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Tuesday, October 20, 2020

Out of Darkness

A collection of essays looks at the Bihar turnaround,and what remains to be done.

Written by Prachi Mishra | August 24, 2013 2:47:31 am

Book: The New Bihar: Rekindling Governance and Development

Author: Edited by N.K. Singh and Nicholas Stern

Publisher: Harper Collins

Price: Rs 799

Pages: 387

Few people are more qualified to write about the “new Bihar” than N.K. Singh and Lord Nicholas Stern. Singh was born in Patna and is currently a member of Parliament (Rajya Sabha) representing the state. He has had a long association with Bihar and has contributed significantly to policy-making in the state. Lord Stern is currently the I.G. Patel Professor of Economics and Government at the London School of Economics and has also been keenly involved in Bihar through the International Growth Center,UK,which opened its Bihar chapter in 2009. The book is a collection of essays by various prominent authors; though admittedly there is considerable variation in the quality of essays. The editors,however,have done a remarkable job in bringing together an illustrious list of contributors.

As characterised in the book,Bihar is truly an “enigma”. Various chapters in the book lucidly take us through the Bihar story. Indeed,Bihar had a glorious past since the Mauryan empire and was a pioneer in several areas,including health,education,governance,infrastructure and social equity. Yet its glory started waning due to both factors intrinsic to Bihar (e.g. weak governance,inadequate infrastructure,etc.),and external ones

such as the freight equalisation policy (whereby basic raw materials were available at the same price throughout the country; thereby rendering

a comparative disadvantage to states like Bihar which were rich in minerals).

More recently,the real per capita income was almost stagnant between 1990 and 2005. The focus during this period was mainly on the empowerment of those perceived to be underprivileged,rather than broader development issues. After 2005,when the NDA came to power,there was indeed a turnaround. Bihar’s growth took off. The average growth in real per capita income increased ten-fold between 2006 and 2012 (relative to 1991-2005). The book stresses four key elements of the turnaround story: improvement in law and order,education,health,and infrastructure,though not in any order of importance.

In my view,the most salient point that emerges from the book is that although Bihar can indeed rejoice over being one of the top performers among Indian states in terms of “changes” in various development indicators,it cannot afford to be complacent,as “levels” of most of these indicators remain desperately low. Bihar’s robust performance is a relatively recent phenomenon. It still has the lowest score on the Human Development Index among Indian states,low levels of urbanisation and industrialisation,high poverty rates and inadequate infrastructure,especially,power,water and sanitation. It will require many more years of robust growth and sustained improvement in other development indicators to overcome the poor development legacy of Bihar.

The last seven years might be the beginning of a radical change in Bihar. The book lays out several reasons to be optimistic,the foremost being a young population,younger than in the rest of India. However,as outlined in Chapter 2 of the Economic Survey,2012-13,seizing the so-called demographic dividend might be a daunting task. The dividend may turn into a demographic curse if there are not enough jobs for the youth. The Bihar growth story is explained primarily by an increase in the share of construction and services. In sharp contrast,the share of manufacturing has been stagnant. As argued in the survey,the real challenge is to create the conditions for faster growth of productive jobs outside of agriculture,especially in organised manufacturing and services,even while improving productivity in agriculture.

The book also identifies emerging challenges for Bihar. Reviving the power sector and infrastructure in general remain key challenges. Urbanisation,raising the productivity in agriculture and reviving the higher education sector,which has been completely ignored till now,are correctly identified as core areas that can serve as the springboard for the next leap. The chapter on migration brings out the interesting perspective that migration can bring huge benefits to Bihar through remittances and through tapping the diaspora. There is also a chapter which discusses a holistic strategy for e-governance — probably a bit too ambitious at the stage of development where Bihar is.

To summarise,the book presents a holistic narrative of Bihar,going back to ancient times. It is timely as both the citizens and the government must realise at this juncture that despite the recent optimism,the challenges that

Bihar faces remain formidable.

Prachi Mishra is a senior economist with the office of the Chief Economic Advisor

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