed quacks with no medical qualifications. In the absence of any sort of regular inspections, regulation or monitoring, the quality of health care at these private doctor and quack dispensaries was bound to be doubtful. That the burden of poor health facilities fell disproportionately on the poor, who formed the majority of the population in the state, added to the poor health indicators. Table 2.3 In 2004, the infant mortality rate in Bihar was 61 out of 1000 live births, while in Jharkhand it was much lower at 49. In 1992-93, the year for which combined data for both states is available, the infant mortality rate was 89.2 out of 1000 live births. Clearly, this figure masked the disparity within the state then, with the southern districts that formed Jharkhand later having better health indicators with higher urbanisation rates. In 2003 in Bihar, only a quarter of the children in the age Indicus Analytics Pvt. Ltd. Page nd 36 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • group 12-35 months were given full immunisation, showing the lack of awareness as well as difficulty in access to health care in the state. One interesting trend in Bihar has been the rise of the coverage of households with access to safe drinking water. In 1981, just 38 percent of the households had access to safe drinking water. However, by 2005-06, more than 90 percent of the households reported access to an improved source of drinking water. Unfortunately, the reason behind this high coverage lies in the definition of ‘improved source of drinking water’, which includes not just piped water or tap water, but also bore wells and tube wells, protected springs and rainwater. Though this definition is in line with established practice worldwide, if we look at just piped water as being safe, while 71 percent of urban Indian households have access to piped water, in Bihar piped water accounts for just 2 percent of urban households. While another 8 percent of urban households in Bihar source water from public taps/standpipes, the majority, 76 percent, use tube wells/bore holes. Unfortunately, the issue of ‘safety’ or quality of water is not addressed by this statistic nor by the survey. Apart from faecal contamination, there are problems of nitrates, fluoride, arsenic and salinity concentrations that are harmful for health. 15 out of Bihar’s 38 districts have been identified with high arsenic levels. Needless to say, skin lesions and cancers triggered by arsenic are a matter of concern in these areas where dependence on groundwater is high. Despite the positive statistic therefore, Bihar’s health situation remains adverse. A 2003 study by Debroy and Bhandari identified 69 backward districts in India, based on six indicators, viz., poverty ratios, hunger, infant mortality rate, immunization, literacy rate and enrolment ratios. Of those 69 districts, 26 were in Bihar, 13 in UP, 10 each in Jharkhand and Orissa, 6 in Madhya Pradesh, 3 in Arunachal Pradesh, and 1 in Karnataka. The fact that 26 of Bihar’s 37 districts were backward speaks volumes about the development in the state. In fact, from 1981 to 2001, Bihar consistently ranked the lowest amongst all on the Human Development Index, revealing the huge backlog that the state has to achieve. Indicus Analytics Pvt. Ltd. Page nd 37 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 2.4 Human Development Index 1981 1991 2001 States Value Value Value Kerala 0.500 0.591 0.638 Punjab 0.411 0.475 0.537 West Bengal 0.305 0.404 0.472 Orissa 0.267 0.345 0.404 Madhya Pradesh 0.245 0.328 0.394 Uttar Pradesh 0.255 0.314 0.388 Bihar 0.237 0.308 0.367 All India 0.302 0.381 0.472 Source : Human Development Report 2001, Planning Commission One of the most crucial constraints to both economic growth and improvements in health and education was the poor performance on most infrastructure indicators. As late as 2006, the percentage of households connected to electricity was a dismal 13 percent, the lowest in the country. Tele-density, which was the lowest at 0.12 percent in 1987-88, rose to 0.65 percent in 2000, not even touching 1 percent of the population. Over the same period, teledensity in Orissa had moved up from 0.19 percent to 1.21 percent, a commendable rise, though still with low coverage. The poverty in the state is also reflected in the asset penetration as the number of cars per lakh of population was the lowest in the country– As late as 2003, only 72 cars per lakh of population compared to 297 per lakh in Jharkhand. Little wonder then that the Eleventh Finance Commission’s Infrastructure Index for India gave very low rankings to Bihar. Indicus Analytics Pvt. Ltd. Page nd 38 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 2.5 Index of Infrastructure Development 1999 States Index Bihar 81.3 Gujarat 124.3 Kerala 178.7 Madhya Pradesh 76.8 Maharashtra 112.8 Orissa 81.0 Uttar Pradesh 101.2 West Bengal 111.3 Source: Eleventh Finance Commission Report, 2000 The main problem that afflicted Bihar was its polity. With corruption and rough politics reigning, the people of the state suffered. In 2004, the Economist magazine referred to Bihar as ‘an area of darkness’, where many people were left behind. The article said, ‘Bihar has become a byword for the worst of India, of widespread and inescapable poverty, of corrupt politicians indistinguishable from mafia-dons they patronise, caste-ridden social order that has retained the worst feudal cruelties.’ Quoting a study which covered 69 most disadvantaged of India's 602 districts of which 26 are in Bihar, it said Bihar's biggest growth industry was kidnapping for ransom. In 2005, the World Bank report on Bihar, setting forth a development strategy for the state said, ‘The challenge of development in Bihar is enormous due to persistent poverty, unsatisfactory infrastructure and weak governance; problems that are well known but not well understood. The people of Bihar also struggle against an image problem that is deeply damaging to Bihar’s growth prospects. An effort is needed to change this perception, and to search for real solutions and strategies to meet Bihar’s development challenge. The main message of this report is one of hope.’ Indicus Analytics Pvt. Ltd. Page nd 39 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The people of Bihar voted against the 15 year rule of the RJD and ushered in a new era under a coalition government, led by Nitish Kumar. The results of the past five years, documented in the chapters that follow, show that the hope has been kindled and Bihar stands a good chance of rising to contribute positively to India’s growth story, instead of being the millstone around the neck that it was for the past two decades. Indicus Analytics Pvt. Ltd. Page nd 40 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Section III New Era in Bihar (Post 2005 till Date) Bihar struggles against an image problem that is deeply damaging to its growth prospects. However, the situation has changed in recent years. This section presents an objective assessment of the socio-economic progress made by the state particularly in the last five years. Two critical questions have been dealt with in depth – (a) what has changed in the state during 2005-10? , and (b) what implications does this change hold for the future? A state-level comparative analysis is done under the following heads. i) Economic Indicators • State GDP Growth Rate • Sectoral Growth • Consumer Markets • Investment Scenario • Central Grants and Social Sector Expenditure ii) Social and Development Indicators • Law and Order • Infrastructure and Communication • Poverty • Education • Health iii) Other • Tourism • Agriculture Indicus Analytics Pvt. Ltd. Page nd 41 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The overall analysis gives positive signals, Bihar is gradually treading on the path of development. A. Economic Indicators a) GDP Growth Rate in Bihar (2004-05 to 2008-09) The state's economy has never grown so fast and so consistently as it has since 2004-2005. The Central Statistical Organization (CSO), in a report released recently, placed Bihar in the second place in terms of growth in the Gross Domestic Product (GDP) between the years 2004 and 2009. On an average, Bihar registered a double digit GDP growth rate of about 11 percent over the period 2004- 09 (Figure 2.1 and Table 2.1). According to Swaminathan S. Anklesaria Aiyar9, ‘this economic boom in Bihar is real and not a statistical fudge’. Figure 3.1: GDP Growth Rate Trend Average Annual GDP growth rate (%) 12 10 8 Average Annual GDP growth rate (%) 6 4 2 0 1984-89 1989-94 1994-99 1999-04 2004-09 Time Series Source: CENTRAL STATISTICAL ORGANIZATION (CSO) 9 Swaminomics Indicus Analytics Pvt. Ltd. Page nd 42 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.1: GDP Growth Rate (2004-05 to 2008-09) GDP Growth Rate (in % Year per annum) 2004-05 12.17 2005-06 1.49 2006-07 22.00 2007-08 8.04 2008-09 11.44 Average growth (2004-09) 11.03 Source: Central Statistical Organization (CSO) Arguably, Bihar had been performing so badly for so long that it may just be enjoying catch-up gains. In other words, this high growth is coming on a very low base. In fact, four of the poorest states — Bihar (with 11.0 percent GDP growth), Orissa (8.7 percent), Jharkhand (8.5 percent) and Chhattisgarh (7.4 percent) — qualified as miracle economies, going by the international norm of 7 percent growth. This is indeed a remarkable achievement. However, sustainable growth would only be ensured in the State when the economy is well-diversified and the volatility in year on year growth is robustly tackled. According to the Bihar Economic Survey 2009-10, the main growth sectors have been construction, communication and trade/hotels/restaurants. The annual growth rate for these high-growth sectors was 35.8, 17.7 and 