Year 2010 opened on good news of a kind that few of us were expecting. Central Statistical Organisation (CSO) data showed that in the last five years, Bihar clocked a growth rate of a little over 11%. It was second only to Gujarat albeit on a smaller base and also many of the formerly referred to as Bimaru states such as Orissa and Rajasthan have also posted good growth numbers though not as good as Bihar.
Does this data indicate a change in fortunes of Bihar?
In an interview with CNBC-TV18, NK Singh, former member of Planning Commission and currently Rajya Sabha Member from Janta Dal (U) and Arjun Sengupta, former member of PM's Economic Advisory Panel and currently Member of Parliament debate whether this was a one-off for Bihar or is the growth really sustainable.
Below is a verbatim transcript of the interview.
Q: Were you surprised at the numbers you saw with regards to Bihar’s growth rate for the last five years or were you expecting this considering that it comes on a pretty small base in that sense in comparison to other states? Do you believe that it is a turn in the fortunes of Bihar?
Sengupta: I must say that the numbers as they appeared were rather difficult to believe but I have a strong belief in the Indian statistical system. So I would rather go by attempts to explain these numbers then by just saying that these numbers are not correct. The reason why one can feel that there must be something wrong in these numbers is a sudden jump. For example in the case of agriculture, it gives a rate of growth of 7.5% over the five years, which is substantially higher than most other places.
In industry it moves from a negative figure to about 22% figure and the construction figure is 45%. It’s a very large number. These are rather implausible but not impossible. It is not something you should say that it can never happen but the most important thing is that if these numbers are true, then definitely we have reached a new phase of our economic development because these are the poorest states. These are the most backward states. Bihar is first in them then Jharkhand, Orissa – all of them have shown remarkable improvement according to these numbers.
So I would love to believe them. I would love to see that these numbers now indicate that we are moving into a new era but I would say all these things with a bit of caution that maybe they are not quite correct but let us try to understand.
Q: What is your response to that?
Singh: Arjunda is being cautious but he has also conceded that as far as the Indian statistical system is concerned, they are fairly robust, methodology is employed. These numbers of course came at a very pleasant surprise to me personally because when I was the Deputy Chairman of Bihar State Planning Board and I was finalizing the Bihar’s 11th Five Year Plan, I was hoping that towards the last year’s plan, we would be able to achieve somewhere between 8-9%, which will enable Bihar’s growth rate to try and mirror what the national averages are and therefore I was also pleasantly surprised that not only have we achieved that, we have surpassed the target, which Bihar had laid for itself in the 11th Five Year Plan clocking 11.03%.
But I am not surprised at another level because I realized that apart from the low base – no doubt from where we have started – improved governance factors, improved security scenario and improved climate overall in terms of fostering gainful economic activity the trigger with which it has happened, in terms of construction which Arjunda rightly pointed out has registered a very high rate of growth. The road building activity in terms of what we have done by facilitating a better regulatory framework for the urban sector.
Of course on the agriculture sector, I think also the Nitish’s special effort in an agricultural action plan which tends to improve agricultural productivity with a very robust seed replacement programme and what he calls rainbow agriculture, which given the adverse land bank ratio in Bihar in fragmentation of land holding, the emphasis on farmers pursuing agriculture along with elide activities, horticulture, fisheries, dairies and so on improves farm incomes very significantly.
So I can see a conciliation of factors ranging from improved security scenario, to improve regulatory framework, laws and policy of fostering development centric but socially cohesive policy with which I think seem to have been benefited from.
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