Bihar`s growth story concentrated in cities, says new book

Updated: Apr 22, 2013, 09:45 AM IST

New Delhi: As Bihar`s growth story under the Nitish Kumar administration gets increasingly talked and written about, a book based on a study of the state over the past three decades contends that development has been highly concentrated in urban areas while manufacturing and agriculture have seen little growth.

The book attributes the improvement in economic growth primarily to the tertiary sector and the service industry, noting that while the former has grown, the primary sector - agriculture and allied activities - remains stagnant.

The book, titled `The Challenge of Inclusive Development in Rural Bihar`, that was released Friday, is published by Institute for Human Development, a non-profit institution that studies development-related issues.

"The improvement in economic growth can primarily be attributed to the considerable rise in the growth rates of sectors such as transport and communication, trade and construction. The construction sector has in fact played the most significant role...," say authors Gerry Rodgers, Alakh N. Sharma, Amrita Datta, Janine Rodgers, and Sunil K. Mishra.

The book is based on a longitudinal study of several villages in Bihar between 1981 and 2011.

It has highlighted that the growth in construction has witnessed a big boom, reaching an annual growth rate of almost 20 percent during 2004-05 to 2010-11, compared to 12 percent in 1999-2000 to 2004.

"There has also been substantial growth in the services sector, especially in transport, trade and hotels," it said.

However, the manufacturing and agricultural sectors have seen little growth.

"The pattern of growth appears to be unbalanced, mainly reflecting the construction of roads and housing, and the consequent expansion in trade, service and related activities. Moreover, Patna the state capital, accounts for the largest share of this growth," the book added.

According to Economic Survey, Bihar recorded a double digit growth of 11.95 percent in the 11th Plan period (2007-12), the highest among all states. The state, which is one of the most backward in the country, has been demanding a special economic package. The Congress-led United Progressive Alliance (UPA) government finally heeded to Bihar Chief Minister Nitish Kumar`s demand and on April 18 cleared a special package of Rs.12,000 crore.

The book stresses that the biggest problem continues to be poor infrastructure and says the state is caught in a "vicious circle of low investment caused by low level of economic development and widespread poverty".

"The pattern of growth in Bihar itself tells what is wrong. The infrastructure is in shambles and population growth is high," said senior journalist Prem Shankar Jha at the book launch.

"Domination of economic policies by economists has led to neglect of historical factors. Bihar and the adjacent area was the richest before the battle of Plassey (1757), and was looted beyond imagination by the British colonialists. Post-independence, instead of repairing the damage, we became the new colonialists sitting in Delhi," he said.

Jha added that the lack of investment from the private sector is a major lacunae and the government alone should not be held responsible for ignoring the region.

"The fact that the imbalance has been created by lack of private investment has still not sunk in," he said.

However, there are positive developments on the rural front as well, mainly in the form of change in the caste equations and breaking of the semi-feudal agrarian system.

"The biggest change is in the agrarian structure of the state. Bihar is known for the semi-feudal structure, but that is now breaking down. Though the caste-class equations are still there, the relation between the landowner and the tiller has moved from being a landlord-labour relation to a market force-oriented one," said Alakh N. Sharma, one of the authors of the book.

"Also, there is diversification in landholdings, with a lot of middle level castes having ownership of land," he said.

Author Gerry Rodgers says there is a gap between the projected double digit growth and the real picture on the ground, terming it worrisome. "We are worried about the gap in the double digit growth and the situation. Sometimes we wonder what is that they are measuring," he said.