January 21, 2020
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Return To Pataliputra

Saddled with poverty, illiteracy and the country's lowest per capita income, is there no hope for Bihar? Sheela Reddy asks diverse experts with one thing in common—a homebase in Bihar—to provide a blueprint for transforming their state.

Return To Pataliputra
Anwarul Hoda, Member, Planning Commission
"Infrastructure can be built only after Bihar restores order within. Recently, not a single bid was received for a big road project."

The first step is to bring orderliness, it is the bedrock for any development in the state. This can only be done by the top political leadership. Kidnappings have to stop, and for that you need a strong administration from the top. Only five or six gangs are terrorising the state, the administrative machinery seems to have crumbled.

Two, build infrastructure—roads and power projects. But this will only happen after Bihar sets its house in order. Recently, for instance, not a single bid was received for the construction of a national highways project road in north Bihar. The contractors were so terrorised.

Three, start reviving industrial areas. The state has seen a frenzied flight of industry over the decades. Even the sugar industry has migrated to west Maharashtra and Tamil Nadu.

However, the key to development in Bihar lies in agriculture. Despite all the disorder, agriculture production has improved. Bihar has the soil, water, hard-working people—what else do you need? Labour from here was carried all over the world for agricultural work. There are good prospects, therefore, for agro-industries like rice-milling, wheat flour, litchi preservation. Whatever little food processing industry there was in the state has closed down. Software industry is also an option because there is a large number of Bihari youth educated outside the state who can’t return because there are no jobs in the state.

Dipankar Bhattacharya, (General secretary, CPI-ML)
"It’s a feudal-criminal-administration nexus that rules the state. A thorough overhaul of the civil and police set-up is needed."

Land reforms still hold the key to any meaningful democratisation of rural life and any major agricultural advance. Apart from a significant increase in public investment in agriculture, irrigation and flood control, Bihar certainly needs a new blueprint for industrialisation. The country has a stake in Bihar’s development and a special central fund must be created to support infrastructural and industrial growth in the state. On criminalisation, the problem lies in the state’s ties with gangs and private armies. A thorough overhaul of the civil and police administration is needed.

Kamala Prasad, (Former chief secretary, Bihar)
"A more equalising economic development will be a fitting complement to the social churning going on in the state."

Weakening of institutions has been a major handicap. The time has come for non-political advocacy groups to explore emerging development identities and mount pressure on the political leadership to nurture them. This can be greatly helped by a five-fold agenda. First, a credible think-tank with institutional support to suggest directional change must be set up. Support from the Centre, RBI and central research institutions should sustain it. Second, resources should be used on developing the core physical infrastructure of water, electricity and roads. This should also be guided by a market development strategy for economic viability. Third, overall, an alternative area-specific sector-balance strategy should be built into a model rooted in the growth of the rural economy. Fourth, resources from within must be mobilised and funds from institutional sources and international agencies tapped. It has been proven that private investment comes only on the base of public investment. Finally, a vision that avoids controversies and fosters consensus.

Praveen Kumar Jha, (Associate professor, economics, JNU)
"While Bihar governments have a lot to answer for, the state has been a victim of systematic neglect by the Centre."

The road to recovery is threefold. One, land reforms. Bihar’s agrarian structure is possibly the most important reason for its backwardness.Transformation of the agrarian structure, through land and tenancy reforms, plays a direct role in stimulating growth by providing, for instance, greater incentives for productive work. There are pervasive indirect effects of agrarian reform.

Two, better infrastructure. A few years ago, I had compared the per unit cost of irrigation in Bihar and Punjab; in the former it was almost 35 times higher! Every aspect of infrastructure in Bihar is in a shambles. During the ’90s, almost 6,000 villages got effectively de-electrified! Three, more central funds. Sure, there is a lot for which the successive Bihar governments are answerable but it is equally important to recognise that Bihar has been a victim of systematic neglect by the Centre, particularly in recent years.

Shaibal Gupta, (Asian Development Research Inst., Patna )
"FIs have to step up their investments. In 2001, FIs invested Rs 1,03,438 cr in the country. Bihar’s share was 0.14 per cent."

If India wants to join the global economy by 2020, there has to be an annual investment of Rs 38,550 crore in Bihar. While increased investment is needed for agriculture to grow at the required rate of 5 per cent per annum, investment in the sector has been actually declining: only Rs 79 per acre (at current prices) during the eighth Plan, down from Rs 196 in the fifth Plan.

It’s the same with industrial development. As a result of freight equalisation, no investment was made in the state. Where will these investments come from? Mainly from three agencies: the Bihar government, direct central investment, and investment in private sector. The credit deposit (CD) ratio of the commercial banks, which is 23 per cent, may have to be suitably enhanced. There are 31 non-banking FIs in the state, but most of them are siphoning away money. This trend has to be reversed.

Bindeshwar Pathak, (Chairman, Sulabh International)
"The state must stop being the only provider of hidden unemployment. Politics based on postings, transfers has to be abandoned."

Self-Help is the best help for Bihar. This means developing sectors related to the rich natural resources in Bihar. Agro-based industries—food, vegetable, fruit processing, dairy and allied activities and fisheries have vast scope, as have jute and sugar. These industries need to be modernised and the related infrastructure—market yards, chain of cold storages—improved.

A great deal of expenditure can be reduced if the state-run corporations, which have outlived their utility, are disinvested. As for low the CD ratio and lack of external aid, the main drawback has been paucity of bankable projects. The state government has no cadre capable of formulating financially acceptable projects. It’s necessary to have national financial institutions located in the state. The importance of mobilising more resources, recovering dues, and promoting religious tourism cannot be over-emphasised.

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