17.7 percent respectively, way above the overall average rate of 11.0 percent. Further, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Bihar GDP is estimated to reach Rs 2,64,781 crore from the current level of Rs 1,05,148 crore, mainly due to the positive boost from good governance. Indicus Analytics Pvt. Ltd. Page nd 43 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • b) Sectoral growth: With the process of growth and development, there is a structural change in the sectoral share of income, the main focus of an economy's activity shifts from the primary, through the secondary and finally to the tertiary sector. Further, this is accompanied by a shift in employment from the primary sector to the other sectors as surplus labour moves to more productive avenues of employment. Bihar’s economy is witnessing a shift towards services, much before industrialization, mostly driven by a buoyant urban economy. This is growth induced by the government. The share of the tertiary sector in GSDP grew in Bihar from 51 percent in 2001 to about 60 percent in 2007-08, while the secondary sector showed a marginal increase in share from about 11 percent to about 16 percent (Figure 2.2). The primary sector has witnessed a decrease of 13 percentage points in its contribution to the state income. Table 3.2: Sectoral shares in GSDP (%) Primary Sector Secondary Sector Tertiary Sector States 2001-02 2007-08 2001-02 2007-08 2001-02 2007-08 Bihar 37.9 24.8 11.2 15.7 51 59.5 Jharkhand 29.3 21.9 35.3 39.5 35.5 38.6 Punjab 35 32.5 22.7 24.7 42.3 42.8 West Bengal 31.3 24.8 15.2 19.4 53.5 55.8 Maharashtra 16.2 14.5 25.7 26.8 58.2 58.7 Source : Central Statistical Organization (CSO) Indicus Analytics Pvt. Ltd. Page nd 44 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Figure 3.2: Sectoral Share in Bihar (2001-02 and 2007-08) Sectoral shares in Bihar as percentage of GSDP Sectoral shares in Bihar as percentage of GSDP (2001-02) (2007-08) 24.8 37.9 51 11.2 59.5 15.7 Primary Sector Secondary Sector Tertiary Sector Primary Sector Secondary Sector Tertiary Sector The current economic growth in Bihar has happened mainly due to its well performing service sector. This highlights the need for providing security to the industrial set-up in the state so as to attract investment in the manufacturing sector in the state. In addition, the state has set an ambitious target of 7.6 percent GSDP growth in 2007-12, higher than states like Madhya Pradesh and Uttar Pradesh (Table 2.3). This equitable growth is targeted in all the three sectors to ensure an overall growth which is well-diversified and balanced. Table 3.3: State-wise Target for GSDP Growth in India (Annual Averages in %) (2007-2012) State wise Growth Target GSDP State Agriculture Industry Services Growth Bihar 7 8 8 7.6 Jharkhand 6.3 12 8 9.8 Madhya Pradesh 4.4 8 7 6.7 Orissa 3 12 9.6 8.8 Uttar Pradesh 3 8 7.1 6.1 West Bengal 4 11 11 9.7 Source : Ministry of Commerce & Industry, Govt. of India. (10334) Indicus Analytics Pvt. Ltd. Page nd 45 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • c) Consumer Market: The consumer market is composed of individuals (or households) who buy a specific good or service. In recent times, many factors such as urbanized lifestyle, increased influence of the media, and growth of the service sector have completely changed the consumer market scenario in Bihar. The per capita income in the state rose from Rs 10,415 in 2008 to Rs 13,959 in 2009, i.e. an increase of 34 percent in single year. On the other hand, the per capita expenditure in the state is still very low (Rs 6,800 in rural areas and Rs 12,800 in urban areas) as compared to that in other states and India (Table 2.4). However, there are signs of rising consumerism in the state in recent times. For example, in the last one year, there has been a growth of 39 percent in the number of private vehicles and 67 percent rise in the number of commercial vehicles plying across Patna10. Table 3.4: Annual Per Capita Expenditure across states (Rs per person), 2008 State Rural Area Urban Area Bihar 6,800 12,800 Jharkhand 16,300 38,100 Maharashtra 21,300 64,100 Orissa 17,100 35,100 Punjab 23,500 41,100 Tamil Nadu 18,400 38,400 West Bengal 19,500 44,700 India 16,200 41,100 Source: Market Skyline of India, 2008 Further, rural Bihar’s widespread participation is confirmed by the rapid rise in rural sales of branded consumer goods. Even stronger confirmation comes from the spread of the cell phone 10 India Today, Year-ender 2009, State Scan - Patna: P For Progress, Amitabh Srivastava Indicus Analytics Pvt. Ltd. Page nd 46 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • revolution. According to an estimate by Indicus, about 56 percent of the households in the state belong to the middle class which offers a large and vital consumer base. There has been a steady growth in the number of people belonging to the middle class in populous Bihar and its baby state Jharkhand (Figure 2.3). However, a declining or stagnating trend can be observed in the neighboring states such as Orissa, Madhya Pradesh and Uttar Pradesh. Also, the mega trend of consumerism is revamping Patna's economic structure, besides fuelling business growth in the city. Similarly, the retail industry here is also developing fast with improving business environment and rising income levels. Table 3.5: Potential Consumer Base offered by the Middle Class Potential Consumers (Middle Class) State 1998-99 2003-04 2007-08 Bihar 48.34 51.62 56.01 Jharkhand 42.7 47.26 57.68 Orissa 44.94 46.03 43.93 Uttar Pradesh 59.78 60.83 57.31 Madhya Pradesh 66.04 56.15 56.19 Source: Indicus Estimates using asset data from DLHS 1 2 and 3 Note: Q2, Q3 and Q4 quintiles together are considered as the 'middle class' Indicus Analytics Pvt. Ltd. Page nd 47 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Figure 3.3: Variation in the Strength of Potential Consumers over time Variation in State wise Potential Consumers over Time % Hhds (Middle-Class) 70 60 Bihar 50 Jharkhand 40 Orissa 30 20 Uttar Pradesh 10 Madhya Pradesh 0 1998-99 2003-04 2007-08 Time-Series Source: Indicus Estimates using asset data from DLHS 1 2 and 3 Note: Hhds refers to Households d) Investment Climate: Investment climate refers to the general economic conditions affecting the financial markets. A favorable investment climate encourages businesses to improve efficiency and productivity in order to increase revenues and capital available for investment. It also gives investors confidence in the market and encourages them to invest more capital. In the period spanning 2004-2010, Bihar has witnessed an annual average growth rate of about 86 percent in overall proposed investment which includes Industrial Entrepreneur Memoranda (IEMs) filed, and Letters of Intent (LOIs) & Direct Industrial Licences (DILs) issued (Table 2.6). In 2004, the share of Bihar in the overall proposed investment (vis-à-vis other states) was a mere of 0.1 percent (Rs 314 crore). However, by 2010, this share increased to about 1.5 percent (Rs 13,674 crore). Nevertheless, proposed investment in Bihar is still significantly lower than that in the neighboring Indicus Analytics Pvt. Ltd. Page nd 48 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • states like Jharkhand, Orissa and West Bengal. Thus, huge investment potential remains to be tapped in the state. Table 3.6: State-wise Investment Intentions (IEMs+LOIs+DILs) in India (Proposed Investment in Rs. Crore) Annual average growth rate over State/UTs 2004-2005 2005-2006 2006-07 2007-08 2008-09 2009-10 2004-2010 Bihar 314 3,913 4,850 6,564 9,267 13,674 86.2 Jharkhand 10,539 54,089 35,257 165,593 92,642 18,390 18.5 Madhya Pradesh 8,538 18,782 12,537 30,488 196,398 63,812 67.2 Orissa 45,565 38,255 96,869 220,529 130,433 175,155 37.9 Uttar Pradesh 21,633 31,710 33,745 13,051 13,153 8,771 -20.7 West Bengal 14,078 12,047 51,836 45,678 93,624 28,073 31.1 India 294,094 386,381 696,366 1,232,457 1,148,020 917,144 31.3 Source: Ministry of Commerce & Industry, Govt. of India Note: Investment in terms of Industrial Entrepreneur Memoranda (IEMs) filed, Letters of Intent (LOIs) issued and Direct Industrial Licenses (DILs) issued since November 2003. The amount of bank credit utilized in a state measures the extent to which funds are being used for economic activity as all sectors of the economy – agriculture, industry, trade etc – take recourse to bank credit to meet their investment needs. Compound Annual Growth Rate (CAGR) for total bank credit utilized over the period 2001-08 in Bihar, is 27.6 percent - higher than that in any other neighbour state (Table 2.7). This shows generally improving investment climate in the state. Indicus Analytics Pvt. Ltd. Page nd 49 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.7: Total outstanding Bank Credit CAGR(%) for Total Bank States 2001 2008 Credit Utilized (2001-08) Bihar 554,718 3,054,865 27.6 Jharkhand 473,335 1,738,310 20.4 West Bengal 2,947,559 12,551,150 23 Orissa 626,234 3,362,388 27.1 India 53,843,379 241,700,652 23.9 Source: Reserve Bank of India Outstanding liability is the due amount on the state’s balance sheet, which is yet to be paid. Thus, low outstanding liabilities foster better investment climate. As per RBI data, the total outstanding liabilities (as Percentage of GSDP) for Bihar has a falling trend since 2004 till date (Table 2.8). Table 3.8: Total Outstanding Liabilities (As Percentage of GSDP) State 2004 2005 2006 2007 2008 (RE) 2009 (BE) Bihar 76.5 75.6 78 52.9 47.9 46.3 Jharkhand 25.2 30.4 35.9 30.6 31.7 30.9 Madhya Pradesh 38.7 43.3 45.5 42.1 39.5 38.9 Orissa 62.2 62.3 64.3 45.7 40.4 38.3 Uttar Pradesh 57.7 57.8 59.9 53.6 50.3 48.1 West Bengal 48 47.1 49.4 45.3 43.5 41.5 All States 33 32.9 32.7 30.3 28.3 27.4 Source: RBI Gross Fiscal Deficit per person in Bihar was Rs 381 in 2007-08 