Bihar Election Part 1 – Bihar’s Economy

I have started a new series of articles about Bihar election. In the first article, I will focus of Bihar’s economy.

Bihar has certainly progressed in last 10 years of Nitish rule after 15 years of Jungal raj under Lalu. But is the progress enough? Not certainly, Bihar needs to do much more than what she is doing now for even matching the pace of India.

A shocking fact – Even small sate like Haryana’s GDP is more than that of Bihar. Bihar has roughly 8.2% population of India but its share of GDP is just 3.28% (marginally ahead of Punjab). Bihar has the lowest per capita GDP in India. Bihar’s per capita GDP (Rs 31199) is 58% less than the Indian per capita income of Rs 74380.  The real shame id that only 5 % of Bihar’s GDP comes from industrial sector. Only 11 % of Bihar’s resident live in cities (again lowest in India) whereas @ 40-50% people live in cities in Tamil Nadu & Maharashtra. Bihar’s electricity consumption is less than that of Bangalore city. Bihar’s literacy rate (63.4%) is lowest in India and its HDI (Human Development Index) is 0.367 which is comparable to sub Saharan African countries. Bihar’s per capita income is just 360 USD per year compared to national average of 1265 USD. Bihar has fewer Engineering colleges than Belgam district of Karnataka. There are still thousands of villages which don’t have electricity & pakka roads. Bihar was the only state whose GDP declined in a few years in 90s and early 2000s.

After independence Bihar was a major producer of Sugar and now Sugar industry is in ruins. There are only a few successful industries in Bihar like dairy but Bihar has virtually no heavy industry except Barauni. The private sector employment generation is perhaps lowest in the country. The primery education in Bihar doesn’t have any standard. Even a 10^th pass from some section of society could have become a contract teacher around 6-7 years ago. There is no vigilance of Govt. teachers in Bihar that’s why coaching industry is most profitable business in Bihar. You will hardly find private banks in district headquarters. And the work culture in Govt. banks are so bad that you can’t get a loan without paying bribe unless you know some influential person. Even I was denied education load because I refused to pay bribe. My small town Dalsingh Sarai has just 4-5 ATMs and its population along with nearby villages (for whom my town is the urban area) is more than 2 lakhs. I have seen hundreds of people standing in line for withdrawing money. Banking system is non-existent.  Even opening a bank account is a tedious job in Bihar if you are a farmer or laborer (It has improved after jan Dhan Scheme).

I come from a farmer family but I have not seen Govt. procuring grains from my area in my lifetime. We don’t get seeds, fertilizers at right time at right price. Even we are not sure about the quality. In my fields there was Govt. irrigation facility but it has not worked for last 20-25 years. We had our own electric driven tube wells but the thieves took the wires and electric panels in 1987 flood and still it has not been repaired and now we are forced to use costly generator driven tube wells. Most of the Govt. subsidies are lost in corruption.  Despite having very fertile soil, Bihar’s agriculture growth is very low. I guaranty that not a single farmer in Bihar would wish to see his son as a farmer. The PDS system has improved but you will never get your full quota of Kerosene or grains.  

The lack of higher education has forced students to go to other states for completing their study. So the wealth drain is in the range of more than 200 crores. Most of the brighter minds leave Bihar permanently and this is affecting her economy. You will hardly find a tech startup in Bihar. Although service sector constitutes @ 70% of Bihar’s GDP but it is mostly Govt. driven. You will rarely find big private sector investments in Bihar. India is known for Software but there is no branch of any top 50 software companies in Bihar. 

Bihar’s economy was one of the best in India till 60s but now it lays in ruins. It is time for Bihar to find its own Lee Kuan Yew (the architect of modern Singapore).