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Bihar: A decade of progress

By Anand Mishra
In Bihar
February 8, 2016
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Nitish-kumarThe recent electoral victory of Nitish Kumar, third in a row, has underscored the growth and governance style pursued by him over last decade. When he assumed office in 2005, the state was suffering from a negative image, low growth and broad despondency. However, over the last decade, the tide has changed and the most important indication of this growth has been the high economic growth rate clocked by the state during this period. The state recorded a growth rate of nearly 18 per cent at current price during 2014-14. In 2004-05, the Gross State Domestic Product (GSDP) was Rs 77,781.16 crore, which increased in 2014-15 to Rs 402,282 crore. The image of the state has also undergone a tremendous uplift.

Bihar’s economic growth has been strong under Nitish Kumar’s tenure as Chief Minister. Further, its performance in agriculture was second only to Madhya Pradesh. Also, on most socio-economic indicators, post 2005, the performance of the state is not only better than its own performance in the previous decade, but also than that of comparable states or the national average. And in this developmental paradigm, as an ASSOCHAM study released in 2013 showed, public investment has played the most important role, acting as stimulus to growth.

The data shows that the state grew at a high compounded annual growth rate of 10.6 per cent 2005-06 to 2014-15, among the highest in the country and higher than comparable states like Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and West Bengal. This was achieved with agriculture growing at a compounded rate of 5.7 per cent, implying that secondary and tertiary sectors, including services have performed exceedingly well over the last decade. The state also recorded a healthy 8.1 per cent average annual growth rate in industrial jobs, much higher than all India average growth rate of 5.2 per cent.

Nothing symbolizes the development of the state than the high quality roads that now criss-cross the state. In ten years till 2015, the state government constructed 66,508 km major and rural roads. Over 5,000 bridges were also constructed during this period. On power front, almost all villages of the state are now getting electricity supply of over 12 hours a day, underscoring the improved power availability scenario. Per capita consumption of electricity in the state increased from 70 kWh in 2005 to 203 kWh in 2015. The improvement in governance is also visible from the fact that the leakages from the public distribution system came down from 75-90 per cent during early 2000s to less than 25 per cent today. Experts have cited strong political will and institutional strengthening for improvement in service delivery.

What has set the developmental pattern of Bihar apart from other states is the focus on inclusiveness and on ensuring that the benefits of government schemes reach the ground. This approach has led to improvement in all social indicators. The state has reduced poverty at a rapid clip and so has the infant mortality rates. On education front, more children are today staying at school. In 2005, 12 per cent children were out of school which has now come down to 1.72 per cent. Improved healthcare coverage is visible in immunization which now stands at nearly 80 per cent which was less than 20 per cent when Nitish Kumar assumed office. Today, more girls are in school than ever in the history of the state.

But challenges are still galore for the new government. Even though growth has been sterling to say the least, it has come at a low base, which means the government has to do a lot to pull up the income of an average citizen of the state. Bihar still is at third spot in percentage of people below poverty line. The industry is still not contributing enough to the state GDP and the unemployment is high. All this means the government needs to redouble on pursuing the reform agenda. Clearly the Nitish Kumar led government has its task cut out.