much lower than the national average of 966 Rs per person (Table 2.9). Low fiscal deficit brightens up the investment climate. Indicus Analytics Pvt. Ltd. Page nd 50 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.9: Gross Fiscal Deficit (Rs per person) States 2005-06 2006-07 2007-08 Bihar 566 749 381 Jharkhand 1,701 1,757 2,042 Maharashtra 1,630 1,507 985 Orissa 371 237 284 Punjab 1,438 2,126 1,879 West Bengal 1,330 1,365 1,359 India 1,041 1,009 966 Source: RBI As the cost of living is rising in cities like Bengaluru and Hyderabad, ITcompanies are now looking to tier-1 and tier-2 cities such as Patna and Jaipur. The World Bank's ‘Doing Business in India 2009’ report has adjudged Bihar's capital city, Patna ahead of Mumbai and second only to New Delhi when it comes to launching a new business initiative. Furthermore, the government has invited proposals to develop a film city in the state under the public private partnership (PPP). Four places, Bihta, Gaya, Hajipur and Rajgir have been identified for the construction of the world class film production units. Apart from this, the demands for urban real estate space have come from sectors like banking, insurance, finance, telecom, coaching and educational institutes etc. According to an estimate11, more than 10 million sq ft are being built up to meet the demand. There are proposals to build 19 super-specialty medical colleges, 23 engineering colleges and a couple of management institutes in the next five years. Further, the State Investment Promotion Board (SIPB), formed by the state government, has received proposals worth Rs 96,000 crore. It has cleared 254 investment proposals in the past four years12. However, Bihar will have to depend on its own entrepreneurs for large scale and diverse investments — once locals build a strong foundation, outsiders are bound to follow. 11 India Today, Yearender 2009, State Scan - Patna: P For Progress, Amitabh Srivastava 12 gov.bih.nic.in/Documents/SIPB-Proposal-Status.pdf Indicus Analytics Pvt. Ltd. Page nd 51 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • e) Central Grants and Social Expenditure: The buoyant growth of the state in recent times is also attributed to the fact that the flow of Central funds to Bihar has increased manifold in recent years (Table 2.10). It went up from Rs 37,341 crore during the five-year period 2000-2005 to Rs 55,459 crore during the next three years. (See Table 2.10) Table 3.10: Percentage of Total Revenue Receipts from Grants States 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Bihar 12.2 15.2 16.2 23.2 21.1 23.6 24.7 Jharkhand 14.3 25.2 25.1 16.5 20.6 17.4 14.4 Madhya Pradesh 13.3 13.9 12.4 13.8 14.5 19.1 19.5 Orissa 17.6 21.3 18.2 23.6 27.3 21.7 24.8 Uttar Pradesh 12.9 8.3 7.8 12.7 11.9 13.9 15.6 West Bengal 20.2 15.4 11.4 13.5 13.6 17.7 16.8 India 16.9 16.3 16.2 17.5 18.3 19.2 19.8 Source: Reserve Bank of India, Respective Years The level of social sector expenditure has crucial implications for the long-term prospects of the economy as it encompasses social services including education and health, rural development, food storage and warehousing. As per RBI data, social sector expenditure as percent of total expenditure has gradually increased from 30.5 percent in 2004-05 to 45.1 percent in 2008-09 (Table 2.11). In fact, the total expenditure on social services in Bihar in 2008 has gone up to Rs 10,666 crore (35 percent salary component), which is up (more than double) from 4,197 crore of 2003-04. Table 3.11: Social Sector Expenditure as percentage of Total Expenditure 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 State (RE) (RE) Bihar 30.5 38.4 41.0 43.8 45.1 44.5 Jharkhand 44.1 45.9 47.0 43.5 47.8 44.9 Madhya 24.7 32.5 35.3 35.7 39.0 38.4 Indicus Analytics Pvt. Ltd. Page nd 52 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Pradesh Orissa 28.9 34.2 31.7 35.9 41.5 42.8 Uttar Pradesh 28.6 33.7 32.1 34.4 38.3 37.4 West Bengal 29.1 28.2 31.9 34.7 33.0 40.1 India 29.6 33.7 33.9 35.3 38.3 39.4 Source: RBI, Budget Documents of the State Governments. Even per capita social sector expenditure in Bihar has increased significantly (~ 110 percent) in the last five years. Though, outlay might not necessarily be reflected into outcome, it shows government’s commitment to bring positive change in the state (Table 2.12). Further, the share of expenditure on welfare of the state’s Scheduled Caste and Scheduled Tribe has almost doubled during the period 2004 (0.4 percent) to 2008 (0.8 percent) (Table 2.13). Table 3.12: Trend in Per Capita Social Sector Expenditure (Rupees) 1995- 2000- % Increase from 2000- State 00 05 2005-10 05 to 2005-10 Bihar 663 761 1,597 109.9 Jharkhand – 1,283 2,756 114.8 Madhya Pradesh 1,038 777 1,252 61.1 Orissa 870 1,134 2,348 107.1 Uttar Pradesh 579 778 1,685 116.6 West Bengal 785 1,129 2,066 83.0 India 1,097 1,585 2,735 72.6 Source: RBI, Budget Documents of the State Governments. Table 3.13: Percentage of Total Expenditure on Welfare of SC and ST States 2004-05 2005-06 2006-07 2007-08 Bihar 0.4 0.4 0.6 0.8 Jharkhand 3 2.3 2.2 2 Madhya Pradesh 1.7 1.9 0.8 0.7 Orissa 1.1 1.4 1.6 2.4 Uttar Pradesh 1.5 1.6 1.5 0.9 West Bengal 0.3 0.3 0.2 0.2 India 0.9 1 0.8 0.8 Source: Reserve Bank of India, Respective Years Indicus Analytics Pvt. Ltd. Page nd 53 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The share of development expenditure in the total expenditure has been increasing gradually since 2003-04 in the state (Table 2.14). In 2007-08 this figure crossed 50 percent (53.5 percent). This is better than in states like Uttar Pradesh, Madhya Pradesh and West Bengal, where development expenditure as percentage of total expenditure is much lower, around 10-20 percent. Table 3.14: Percentage of Total Expenditure on Developmental Expenditure 2003- 2004- 2005- 2006- 2007- States 04 05 06 07 08 Bihar 34.3 35.2 36.9 49.4 54.9 Jharkhand 47.8 50 50.7 55 53.5 Madhya Pradesh 25.3 22.3 23.1 15.7 13.1 Orissa 20 22.7 28.1 33 53.3 Uttar Pradesh 17.9 23.3 27.1 35.5 19.2 West Bengal 9.6 13.1 14 10.8 11.1 India 19.2 24.1 27.1 20.7 21.3 Source: Reserve Bank of India, Respective Years However, the flip side is that this growth in social sector expenditure does not get reflected in social indicators which remain abysmal. It would be unrealistic to ‘expect the moon’ at this stage. Right now the fundamentals are getting corrected and mostly infrastructural indicators of growth are visible13. One will have to wait for social indicators to improve over time. Further, a robust social service delivery system requires win-win relationships between policy makers and services recipients and that between policy makers and service providers. Despite facing many daunting challenges there are several instances of successful development efforts in Bihar. These demonstrate that projects can succeed and entrepreneurship can thrive and that strong leadership and a vision for change could yield dramatic results. The Bihar State Cooperative Milk Producers' Federation (COMFED), Muzaffarpur’s National Literacy Campaign, and the Paliganj Participatory Irrigation Management experience are examples of excellence. 13 Shaibal Gupta cited in ‘Bihar, A Growth Story’, Times Of India, January 10, 2010 Indicus Analytics Pvt. Ltd. Page nd 54 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • B. Development and Social Indicators a) Law & Order and Governance Law & Order The most positive move of this era is that the incidence of murder reduced at an average annum rate of 3.6 percent in Bihar during 2005-08 (Table 2.15). This is in stark contrast to neighboring states of Jharkhand, West Bengal and Orissa where the incidence of murder increased over the same period. Table 3.15: Per Annum Change in the Incidence of Murder State Per Annum Change Rate 2005-08 (%) Bihar -3.6 Jharkhand 4.1 West Bengal 8.4 Orissa 5.0 India 0.5 Source: Crime in India, National Crime Record Bureau, Respective Years Growth and development are feasible only when there is peace and order in the civil life of a state. The presence of a strong police force is essential for enforcing the law of the land and combating crime. Strength of civil and armed police force increased by 5.9 percent during 2005-08 much higher than the national average of 3.8 percent (Table 2.16). This shows the commitment of the state government to improve the law and order situation in the state and establish peace. Indicus Analytics Pvt. Ltd. Page nd 55 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.16: Civil and Armed Police strength States 2005 2006 2007 2008 Per Annum Change 2005-08 (%) Bihar 51,046 51,623 55,875 60,091 5.9 Jharkhand 24,563 28,766 40,498 51,828 29.5 West Bengal 80,039 80571 80,071 78,718 -0.6 Orissa 34,911 38752 38,272 29,167 -5.4 India 1,342,858 1406021 1,425,181 1,473,595 3.0 Source: Crime In India, National Crime Record Bureau, respective years As per National Crime Records Bureau (NCRB) data, during 2005-08 there has been a modest increase (3.4 percent) in the incidents of kidnappings and abductions in contrast with rapid increase (15.0 percent) during the period 2001-04 (Table 2.17). Only 317 kidnappings for ransom were reported during the last four years as against 1,393 during the previous four14. The kidnapping ‘industry’ has clearly fallen on hard times. One indication of this is that doctors no longer refuse to go to patients' homes on emergency calls! Nevertheless, it is imperative to increase employment opportunities in Bihar so that lesser number of people, especially amongst the youth are attracted towards crime. Table 3.17: Annual Growth in ‘Kidnapping & Abduction’* State 2001-04 2005-08 Bihar 15.0 3.4 Jharkhand 2.2 9.5 Uttar Pradesh -11.5 23.7 West Bengal 10.8 25.4 Orissa -0.7 12.5 India 0.2 10.3 Source: NCRB, Indicus Estimates 14 ‘Bihar, A Growth Story’, Times Of India, January 