Mind The Shadows

Planning Commission member Dr Abhijit Sen says the 11 per cent jump in Bihar’s gross state domestic product is the result of a “lot more government money being spent” on improving infrastructure and other social development projects”. Of course, there has been a rise in growth rate in all the laggard states in the last few years, during which India clocked an average of over 8 per cent GDP growth. “In Bihar, the base too was particularly low,” says Dr Sen.

There is no denying that Bihar has been spending more on improving governance at the local level, raising enrolment at primary and secondary school levels, and upgrading health services. As Rajya Sabha member and advisor to the Bihar government N.K. Singh underlines, there has been a dramatic rise in public spending, including capital outlay, to Rs 2,000 crore annually towards improving infrastructure and social development. That compares well with the Rs 1,500-crore public outlay in the five years prior to 2004.

Experts, however, stress that, like many other states, Bihar too has been witnessing uneven growth. Several government-funded programmes like rural housing, self-employment, sanitation are lagging for want of proper implementation. This has resulted in the state not utilising funds allocated to it. “Bihar is very asymmetrical in terms of fund absorption,” says Arvind Mayaram, additional secretary & financial advisor, Union ministry of rural development. “Its offtake of central funds, though better than before, is not up to desirable levels. The state is moving, but requires a little more push.”

Visits to Bihar last month revealed that though the state has taken a forward step in introducing food coupons to plug leakages in the pds mechanism, the beneficiaries more often than not have to wait for weeks, if not months, to avail of the subsidised foodgrains. Result: pds accounts for just two per cent of the total consumption of bpl families. Most blame the shortcomings to bureaucratic apathy, with some Bihar-watchers saying that despite the change in perception, “bureaucratic efficiency does not seem to have picked up in any way”.

What has perked up hope among locals, in rural Bihar in particular, is Nitish Kumar’s signal to politicians that no protection would be provided if they broke the law or got embroiled in any political controversy. Based on his study, Prof Muchkund Dubey, president, Council for Social Development, states, “Both farmers and non-farm people are taking heart from better law and order to spend their own resources to start small and medium enterprises. But outside resources or investments by big corporates is still not happening.”

Contrary to government claims, studies on the ground reveal that 90 per cent of the big investment proposals signed till last year are still to take off. Here, remittances from Biharis working in other states or overseas are helping to fill the gap. The main culprit is the huge unmet demand for power supply. The current shortfall is 550 MW. “Though there has been some increase in plan outlay, it is hugely inadequate if you compare it with other states,” says N.C. Saxena, former advisor to the prime minister.

Saxena points out that while Bihar and Andhra Pradesh have the same population size, the former’s plan outlay of Rs 13,000 crore in 2008-09 is no patch on AP’s Rs 44,000 crore outlay. Chhattisgarh, with one-fourth of Bihar’s population, had a plan outlay of Rs 9,500 crore. In a recent presentation to the Bihar government, Saxena pointed out that the per capita expenditure in Bihar remains the lowest, at Rs 1,465, compared to over Rs 3,500 in AP and Chhattisgarh.

Whether it is external aid or the NREGS, Bihar still has to reap its dues. The shortcomings in large part remain that of the state, which does not fully utilise the funds available even for central government-funded programmes like the Integrated Child Development Services (ICDs). The vacancies in the ICDs programme are as high as 92 per cent. Similarly, while primary teachers have been employed in large numbers and school buildings have been improved, the teaching quality remains dismal in most of them.

Despite government claims that in 2007-08, around 50 per cent of the total public expenditure in medical and public health was made in rural areas, up from 46 per cent in the previous year, locals remain dissatisfied. They point out that while district and sub-regional hospitals have been upgraded, primary healthcare centres remain woefully inadequate, forcing people to seek expensive private care. “Qualitatively, there has been no dramatic change in governance or move towards inclusive growth,” says Manoj Rai of PRIA, an NGO that has been undertaking leadership training of panchayat representatives in many states. “The situation was so bad earlier that the little that has been done has made a difference on the ground.”

PRIA consultations with representatives of panchayats in Bihar reveal that people are benefiting from having more net disposable income, with the ‘unnecessary expenditure’ of paying weekly bribes having stopped in most cases. Not just traders, even farmers have more resources now to reinvest in more profitable ventures. Rai, however, fears that unless local capacity in terms of investment, leadership and institution-building is not focused on, “this growth cannot sustain. This is the maximum that could have happened in the improved scenario”.

A major challenge ahead of the Bihar government is how to raise agriculture growth, since unlike its dipping share in the national GDP, the farm sector contributes around 40-45 per cent to Bihar’s GDP. As Ramesh Chand of the National Centre for Agricultural Economics and Policy Research points out, there has been no break from the past trend in the agriculture sector in Bihar. This is important, as over 80 per cent of Bihar’s population lives in rural areas, where recurrent droughts and floods tend to play havoc with lives and property.

N.K. Singh admits that there are many challenges ahead. “We have a long way to go to close the gap with other developed states. We will have to sustain the high growth for another 10 years to do so,” he says. The high growth numbers are definitely a historic first for Bihar. But psychological boosts do not make for a development turnaround.