Vous êtes sur la page 1sur 95

nd

Indicus Analytics Pvt. Ltd., 2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
BIHAR DEVELOPMENT REPORT
2010

SUBMITTED TO

PRABHAT KHABAR

July 2010

Indicus Analytics

Indicus Analytics Pvt. Ltd. Page


nd 1
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Data Qualification

Objective analysis of the performance of a state requires quantitative information that allows for
comparison on various indicators with other states and across time. There are many caveats while
doing so, however, as the availability of data that meet stringent standards is not assured in many
cases. Estimates of the growth of the economy, for instance, is released by state governments on a
provisional basis for the latest years and is revised once final numbers come in from various
sources. Final revised estimates therefore follow provisional estimates with a gap of a few years.
There are also delays in release of data and this report utilises the latest available data, though it
may be provisional and may seem old.

There is an added constraint in this report when it comes to data from states that were broken up in
2000 – data from pre-2000 usually is available only for the combined states, while data from post-
2000 is available for the states separately. Comparison across time needs to account for this
divergence.

As far as fiscal estimates go, this report uses the revised estimates of state budgets for the previous
years, rather than budgeted estimates for indicators related to expenditure incurred by the state
government on various sectors like education, health etc. This gives a more accurate picture of the
finances of the government, than the budgeted estimates.

While all data have been taken from credible government sources, all care has been taken to
validate the data.

Indicus Team: Ankur Gupta, Sumita Kale, and Peeyush Bajpai

Indicus Analytics Pvt. Ltd. Page


nd 2
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Data Qualification ................................................................................................................................. 2
Section I.................................................................................................................................................. 4
Changing Bihar’s future .......................................................................................................................... 5
Resurrection of the State .......................................................................................................................... 8
The New Bihar of 2010s: Strengthening the Ethical Environment ....................................................... 13
Ray of Light Emerging in Bihar............................................................................................................. 17
Deprivation to Development................................................................................................................... 21
A Job Well Begun ................................................................................................................................... 26
Section II............................................................................................................................................... 30
Reviewing Growth and Development of Bihar (1985-2005) .................................................................. 30
Section III.............................................................................................................................................. 41
New Era in Bihar (Post 2005 till Date)................................................................................................... 41
Section IV ............................................................................................................................................. 77
District Profile of Bihar.......................................................................................................................... 77
Bibliography......................................................................................................................................... 93

Indicus Analytics Pvt. Ltd. Page


nd 3
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Section I

In the last five years there have been a number of instances that point to a revival of Bihar. It seems
from various indicators that Bihar is preparing itself to shed the "BIMARU" tag. It will take
consistent effort and time to catch up with the other states. This section includes seven essays
contributed by eminent thought leaders. These essays focus on the success stories, the problems
being faced, the lessons to be learnt and the way forward for Bihar.

Indicus Analytics Pvt. Ltd. Page


nd 4
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Changing Bihar’s future

Ashok V Desai

Ashok V Desai is a Senior Economist and Consulting Editor with Business World. His
columns are an authoritative commentary on economic events in India. Before his
journalistic career, Desai served as Chief Consultant in the Finance Ministry from 1991 to
1993, and helped design the early economic reforms. In the 1980s, Desai coordinated a
large survey of energy research for International Development Research Centre in Ottawa.
Earlier, he worked as an economist in National Council of Applied Economic Research in
Delhi, where he carried out policy-oriented industrial studies, especially studies on
technology development and transfer.

India has an elaborate array of statistics. But they are fitted into economic categories that tell us
little about how people live and work; and they are published with such long delays that they tell us
little that is topical. Price statistics are the only ones that are up to date; and man does not live by
prices alone. In the circumstances, we think of people and states as stereotypes, such as that
Madrasis are thrifty and Bengalis are lazy. There is usually a modicum of truth behind these
stereotypes – at least historical truth – but they are useless for any analysis, let alone any practical
thinking.

Thus, Bihar is stereotypically a poor state with rich natural resources. Its people talk a lot but
achieve little. Nothing much happens in their state, and they go to other states to find work, mainly
manual work. This generally unfavourable impression has recently acquired a discordant corollary –
that it has one of India’s most honest, dedicated and industrious chief ministers, under whom it has
achieved GDP growth that would be the envy of any state.

Indicus Analytics Pvt. Ltd. Page


nd 5
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
There was a time when I saw a good deal of Bihar, though it is long ago. During the famine of 1966, I
went and worked with Jaiprakash Narain who had organized mass feeding programmes. The
landmark of Patna that I remember most vividly is the Golghar. This 90ft-high, egg-shaped structure
was built in 1786, the year of another famine, to store grains for the British army. Coolies would go
up a spiral staircase and pour grain through a hole at the top; and it would be removed through
vents at the bottom.