10, 2010 Indicus Analytics Pvt. Ltd. Page nd 56 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Note: * As defined in Sec. 363-369,371-373 IPC Governance: Good governance is the prerequisite for the overall development of a region. Yet Bihar has spent many years without being a functioning state. To quote an eminent politician in Bihar, ‘Bihar has never been the case of bad governance. It was actually the case of absence of governance. Now governance is visible’. For the first time in more than two decades, there is an effort to build a state structure. If it gets institutionalised and consolidated, then the development will in fact be state driven in the right direction. E-shakti (meaning ‘power from electronic governance’) – a unique e-governance measure taken by the state, has covered 13.5 lakh people in Patna district. It is now being expanded to cover the whole state. This is the biggest ever biometric card scheme in the world. Only such a revolutionary new technology that bypasses traditional avenues of corruption can deliver the goods in Bihar and India. b) Infrastructure & Communication Infrastructure Infrastructure which includes physical assets such as roads, railways, utilities, water, sewage, electricity etc, is considered essential for enabling productivity in the economy. Developing infrastructure often requires large initial investment, but the economies of scale tend to be significant. What seems to be happening is that the Bihar government has been successful in mobilizing funds, largely from the Center, to spend on the creation of infrastructure. Indicus Analytics Pvt. Ltd. Page nd 57 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The construction sector has been growing in prominence over the years as the demand from housing, commercial spaces and infrastructure projects have surged. The consumption of cement allows comparison between different states to reflect on the extent to which assets are being built up in the region. In the period 2003-04 to 2007-08, Bihar observed an annual growth rate of 9.0 percent in the consumption of cement (Table 2.18). This is a clear evidence of the upsurge in the construction sector in Bihar. Table 3.18: Cement Consumption ('000 Tonne) (2003-2004 to 2007-2008) Average Annual Growth Rate over Region/State 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2003-08 Bihar 3,130 3,800 4,360 4,493 4,537 5,104 9.0 Jharkhand 2,026 2,314 2,631 2,632 2,679 3,110 7.7 Orissa 3,377 3,901 4,146 4,432 4,717 5,470 9.1 West Bengal 5,782 6,223 6,589 6,928 7,287 7,651 5.7 Total Eastern Region 17,477 20,397 22,661 23,991 25,347 28,218 9.3 Total - Domestic Consumption 113,863 123,078 135,563 149,360 164,033 177,983 9.5 Source: Cement Manufacturers' Association. Connectivity is an important determinant for economic growth and a good road network is crucial for bringing the fruits of growth to all corners of a region. Interestingly, Bihar was the venue of the 70th annual session of the Indian Road Congress (IRC). The government of Bihar is now spending almost 30 per cent of its plan outlay on roads and bridges (Table 2.19). In fact, Patna is likely to become a state capital with the maximum number of road over bridges (eight) by the end of the year. These ROBs have concrete girders, railings and footpath facilities for the convenience of pedestrians. Further, More than 6,800 km of roads have been re-laid and 1,600 bridges and culverts Indicus Analytics Pvt. Ltd. Page nd 58 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • constructed in the last four years. About 2,417 km roads were constructed in the state in 2008-09 compared to 415 km in 2005-0615. Table 3.19: Release of Funds under PMGSY (in Rs. Crore) States 2006-07 2007-08 2008-09 2009-10 Bihar 571 733 1,065 1,038 Jharkhand 57 NA 211 225 Madhya Pradesh 1,165 1,616 1,895 1,218 Orissa 642 547 1,251 786 Uttar Pradesh 325 1,228 1,676 2,078 West Bengal 124 550 635 375 India 6,265 10,900 14,849 11,316 Source: Lok Sabha Starred Question No. 202, dated on 17.07.2009. Further, about 748 km of road (higher than in any other neighboring state) were completed under Pradhan Mantri Gram Sadak Yojana (PMGSY) over the period 2000-09 till in Bihar (Table 2.20). Also, percentage of habitations connected by pucca roads under PMGSY increased from 31 percent in 2000 to 44 percent in 2009 (Table 2.21). Table 3.20: Road Completed under PMGSY in India (Up to January 2009) Road Completed (In States km.) Bihar 748 West Bengal 679 Punjab 516 Tamil Nadu 469 Jharkhand 110 Source: Lok Sabha Unstarred Question No. 487, Dated on 20.2.2009 15 ‘Bihar, A Growth Story’, Times Of India, January 10, 2010 Indicus Analytics Pvt. Ltd. Page nd 59 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.21: Percentage of Habitations connected by pucca roads State 2000 2009 Bihar 30.8 44 Jharkhand 50 59.6 Orissa 42.1 66.5 West Bengal 30.5 58.5 All India 59.2 72.8 Source: PMGSY, Ministry of Rural Development Bihar among its neighbour states witnessed the maximum percentage increase (7.6 percent) in the households having electricity connections over the period 2002-04 to 2007-08. Table 3.22: Percentage of households having electricity connections Electricity Percentage State 2002-04 2007-08 Increment Bihar 14.1 21.7 7.6 Jharkhand 31.9 32.5 0.6 Maharashtra 83.6 77.6 -6 Punjab 96.2 98.4 2.2 Tamil Nadu 87 91.2 4.2 INDIA 71.6 69.4 -2.2 Source: District level Household Survey –III, II The steady growth in the number of passengers per outbound movement in the state of Bihar is a clear evidence of air travel gradually becoming more affordable and popular with wider sections of the population (Table 2.23). States such as Jharkhand, Madhya Pradesh and Orissa lag far behind Bihar in terms of outbound movement of passengers. Indicus Analytics Pvt. Ltd. Page nd 60 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.23: Passengers per Outbound Movement State 2005-06 2006-07 2007-08 Bihar 52 53 60 Jharkhand 28 38 35 Madhya Pradesh 31 43 35 Orissa 46 52 54 West Bengal 84 86 91 India 86 88 88 Source: Various Annual Reports, Airport Authority of India Gaya airport in Bihar has ambitious plans of expansion of its runway from 7,500 feet in 2008 to 9,000 feet in 2011. The incurred cost is estimated to be about Rs 10 crore which is much less than that for other airports such as Varanasi, Bhopal and Kolkata (Table 2.24). Table 3.24: Expansion of Runways in India (2008-2011) Existing Length New Length Estimated before after Expenditure Extension (In Extension (In States/ Schemes/Airports Scheme in Rs. Crore) Feet) Feet) Extension of Runway for A - 310 Type of Bihar (Gaya) Aircraft 10 7,500 9,000 Extension & Strengthening of Madhya Pradesh (Bhopal) Runway 52.1 6,709 9,002 Extension of Runway to 9000 Ft. and Provision Shoulders Uttar Pradesh (Varanasi) etc. 31.43 7,236 9,000 Extension of West Bengal (Kolkata) Secondary Runway 35 7,870 10,626 Source: Compiled from the statistics released by : Rajya Sabha Unstarred Question No. 2337, dated 15.04.2008. Communication The communications infrastructure provides an expansion of choices available to individuals to enable them to lead fulfilling and improved lives. ICT partners with existing services and existing forms of technology to make them reach more and more people faster at a cheaper rate and Indicus Analytics Pvt. Ltd. Page nd 61 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • provides a more expansive and wider platform, if there is equitable access to the communication infrastructure. Telephone density (per hundred people) over the period 2006-07 to December 2009 increased by a phenomenal annual growth rate of about 122 percent as compared to the national average of 67 percent (Table 2.25). Further, none of the states in the vicinity of Bihar has witnessed such a sharp rise in telephone density, except Orissa which witnessed a 95 percent growth. Table 3.25: Telephone Density (%) across states Annual Growth (in State 2006-07 2007-08 Dec 2009 %) Bihar 6.7 11.1 33 121.9 Jharkhand 3.2 3.4 4.7 21.2 Maharashtra 26.8 36.1 46.6 31.9 Tamil Nadu 27.1 40.7 67.8 58.2 Punjab 36.8 47.6 69.9 37.8 West Bengal 13.9 20.1 30.3 47.6 Orissa 8.8 13.4 33.6 95.4 India 17.1 24.2 47.9 67.4 Source: Annual Report, Department of Telecommunications Mobile connections per thousand people in Bihar increased by annual growth rate of about 94 percent over 2006-07 to 2008-09 much higher than the national average of 60 percent during the same period (Table 2.26). According to an estimate by Bharti Airtel, Bihar has the fastest growth of talk-time in any state. Indicus Analytics Pvt. Ltd. Page nd 62 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.26: Mobile Connections per 1000 people Annual Growth (in State 2006-07 2007-08 2008-09 %) Bihar 55.8 98.4 210.9 94.4 Jharkhand 16.6 19.1 27.2 28.0 West Bengal 50.4 90.9 306 146.4 India 132.5 203.8 336.8 59.4 Source: Annual Report, Department of telecommunications Annual growth rate of internet subscribers between 2006 and 2009 in Bihar was 46.6 percent as compared to about 39 percent for India (Table 2.27). However, Orissa also observed a remarkable growth of about 62 percent. Table 3.27: Circle-wise Number of Internet Subscribers in India Mar Annual Growth State/Telecom Circle 2006 Dec 2007 Mar 2009 Rate (%) Bihar (+Jharkhand) 83,298 129,634 179,043 46.6 Madhya Pradesh (+Chhattisgarh) 218,952 385,770 503,708 51.7 Orissa 58,169 102,549 152,280 61.8 Uttar Pradesh (+Uttarakhand) 338,797 508,542 644,735 37.9 West Bengal (+Sikkim) 442,587 671,207 860,700 39.5 7,053,02 13,646,70 India 2 10,506,586 0 39.1 Source: Lok Sabha Unstarred Question No. 1121, dated on 13.07.2009. c) Poverty The poverty line in India is measured by taking the income (separately for rural and urban areas) necessary to buy a basic food-basket, the consumption of which yields a minimum level of calories. Indicus Analytics Pvt. Ltd. Page nd 63 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • It takes into account only the expenditure required for food for subsistence, leaving out other components of all other goods and services - housing, clothing, education and health services - needed for a decent living. The poverty level denoted by the Head Count Ratio in the state is measured at 38.1 percent in 2008- 09 (Table 2.28). During the period 2001-02 to 2008-09, Bihar observed the maximum fall in poverty ratio (7.1 percentage points) among its neighboring states. Similarly, as per DLHS I, II and III asset data, about 38 percent households constitute the ‘poorest quintile’ in the state (Table 2.29). Indicus Analytics Pvt. Ltd. Page nd 64 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.28: Percentage of population living below the poverty line Fall in Head State 2001-02 2008-09 Count Ratio Bihar 45.2 38.1 7.1 Chhattisgarh 42.4 41.0 1.4 Jharkhand 44.0 39.2 4.8 Madhya Pradesh 41.9 39.8 2.1 Orissa 46.6 46.3 0.3 Uttar Pradesh 34.9 31.1 3.8 West Bengal 26.9 21.4 5.4 Source: Indian Development Scape 2008, Indicus Analytics Note: Percentage of population living below the poverty line. Poverty line is essentially the cost of a bundle of commodities that could provide a little over 2400 cal of food intake to an average Indian living in rural areas and 2100 cal in urban areas. Table 3.29: Poorest Quintile over time Poorest Quintile State 1998-99 2002-04 2007-08 Bihar 43.95 40.67 37.65 Jharkhand 50.41 44.51 36.07 Orissa 45.7 44.44 46.27 Uttar Pradesh 26.8 25.49 31.31 Madhya Pradesh 19 29.54 32.62 Source: Indicus Estimates using asset data from DLHS 1 2 and 3 About 40 lakh ration cards had been issued to the below poverty line population in Bihar till June 2009. Similarly, under Antyodaya Anna Yojana (AAY) about 24 lakh people were issued ration cards as compared to about 14 lakh in Orissa and 15 lakh in West Bengal (Table 2.30). Indicus Analytics Pvt. Ltd. Page nd 65 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.30: Number of Ration Cards Issued to BPL, Antyodaya Anna Yojana (AAY) and APL Households in India (As on 30.06.2009) Ration Cards Issued (in Lakhs) States/UTs BPL AAY APL Total Bihar 39.94 24.29 15.53 79.76 Jharkhand 14.76 9.18 5.15 29.09 Orissa 37.63 12.65 36.02 86.3 West Bengal 37.98 14.8 121.74 174.52 India 842.78 242.45 1335.84 2421.37 Source: India Stat Lok Sabha Unstarred Question No. 438, dated 07.07.2009. Rural poverty in Bihar is associated with limited access to land and livestock in addition to poor education and healthcare. Thus, apart from quality provision of education and health, generating productive income earning opportunities in agriculture remains pivotal to reducing chronic poverty in rural Bihar. Further, if manufacturing is encouraged by ensuring law and order situation with suitable infrastructure, it would remove poverty from Bihar by creating employment opportunities. d) Education: Literacy rate in Bihar increased by 7.7 percentage points over the period 2002-04 to 2007-08, higher than any neighbor state or India (Table 2.31) Table 3.31: Literacy Rate across different states States 2002-04 2007-08 Bihar 51 58.7 Jharkhand 56.4 62.1 Maharashtra 73.5 74.7 Punjab 70.6 75.9 Indicus Analytics Pvt. Ltd. Page nd 66 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • West Bengal 68.7 72.1 Orissa 62.8 69.2 India 67.2 71.9 Source: District Level Household Survey III, II Higher education is the next step in raising the skills of the population as it provides trained manpower for employment in industries and services. In fact without creating sufficiently excessive capacity for professional education, the state can not even dream of sustained growth in per capita income. In the post 2004-05 era, there has been a remarkable growth in the infrastructure of professional education in the state. As per Selected Educational Statistics (SES), there were about 1.8 professional colleges (Management, Law, IT, Agricultural Colleges) per million people in Bihar in 2006-07 (Table 2.32). This capacity has more than doubled in the last five years though, Bihar needs to continue its focus on higher and professional education in the coming years. The recent partnership between IIT Patna and the UNICEF would go a long way in improving the socio- economic status of women and children in Bihar. Table 3.32: Number of Management, Law, IT, Agricultural Colleges per Million People State 2002-03 2003-04 2004-05 2005-06 2006-07 Bihar 0.7 0.7 0.7 1.4 1.8 Jharkhand 0.5 0.5 0.3 0.8 0.9 Madhya Pradesh 3.3 3.3 3.2 2.2 2.2 Uttar Pradesh 0.7 1.5 3.9 3.8 3.3 Maharashtra 1.3 1.3 1.3 4 4.2 Kerala 2.5 2.5 2.5 2.5 0.9 India 1.9 1.9 2.2 2.3 2.3 Source: Selected Educational Statistics, respective years Indicus Analytics Pvt. Ltd. Page nd 67 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Total expenditure on primary and secondary education per child (6-14 years age group) in Bihar is about Rs 1400 which is higher than those in West Bengal and Punjab (Table 2.33). Further, there are less number of students per teacher in Bihar than in Orissa, Jharkhand or West Bengal (Table 2.34). The pupil-teacher ratio is showing a falling trend in the state, translating into higher attendance and improved quality of education. Table 3.33: Total Expenditure on primary and middle level education per child (6-14 years) 2005-06 State Rs. Per Person Bihar 1,393 Jharkhand 1,821 Punjab 1,189 Orissa 1,743 West Bengal 1,279 India 1,810 Source : Analysis of budgeted expenditure on education, Ministry of HRD Table 3.34: Pupil Teacher Ratio across different states State 2004-05 2005-06 Bihar 19 17 Jharkhand 24 28 West Bengal 30 29 Orissa 17 18 India 25 26 Source: Selected Educational Statistics, respective years Indicus Analytics Pvt. Ltd. Page nd 68 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • e) Health: Life expectancy in Bihar is 61 years, almost at par with the national life expectancy of 62.7 years. The death rate in the state (7.5 per thousand population) is very close to the national average (Table 2.35). Table 2.36 shows that by 2016, the crude death rate in Bihar would reach below the national average. Table 3.35: Death Rate across different states, 2007 State Death Rate Bihar 7.5 Jharkhand 7.3 West Bengal 6.3 Orissa 9.2 Maharashtra 6.6 Punjab 7 Tamil Nadu 7.2 INDIA 7.4 Source: Sample Registration System (SRS) Bulletin Table 3.36: Projected Crude Death Rate (CDR) Period Bihar India 2001-06 10.0 8.3 2006-11 9.4 7.8 2011-16 8.9 7.5 2016-20 6.6 7.1 2021-25 6.7 7.2 Source: Compiled from the statistics released by Registrar General of India, Directorate General of Health Services, Ministry of Health & Family Welfare, Govt. of India. Table 2.37 shows that population served per bed in government hospitals is lower in Bihar (4163) as compared to those served in Uttar Pradesh (5,646) and Jharkhand (5,494). Further, total registered AYUSH doctors per 10,000 population in January 2008 were about 18 as compared to the national average of 7 (Table 2.38). This underscores the importance of Indian system of medicine for Indicus Analytics Pvt. Ltd. Page nd 69 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • improving healthcare scenario in the state. On the other hand, the allopathic doctors’ density in Bihar was much lower than the national average in 2008, reflecting the need for attracting qualified allopathic doctors, particularly in rural areas. Table 3.37: Number of Govt. Hospitals & Beds 2007-08 Total Population Served Population Served Per Govt. State/UT/Division Hospitals Beds Per Govt. Hospital Hospital Bed Bihar 1,717 22,494 54,533 4,163 Jharkhand 500 5,414 59,490 5,494 Assam 100 3,000 278,780 9,293 Uttar Pradesh 925 32,460 198,143 5,646 Orissa 1,707 14,551 23,231 2,725 West Bengal 383 49,681 224,869 1,734 India 11,289 494,510 101,403 2,315 Source: Directorate General of State Health Services Notes: Rural & Urban bifurcation is not available in Bihar & Jharkhand. Table 3.38: Number of Total Registered Allopathic Doctors, Dental Surgeons and AYUSH doctors State/ UT Total Total registered Total registered Total registered registered AYUSH Doctors Allopathic AYUSH Doctors per Allopathic (As on 1-1-08) doctors per 10,000 Doctors (2008) 10,000 population(As on 1- population 1-08) (2008) Bihar 37,753 166,152 4 17.7 Jharkhand 1,420 NA 0.5 NA Orissa 16,068 7,571 NA 1.9 West Bengal 56,488 48,175 6.5 5.5 Indicus Analytics Pvt. Ltd. Page nd 70 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Uttar Pradesh 52,181 93,794 2.7 4.9 India 725,190 751,926 6.3 6.6 Source: National Health Profile 2008 Bihar’s progress during the four year period between DLHS 2 (2002-04) to DLHS 3 (2007-08) is mixed. For example, institutional deliveries increased from 18.8 percent to 27.7 percent, however, mothers receiving full antenatal care decreased from 4.3 percent to 3.9 percent. Similarly, full immunisation in children 12-23 months increased from 20.7 percent to 41.4 percent, however, the State continues to have high dropout from BCG to DPT 3 which is critical for further improvement in full immunization coverage. ‘Janani’ - an innovative experiment within Bihar initiated social marketing of birth control in the state through a franchising system. Such successful experiments need to be replicated throughout the state and the country. As per the Bulletin on Rural Health Statistics 2008, there are a sub-center and a health center to serve the population at an average distance of 1.8 km and 4.2 km respectively. This distance is more in case of Jharkhand, Uttar Pradesh and Orissa. Therefore, sub-centers and primary health centers are relatively more accessible in Bihar than those in its neighboring states. However, a huge gap still remains to be bridged in this regard. The Reproductive and Child Health Facility Survey conducted in 2000 reveals poor availability, utilisation and quality of services in the Primary Health Centres, Community Health Centres (CHCs) and the Sub-Centres (SCs). The health facilities in all such health centres need to be upgraded to improve reproductive and child health status across the state. Indicus Analytics Pvt. Ltd. Page nd 71 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.39: Average Radial Distance Covered by Healthcare Institutions (As on March, 2008) Primary Sub- Health Centers Centers State (SCs) (PHCs) Bihar 1.82 4.23 Jharkhand 2.5 8.67 Uttar Pradesh 1.91 4.5 West Bengal 1.62 5.42 Orissa 2.7 6.17 All India 2.61 6.5 Source: Bulletin on Rural Health Statistics in India 2008. Infrastructure Division MOHFW/GOI Indicus Analytics Pvt. Ltd. Page nd 72 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • iii) Other a) Tourism: Rapid growth of the economy, increase in the general income level of the populace and aggressive advertisement campaigns on the tourist destinations have led to upsurge in the tourism industry in Bihar. The state has fabulous places like Nalanda Vishwavidyalaya, Bodh Gaya, Pawapuri temple, Rajgir, Babadham, etc which attract tourists to the state. As per Ministry of Tourism (GoI) statistics, in 2008, Bihar attracted as many foreign tourists as Goa. Further, there has been a gradual increase in the inflow of foreign tourists in Bihar since 2005 (Table 2.40). According to the Bihar Economic Survey for 2009-10, Bihar attracted 3.46 lakh tourists in 2008 compared to only 61,000 in 2003 – an increase of more than 450 percent! Table 3.40: State-wise Foreign Tourist Visits in India (1997 to 2006) in '000 States/UTs 2,002 2,003 2,004 2,005 2,006 2007 2008 Bihar 113 61 38 63 85 177 346 Goa 272 314 363 337 380 388 351 Kerala 233 295 346 346 429 516 599 Madhya Pradesh 67 92 145 161 187 234 252 Orissa 23 25 29 33 39 42 44 Uttar Pradesh + Uttarakhand 710 817 1,037 1,175 1,329 1,524 1,610 Jharkhand 2 3 4 6 4 4 6 West Bengal 529 705 776 896 998 1,155 1,134 India 5,158 6,708 8,360 9,940 11,404 13,267 14,113 Source : Ministry of Tourism, Govt. of India Indicus Analytics Pvt. Ltd. Page nd 73 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • b) Agriculture: Agriculture is the key to the overall development of the state economy as it continues to generate more than 40 percent of the State Domestic Product. The percentage of population employed in agriculture in Bihar is estimated to be 80 percent, which is much higher than the national average. Agriculture production can only be increased to some extent through enhanced cropping intensity, change in cropping pattern, improvement in seeds of high yielding varieties, cultivation practices and with the availability of better post harvest technology etc. The state government is trying to re- orient agriculture through diversification policy and other measures. Major goals of the state in the agricultural sector can be outlined as below: i) To ensure increase in income of farmers to viable levels ii) To ensure food security through increase productivity iii) To foster nutritional security through raising levels of productivity as well as raising living standards of rural societies. iv) To revitalize farming in order to create gainful employment and to check migration. v) To ensure that policies bring about agricultural growth with justice, with programmes focusing on gender and human aspects. Agricultural marketing simply involves the buying and selling of agricultural produce. As per the Ministry of Agriculture, GoI, there were 526 regulated markets in the state in March 2008 (Table 2.41). An important development in the field of regulated markets is the keen interest taken by the International Development Agency (IDA) in the development of the infrastructure in regulated markets. For example, the IDA is financing the development of infrastructure in 50 regulated markets of Bihar. Indicus Analytics Pvt. Ltd. Page nd 74 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 3.41: Number of Wholesale, Rural Primary and Regulated Markets (As on 31.03.2008) Number of Markets Regulated Markets Sub-Market States/UTs Wholesale Rural Primary Total Principal Yards Total Bihar 325 1,469 1,794 95 431 526 Jharkhand 205 603 808 28 173 201 Gujarat 207 129 336 196 218 414 Haryana 284 187 471 106 178 284 Madhya Pradesh 237 1,321 1,558 237 264 501 Orissa 398 1,150 1,548 45 269 314 Uttar Pradesh 584 3,244 3,828 245 342 587 West Bengal 279 2,955 3,204 43 641 684 India 6,503 20,887 27,390 2,478 5,088 7,566 Source : Ministry of Agriculture, Govt. of India. (11151) Note: 1.In Bihar and West Bengal Sub Yards include cold storages and hence figures of total regulated markets and wholesale markets are not comparable. 2. All principal regulated markets are wholesale markets, whereas sub market yards may/may not be a wholesale market as it also includes some of rural Primary Markets notified for regulation. It is evident from Table 2.42 that Bihar has witnessed the highest annual growth rate of the production of total foodgrains among its neighbor states over the period 2004-2008. It is almost double the growth rate in Madhya Pradesh and about quadruples that in Uttar Pradesh. Table 3.42: Production of Total Foodgrains (2001-2002 to 2008-2009 ('000 Tonne) Average Annual Growth Rate over 2004 States/UTs 2004-05 2005-06 2006-07 2007-08 2008-09 to 2008 Bihar 7,704.4 8,586.8 11,098.6 10,864.1 12,220.7 12.3 Gujarat 5,257.5 6,154.0 6,499.0 8,206.0 6,481.0 7.3 Madhya Pradesh 14,104.8 13,195.0 13,747.0 12,070.5 13,914.6 -1.2 Orissa 6,889.7 7,359.7 7,344.7 8,143.3 7,399.1 2.5 Punjab 25,670.7 25,184.2 25,313.1 26,815.1 27,329.8 1.9 Uttar Pradesh 37,836.3 40,410.2 41,214.5 42,094.8 46,729.3 4.7 West Bengal 16,055.4 15,608.9 15,974.5 16,050.2 16,295.6 0.6 India 198,362.8 208,601.6 217,282.1 230,775.0 234,466.4 4.5 Source : Ministry of Agriculture, Govt. of India Indicus Analytics Pvt. Ltd. Page nd 75 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Bihar has the maximum yield (in kg/hectare) of total cereals among all its neighboring states such as Madhya Pradesh, Orissa, Uttar Pradesh and West Bengal (Table 2.43). Further, it is more than double the national average. Table 3.43: Yield (in kg / hectare) of total Cereals in India Average Annual Growth Rate over 2004-05 to 2007- States/UTs 2004-05 2005-06 2006-07 2007-08 08 Bihar 1,247 1,368 1,749 1,615 10.8 Jharkhand 1,345 1,159 1,712 1,906 15.4 Madhya Pradesh 1,342 1,348 1,375 1,324 -0.2 Orissa 1,426 1,511 1,516 1,676 5.0 Uttar Pradesh 2,150 2,260 2,266 2,394 3.3 West Bengal 2,542 2,481 2,575 2,578 0.8 India 1,903 1,968 2,020 2,151 4.0 Source: Ministry of Agriculture, Govt. of India Indicus Analytics Pvt. Ltd. Page nd 76 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Section IV District Profile of Bihar Bihar has thirty eight districts. The distinctive characteristics of each are given below in brief: The backbone of the Araria district is formed by the jute mills along with the cultivation of crops like paddy, maize, jute. This district is also known to be the natural habitat of the Gangetic dolphin. The Aurangabad district is famous for woollen carpets and blanket weaving. In Begusarai district, above 85 percent people depend upon agriculture. Oil refinery complex at Barauni is well-known. Banka district is the producer of crops like paddy, wheat, maize and lentils. Banka’s home made Khadi and silk are popular in the whole country. Indicus Analytics Pvt. Ltd. Page nd 77 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • The administrative headquarters of the Bhojpur district is located in Arrah. Bhojpur has a rich literary and musical lineage. East Champaran district is an important district of the state with its headquarters at Motihari. Gandhiji’s first Satyagraha took place at Champaran district. Gopalganj district is significant because of the flourishing cottage industries like weaving, woodwork, potteries and bamboo work. The topography of Jamui district is marked by hills and plains and the district occupies an area of 3,122 sq. km. Archaeological and historical evidence shows Jamui’s close association with Jain tradition for a long past to the present time. Gaya district is famous for Bodhgaya an important pilgrimage site of Buddhism. Darbhanga and Buxar are two most important districts of Bihar and some of the important crops like sugarcane, wheat, rice are cultivated here in huge quantities. Darbhanga city is essentially a twin city with Darbhanga tower and Laheriasarai tower at its two ends. The remains from archaeological excavations have established the link of Buxar with ancient civilisations of Mohanjodaro and Harappa. Nalanda, well known for its rich and glorious past, was founded in the 5th Century AD. It is known as the ancient seat of learning. Patna, the capital city of Bihar, has the highest per capita gross district domestic product in Bihar. Jehanabad district is drained by the Phalgu river. The Barabar International Tourist Centre, situated in the hilly area of Jehanabad, is world famous for its ancient Seven Rock cut Buddhist Caves. The main attractions of Kaimur district are the Kaimur hills and the Kaimur Wildlife Sanctuary which are ideal tourist destinations. The main rivers traversing Katihar district are the Mahananda and the Ganges. The district comprises three sub-divisions: Katihar, Barsoi and Manihari. Khagaria district is one of the important districts of Bihar with its headquarters at Khagaria. Earlier, Khagaria was part of the Munger district. Indicus Analytics Pvt. Ltd. Page nd 78 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Kishanganj district is the religious destination of devotees of all faiths. The different places of worship are Maa Kali Mandir, Odraghat, Masjid, Sri Digambar Jain Mandir, Gurdwara Guru Singh Sabha, Catholic church and Mazare Kadam Rasool. The climate and the land of Lakhisarai district are favourable for the cultivation of crops like wheat, paddy, lentils and maize. Before coming into existence as a new district, Lakhisarai was a sub- division within Munger District. Madhepura district situated on the plains of the river Kosi is dominated by the jute mills. Madhubani district is spread over an area of 2,501 sq. km. and is dominated by the sugar factories. Famous Madhubani paintings belong to this region. Monghyr district is situated in the southern part of Bihar and the prominent tourist attractions of the place are Kharagpur Lake, Chandika Astahan, Pir Shah Nafah Shrine, Kastaharni Ghat, Sita Kund, Manpathar, Ucheswar Nath, Goenka Sivalaya, Sri Krishna Vatika, Pirpahar. Muzaffarpur district is a district of industrial importance. There are sugar factories at Motipur, a thermal power station at Kanti, a wagon factory at Muzaffarpur, and pharmaceuticals at Narayanpur. Nawada district is spread over an area of 2,494 sq km, the main crop cultivated is paddy and an important industry is the beedi industry. Purnia district is the oldest district in Bihar. It covers an area of 3,229 sq km and produces large quantities of eggs. The main rivers traversing the Rohtas district are Son and Kaw. Some of the important industries located here are cement factories at Banjari and Dalmia Nagar, vegetable oil mill, and paper factory at Dalmia Nagar. Saharsa district is divided into seven blocks Saharsa Sadar, Menhasari, Simri Bhaktiyarpur, Nauhatta, Saurbazar, Sonbarsa, and Salkhua. Samastipur district is spread over an area of 2,904 sq.km. The rivers flowing through this district are Burhi Gandak, Baya, Kosi, Kamla, Kareh, Jhamwari, and Balan. The district headquarters of the Saran district is at Chhapra. An important town of the district is Sonepur where a cattle fair is held every year and this is Asia’s largest international cattle fair. Indicus Analytics Pvt. Ltd. Page nd 79 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Sheikhpura district is divided into six blocks which are Ariari, Sheikhpura, Barbigha, Ghatkusumba, Chebara, and Shekhopur Sarai. Sheohar district covers an area of 443 sq km. with its district headquarters at Sheohar town. Sitamarhi district is an agricultural and an industrial district. The important crops grown here are paddy , wheat , maize and lentils. This is the place where Sita was born, the main character of the epic Ramayana. The district is situated along the border of Nepal. Siwan district is dominated by sugar factories. The rivers flowing through the district are Daha and Jharhi. Supaul district is spread over an area of 2,420 sq.km. and the economy largely depends on agriculture. The main crop cultivated here is paddy. The main attractions of Vaishali district are Vaishali Museum, and Bawan Pokhar Temple. The economy of the West Champaran district sustains on both agriculture and industry. The sugar industries dominate the district. Indicus Analytics Pvt. Ltd. Page nd 80 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Demography Table 4.1: Total Population and Decadal Growth Rate (2001) Total Population (in 000') Population in 0-6 age group (in 000') Percentage Decadal (2001) (2001) Growth Rate (1991- District Person Male Female Person Male Female 2001) Araria 2125 1109 1016 449 228 221 31.8 Aurangabad 2005 1036 969 379 196 183 30.2 Banka 1609 843 766 323 167 156 24.5 Begusarai 2343 1226 1117 464 239 225 29.1 Bhabhua 1285 674 611 258 133 125 30.6 Bhagalpur 2430 1294 1136 457 232 225 27.2 Bhojpur 2233 1175 1058 406 210 196 24.6 Buxar 1403 738 665 265 138 127 29.0 Darbhanga 3285 1717 1568 628 333 295 30.9 E.Champaran 3934 2072 1862 805 416 389 29.3 Gaya 3465 1789 1676 666 340 326 30.0 Gopalganj 2149 1072 1077 417 213 204 26.1 Jamui 1397 729 668 265 135 130 32.9 Jehanabad 1511 784 727 283 148 135 28.6 Katihar 2390 1245 1145 514 262 252 30.9 Khagaria 1277 676 601 270 139 131 29.3 Kishanganj 1294 667 627 280 144 136 31.5 Lakhisarai 801 417 384 160 82 78 23.9 Madhepura 1524 796 728 320 167 153 29.5 Madhubani 3571 1838 1733 700 361 339 26.1 Munger 1135 605 530 197 103 94 20.3 Muzaffarpur 3744 1942 1802 718 373 345 26.7 Nalanda 2368 1236 1132 445 229 216 18.6 Nawada 1809 928 881 347 176 171 33.1 Patna 4710 2515 2195 796 408 388 30.2 Purnea 2541 1326 1215 537 273 264 35.2 Rohtas 2449 1283 1166 463 238 225 27.7 Saharsa 1506 788 718 306 161 145 33.0 Samastipur 3413 1771 1642 696 358 338 25.6 Saran 3251 1654 1597 620 319 301 26.4 Sheikhpura 525 273 252 106 54 52 25.0 Sheohar 514 271 243 102 53 49 36.2 Sitamarhi 2670 1410 1260 539 284 255 32.6 Siwan 2709 1332 1377 532 276 256 24.8 Supaul 1745 909 836 365 190 175 30.0 Vaishali 2712 1412 1300 523 271 252 26.4 W.Champaran 3043 1601 1442 631 325 306 30.4 Bihar 82,879 43,154 39,725 16,235 8,376 7,859 28.4 Source: Census of India 2001 (Provisional) Note: State total may not tally with aggregate of District's total due to rounding off of the figures. Indicus Analytics Pvt. Ltd. Page nd 81 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Environment: Table 4.2: District-wise Forest Cover in Bihar (Area in km2) Total forest area (very dense, Forest Cover as Geographic moderately dense Percentage of District Area and open forest) Geographic Area Araria 2,830 22 0.8 Aurangabad 3,305 147 4.5 Banka 3,022 206 6.8 Begusarai 1,918 8 0.4 Bhabhua 3,381 1,106 32.7 Bhagalpur 2,567 27 1.1 Bhojpur 2,390 12 0.5 Buxar 1,708 10 0.6 Darbhanga 2,279 14 0.6 Gaya 4,976 576 11.6 Gopalganj 2,033 0 0.0 Jamui 3,107 641 20.6 Jehanabad 1,569 2 0.1 Katihar 3,057 3 0.1 Khagaria 1,486 5 0.3 Kishanganj 1,884 12 0.6 Lakhisarai 1,356 192 14.2 Madhepura 1,788 8 0.5 Madhubani 3,501 14 0.4 Munger 1,347 262 19.5 Muzaffarpur 3,172 5 0.2 Nalanda 2,367 55 2.3 Nawada 2,494 509 20.4 W. Champaran 5,228 893 17.1 Patna 3,202 25 0.8 E. Champaran 3,968 6 0.2 Purnia 3,229 8 0.3 Rohtas 3,832 751 19.6 Saharsa 1,680 7 0.4 Samastipur 2,904 13 0.5 Saran 2,641 9 0.3 Sheikhpura 612 1 0.2 Sheohar 572 1 0.2 Sitamarhi 2,071 4 0.2 Siwan 2,219 0 0.0 Supaul 2,432 13 0.5 Vaishali 2,036 12 0.6 Bihar 94,163 5,579 5.9 Source: Ministry of Environment and Forest, Govt. of India. Indicus Analytics Pvt. Ltd. Page nd 82 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Agriculture: Table 4.3: Gross Irrigated Area of Bihar (in hectares), 2004-2005 Total Gross Irrigated District Area Araria 104,069 Arwal 38,153 Aurangabad 151,790 Banka 116,417 Begusarai 86,502 Bhabua 153,534 Bhagalpur 75,252 Bhojpur 149,930 Buxar 127,382 Darbhanga 104,058 E.Champaran 164,293 Gaya 126,920 Gopalganj 109,435 Jahanabad 60,179 Jamui 29,218 Katihar 131,480 Khagaria 80,980 Kisanganj 49,786 Lakhisarai 51,384 Madhepura 129,863 Madhubani 140,290 Mujaffarpur 132,654 Munger 39,983 Nalanda 184,479 Nawadah 86,743 Patna 159,280 Pumea 161,370 Rohtas 305,668 Saharsa 95,645 Samastipur 113,436 Saran 119,652 Sheikhpura 22,753 Sheohar 15,022 Sitamarhi 57,345 Siwan 111,333 Supaul 138,730 Vaishali 87,167 W.Champaran 184,965 Bihar 4,197,140 Source: The Fertiliser Association of India. Indicus Analytics Pvt. Ltd. Page nd 83 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 4.4: District-wise Area and Production of Total Fruits in Bihar (2005-2006) Production (In District Area (in hectare) Tonne) Araria 3,420 38,816 Arwal 885 8,658 Aurangabad 3,400 29,008 Banka 8,294 79,285 Begusarai 7,502 85,925 Bhagalpur 11,537 132,271 Bhojpur 8,164 72,857 Buxar 5,769 49,200 Darbhanga 18,383 207,150 E.Champaran 16,350 144,059 Gaya 3,285 27,069 Gopalganj 6,581 59,993 Jamui 2,156 20,833 Jehanabad 1,167 11,401 Katihar 7,379 87,204 Kaumur 5,527 39,749 Khagaria 3,905 50,039 Kisanganj 5,209 81,869 Lakhisarai 952 9,972 Madhepura 6,854 93,557 Madhubani 10,400 115,619 Munger 2,399 25,719 Muzaffarpur 25,253 346,009 Nalanda 6,094 54,429 Nawadah 3,100 27,970 Patna 7,587 71,084 Purnea 9,290 131,586 Rohtas 10,010 73,225 Saharsa 8,356 108,032 Samastipur 15,968 196,207 Saran 9,292 84,890 Sheikhpura 1,429 13,953 Sheohar 4,703 44,749 Sitamarhi 9,598 97,098 Siwan 6,541 62,620 Supaul 3,705 44,934 Vaishali 17,486 234,250 W.Champaran 13,662 130,888 Bihar 291,592 3,192,177 Source : The Fertilizer Association of India. Indicus Analytics Pvt. Ltd. Page nd 84 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Banking Sector: Table 4.5: Number of Reporting Offices, Aggregate Deposits and Gross Bank Credit (Quarterly) of all Banks in Bihar (June, 2009) District No. of Offices Deposits (Rs. Crore) Credit (Rs. Crore) Araria 99 1,174 497 Arwal 39 469 118 Aurangabad 124 1,887 529 Banka 65 820 289 Begusarai 133 2,170 711 Bhagalpur 146 2,911 831 Bhojpur 168 2,894 671 Buxar 104 1,541 469 Darbhanga 242 3,245 746 Gaya 237 3,832 1,078 Gopalganj 159 2,334 658 Jamui 82 1,031 270 Jehanabad 53 959 242 Kaimur 89 985 500 Katihar 125 1,517 718 Khagaria 77 851 283 Kishanganj 72 710 381 Lakhisarai 54 856 196 Madhepura 79 1,267 387 Madhubani 241 2,649 684 Munger 82 1,836 371 Muzaffarpur 273 4,528 1,886 Nalanda 178 2,511 622 Nawada 108 1,240 372 W. Champaran 187 1,974 917 Patna 441 27,234 5,995 E. Champaran 229 2,812 1,104 Purnia 132 1,804 892 Rohtas 160 2,385 961 Saharsa 82 1,336 403 Samastipur 212 2,714 1,015 Saran 210 3,504 927 Sheikhpura 35 509 141 Sheohar 28 304 87 Sitamarhi 144 1,652 639 Siwan 208 3,546 709 Supaul 93 1,285 362 Vaishali 174 2,587 754 Bihar 5,364 97,863 28,416 Source: Reserve Bank of India Note: All Regional Rural Banks, Scheduled Commercial Banks and Other Scheduled Commercial Banks included Indicus Analytics Pvt. Ltd. Page nd 85 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Crim: Table 4.6: District-wise Incidence of Cognizable Crimes (IPC) in Bihar (2007) Attempt to Kidnapping & Districts Murder Commit Murder Abduction Dacoity Araria 48 185 27 41 Arwal 19 12 4 5 Aurangabad 68 12 35 29 Bagaha 37 8 58 4 Banka 56 12 34 24 Begusarai 100 145 85 8 Bettiah 61 8 17 12 Bhabhua 50 28 25 7 Bhagalpur 92 85 76 15 Bhojpur 112 133 57 11 Buxar 36 75 32 11 Darbhanga 72 109 91 10 Gaya 157 170 59 48 Gopalganj 48 79 21 11 Jamui 51 30 31 20 Jehanabad 40 16 27 11 Katihar 77 50 142 17 Khagaria 48 70 44 8 Kishanganj 23 12 65 7 Lakhisarai 32 21 36 5 Madhepura 65 18 36 12 Madhubani 76 176 71 17 Motihari 111 88 104 25 Munger 76 63 52 5 Muzaffarpur 155 26 173 35 Nalanda 102 62 105 18 Naugachia 30 10 14 2 Nawadah 75 103 29 7 Patna 332 125 321 68 Purnea 101 79 143 31 Rohtas 89 207 29 11 Saharsa 50 123 35 9 Samastipur 78 205 98 14 Saran 112 345 41 39 Sheikhpura 25 13 11 6 Sheohar 25 24 8 1 Sitamarhi 55 14 52 27 Siwan 80 61 75 24 Supaul 44 73 34 11 Vaishali 120 35 131 9 Bihar 3,034 3,113 2,530 686 Source : Ministry of Home Affairs, Govt. of India. Indicus Analytics Pvt. Ltd. Page nd 86 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Infrastructure: Table 4.7: District-wise Number of Gram Panchayat Villages with Post Offices in Bihar (March, 2005) District No. of GP Village with Post Office (PO) Araria 200 Arbal 77 Aurangabad 185 Banka 131 Begusarai 207 Bettiah (W. Champ.) 221 Bhagalpur 194 Bhojpur (Arrah) 208 Buxar 119 Darbhanga 266 E. Champ (Motihari) 365 Gaya 197 Gopalganj 160 Jahanabad 98 Jamui 104 Kaimur (Bhabhua) 95 Katihar 195 Khagaria 109 Kishanganj 111 Lakhisarai 106 Madhepura 190 Madhubani 280 Munger 101 Muzaffarpur 291 Nalanda (Bih. Sharif) 222 Nawada 100 Patna 199 Purnea 231 Rohtas (Sasaram) 261 Saharsa 193 Samastipur 253 Saran (Chapra) 257 Sheikhpura 98 Sheohar 106 Sitamahri 180 Siwan 231 Supaul 124 Vaishali ( Hajipur) 187 Bihar 6,852 Source : Lok Sabha Unstarred Question No. 5803, dated on 04.05.2005. Indicus Analytics Pvt. Ltd. Page nd 87 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Employment: Table 4.8: Work Participation Rate District 2001-02 2008-09 Araria 39.5 42.5 Aurangabad 33.3 35.9 Banka 39.6 41.9 Begusarai 31.8 34.1 Bhagalpur 35.3 38.4 Bhojpur 29.1 31.4 Buxar 29.1 29.9 Darbhanga 31.2 32.4 Gaya 36.8 39.4 Gopalganj 29.8 32.0 Jamui 42.7 47.0 Jehanabad 38.4 43.4 Kaimur (Bhabua) 34.4 36.1 Katihar 37.5 40.1 Khagaria 36.5 39.0 Kishanganj 32.2 31.6 Lakhisarai 36.5 38.7 Madhepura 44.8 49.3 Madhubani 34.3 35.6 Munger 29.1 29.1 Muzaffarpur 30.4 31.4 Nalanda 38.1 41.5 Nawada 37.3 40.9 Pashchim Champaran 37.9 39.9 Patna 30.2 32.1 Purba Champaran 32.7 33.9 Purnia 37.8 38.7 Rohtas 30.4 31.8 Saharsa 39.1 41.5 Samastipur 31.6 33.9 Saran 26.5 28.0 Sheikhpura 37.0 38.9 Sheohar 31.2 32.1 Sitamarhi 31.9 33.3 Siwan 26.9 28.9 Supaul 42.0 44.0 Vaishali 28.8 31.0 Source: Census of India (2001), Indian Development Scape 2008, Indicus Analytics (2008) Note: Work Participation Rate is defined as percentage of total workers (main+marginal) to the total population. Indicus Analytics Pvt. Ltd. Page nd 88 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 4.9: Rural BPL Population, Job Cards Issued, Employment Provided, and Funds Released under NREGA in selected districts in Bihar (As on 30.6.2006) No. of Persons Provided Funds Released District Rural BPL Persons Job Card Issued Employment (Rs. in Lakh) Araria 882,586 21,500 15,082 1,162 Aurangabad 813,404 49,616 31,018 2,000 Bhabhua (Kaimur) 550,679 45,259 6,556 1,595 Bhojpur 851,057 101,953 21,851 1,817 Darbhanga 1,337,257 51,775 20,500 2,000 Gaya 1,324,544 25,528 14,048 2,000 Jamui 573,374 32,226 17,242 1,891 Jehanabad 619,984 15,743 10,200 2,000 Katihar 961,880 87,655 81,545 2,000 Kishanganj 516,120 52,719 48,015 1,036 Lakhisarai 302,829 9,492 8,788 1,147 Madhubani 1,526,688 44,773 41,148 2,000 Monghyr 362,778 90,550 41,753 2,000 Muzaffarpur 1,504,235 75,546 27,161 2,000 Nalanda 892,594 15,984 4,621 2,000 Nawadah 740,146 23,343 3,800 1,692 Patna 1,214,231 52,611 7,502 2,000 Purnea 1,027,250 61,815 54,450 996 Rohtas 940,124 63,170 3,177 1,992 Samastipur 1,457,460 76,311 30,269 2,000 Sheohar 218,382 4,039 2,394 1,188 Supaul 734,129 10,329 9,913 1,987 Vaishali 1,118,979 59,585 4,248 2,000 Total 20,470,711 1,071,522 505,281 40,503 Source: Compiled from the statistics released by : Rajya Sabha Starred Question No. 51, dated 26.07.2006. Note: NREGA - National Rural Employment Guarantee Act., BPL - Below Poverty Line. Indicus Analytics Pvt. Ltd. Page nd 89 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Educatio: Table 4.10: Total Literacy Rate District 2001-02 2008-09 Araria 35.0 40.5 Aurangabad 57.0 63.8 Banka 42.7 47.8 Begusarai 48.0 54.6 Bhagalpur 49.5 54.3 Bhojpur 59.0 65.2 Buxar 56.8 63.3 Darbhanga 44.3 50.1 Gaya 50.4 56.3 Gopalganj 47.5 54.8 Jamui 42.4 48.0 Jehanabad 55.3 60.9 Kaimur (Bhabua) 55.1 63.6 Katihar 35.1 39.2 Khagaria 41.3 46.9 Kishanganj 31.1 36.7 Lakhisarai 48.0 53.3 Madhepura 36.1 41.4 Madhubani 42.0 47.5 Munger 59.5 63.9 Muzaffarpur 48.0 55.0 Nalanda 53.2 57.1 Nawada 46.8 51.7 Pashchim Champaran 38.9 45.5 Patna 62.9 66.9 Purba Champaran 37.5 43.6 Purnia 35.1 39.4 Rohtas 61.3 68.3 Saharsa 39.1 44.8 Samastipur 45.1 50.5 Saran 51.8 57.8 Sheikhpura 48.6 53.4 Sheohar 35.3 41.0 Sitamarhi 38.5 44.7 Siwan 51.6 58.8 Supaul 37.3 43.0 Vaishali 50.5 56.4 Source: Census of India (2001), Indian Development Scape 2008, Indicus Analytics (2008) Note: Literacy rate of population is defined as the percentage of literates to the total population aged 7 years and above. Indicus Analytics Pvt. Ltd. Page nd 90 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Health: Table 4.11: Infant Mortality Rate District 2001-02 2008-09 Araria 65 64 Aurangabad 63 60 Banka 56 48 Begusarai 58 49 Bhagalpur 52 42 Bhojpur 55 54 Buxar 53 50 Darbhanga 60 52 Gaya 59 50 Gopalganj 46 45 Jamui 58 51 Jehanabad 60 54 Kaimur (Bhabua) 68 68 Katihar 71 61 Khagaria 52 46 Kishanganj 77 66 Lakhisarai 60 54 Madhepura 60 48 Madhubani 59 51 Munger 55 47 Muzaffarpur 64 59 Nalanda 62 56 Nawada 59 51 Pashchim Champaran 57 48 Patna 50 46 Purba Champaran 59 55 Purnia 63 55 Rohtas 55 47 Saharsa 57 46 Samastipur 54 45 Saran 56 46 Sheikhpura 62 58 Sheohar 72 59 Sitamarhi 74 62 Siwan 48 39 Supaul 57 46 Vaishali 48 46 Source:Census Estimates by Population Foundation of India (2001), Indian Development Scape 2008, Indicus Analytics (2008) Note: IMR - The number of infant deaths per thousand live births. Indicus Analytics Pvt. Ltd. Page nd 91 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Table 4.12: District-wise Availability of Health Centres in Bihar (As on March, 2007) Number of Number of Community Number of Sub Primary Health Health Centres District Centres (SCs) Centres (PHCs) (CHCs) Araria 200 39 3 Arwal 46 26 0 Aurangabad 207 69 3 Banka 227 34 3 Begusarai 288 42 2 Bhagalpur 280 57 2 Bhojpur 331 37 2 Buxar 162 25 0 Darbhanga 261 64 2 Gaya 439 68 2 Gopalganj 186 32 3 Jamui 166 31 3 Jehanabad 81 29 2 Kaimur (Bhabua) 107 26 2 Katihar 257 43 3 Khagaria 151 24 1 Kishanganj 136 16 2 Lakhisarai 102 17 1 Madhepura 115 30 1 Madhubani 430 95 2 Munger 123 19 1 Muzaffarpur 473 61 1 Nalanda 302 48 3 Nawada 129 37 2 Pashchim Champaran 389 41 2 Patna 418 86 4 Purba Champaran 315 66 3 Purnia 278 45 2 Rohtas 186 53 1 Saharsa 152 40 0 Samastipur 354 73 1 Saran 413 60 3 Sheikhpura 74 21 1 Sheohar 34 10 1 Sitamarhi 213 51 1 Siwan 370 49 2 Supaul 178 37 1 Vaishali 336 47 2 Bihar 8909 1648 70 Source: Ministry of Health & Family Welfare, Govt. of India. Indicus Analytics Pvt. Ltd. Page nd 92 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Bibliography Central Statistical Organization (CSO). Economic Survey, 2009-10. Eleventh Finance Commission Report, 2000. Human Development Report 2001, Planning Commission. Srivastava Ravi (2003), Professor at Department of Economics, JNU, led the study team in India. Understanding Poverty and Vulnerability in India’s Uttar Pradesh and Bihar: A Q- squared Approach, Barbara Parker and Valerie Kozel, Q-Squared Working Paper No. 9 October 2005. Ministry of Commerce & Industry, Govt. of India. Market Skyline of India, 2008, Indicus Analytics. India Today, Yearender 2009, State Scan - Patna: P For Progress, Amitabh Srivastava. DLHS (District level Household Survey) I, II and III. Reserve Bank of India, Respective Years. Budget Documents of the State Governments. Crime in India, National Crime Record Bureau, Respective Years. Ministry of Rural Development, PMGSY (Pradhan Mantri Gram Sadak Yojana). ‘Bihar, A Growth Story’, Times Of India, January 10, 2010. Cement Manufacturers' Association. Selected Educational Statistics (SES), respective years. Sample Registration System (SRS) Bulletin. Registrar General of India, Directorate General of Health Services, Ministry of Health & Family Welfare, Govt. of India. Ministry of Health and Family Welfare, Govt. of India. National Health Profile (NHP) 2008. Indicus Analytics Pvt. Ltd. Page nd 93 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net
  • Bulletin on Rural Health Statistics in India 2008. Infrastructure Division, Ministry of Health and Family Welfare, Government of India (MOHFW/GOI). Ministry of Tourism, Govt. of India. Ministry of Agriculture, Govt. of India. Bihar, Towards a Development Strategy, World Bank, http://siteresources.worldbank.org/INTINDIA/Resources/Bihar_report_final_June2005.pdf. Mohan Guruswamy, Ramnis Attar Baitha and Jeevan Prakash Mohanty, “Centrally Planned Inequality, the Tale of Two States – Punjab and Bihar” published by Centre for Policy Alternatives, New Delhi, in 2004. Mohan Guruswamy and Jeevan Prakash Mohanty, “De-urbanisation of Bihar,” published by Centre for Policy Alternatives, New Delhi, in 2004. http://www.indianetzone.com/9/districts_bihar.htm, Accessed on 17th May 2010 Census of India 2001. Ministry of Environment and Forest, Govt. of India. Fertiliser Association of India. Ministry of Home Affairs, Govt. of India. Indian Development Scape 2008, Indicus Analytics (2008). Reproductive and Child Health (RCH) Facility Survey 2000 Indicus Analytics Pvt. Ltd. Page nd 94 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002 Email: mail@indicus.net