Our organisation kept receiving grains from all over India by train; I used to go to the station to keep
a watch on the unloading. There was much grain arriving on government account; the labourers
who unloaded it pilfered a lot, both at the station and from warehouses. We did not allow pilfering;
so labourers used to eat the rice. They carried hooks to dig into gunny bags and lift them; they
would tear the bags with the hook and eat the rice raw as it poured out.

The villages were eerie; they had only women and children. All the men had left the villages to find
work elsewhere (this was before the green revolution). One reason was that the government and
charities fed only women and children; there was a strong belief amongst them that men should
look after themselves. I do not remember men looking after themselves by theft and robbery; Bihar
was not known for crime then, although landlords had gangs of strongmen, and they were surely
not paid for being nice. The famine was disastrous for education, for schools were turned into food
outlets, and teachers were turned into kitchen managers and cooks.

That was the last famine in Bihar. The 1987 famine was equally serious; I remember seeing
thousands of cattle leaving Gujarat for Madhya Pradesh and for slaughterhouses. But Bihar was
hardly affected. Its economy has become more robust. I suspect one reason is that, paradoxically,
many more Biharis work outside Bihar. More than a half of Delhi’s population of nearly two crore is
Bihari. Many Biharis have settled down in Punjab. A taxi driver in Bombay or Calcutta is more likely
to be a Bihari than an indigene. All these migrants send money home; apparently there are agents

Indicus Analytics Pvt. Ltd. Page


nd 6
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
in Bengaluru with cell phones who offer taxi drivers overnight money transfer to their families in
Bihar. I remember coming across a Bihari engineer on a flight. He owned some 200 acres near the
Nepal border; most of it was fallow because he could not get labour. Altogether, Bihar is more
prosperous today because it receives much larger transfers from Bihari migrants.

Some people would lament this. For them, development is not of the people but of a territory. They
would like to see many more factories and offices all over Bihar. To me, what matters is what
people consume and enjoy, not what they produce. But if I had to think like these people, the
industry I would think of for Bihar is fish or water chestnuts. Both require fresh water, of which
most of India is short, so Bihar would have little competition in producing them. In southern China,
every farmer has a fishpond next to his house. If Biharis took to fish culture, they could not only
improve their diet, but they could supply the rich urban markets of north India. Such is my out-of-
the-pond thinking for Bihar.

Indicus Analytics Pvt. Ltd. Page


nd 7
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Resurrection of the State

Shaibal Gupta

Shaibal Gupta is a prominent social scientist and founder member-secretary of Asian Development
Research Institute (ADRI) in Patna. The areas of his research interest have been guided more by the
development problems of Bihar rather than his own intellectual predilections. His research interest is to
promote development research that is more user-oriented than the academic output of typical research
institutions. His research interest now transcends beyond Bihar and encompasses the entire Hindi
Heartland and the eastern Indian states.

Nitish Kumar has completed four and half years of his reign in Bihar. Only a few months are left
before he faces the assembly elections in Bihar in November, 2010. Even if the present pace of
development initiated by Nitish continues without any electoral destabilization, it will take years
before Bihar can hope to reach any front ranking state in the country. However, Bihar which was on
the verge of being written off by the national elite and the media has already experienced a
dramatic change, not only in the level of perception, but in the realm of actual development too.
Bihar will no more be referred under the contemptuous rubric of a BIMARU state.

When the mantle of the state was electorally thrust on Nitish, he inherited a ramshackle state
structure which had no history of work, coherence and dynamism, not just during the previous
regime, but during the entire last century. In this background, among many of his political
achievements, the most substantive one is probably the task of state building in Bihar. The growth
agenda of Bihar could be pursued, even in the absence of an institutional memory of development,
provided a few other conditions were favorable. But the retarded civil society, non-existent
corporate sector, largely uninformed political opinion and an intelligentsia with a none too wide
cognitive world, all together could not understand the critical role of a strong state structure, the
main fulcrum of a growth process. Thus, the task of state building could not become the prime

Indicus Analytics Pvt. Ltd. Page


nd 8
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
agenda in Bihar in the post-independence period and, in the process, development remained a
casualty. For any regime that comes to power through a democratic process, development must be
its core agenda. The trajectory of governance is then essentially woven around it and its success is
measured in terms of creating new economic and social benchmarks. This script of governance with
the thrust on development is relatively easy for a regime, either national or provincial, provided
there is a functioning state structure. As Nitish Kumar did not inherit such a structure, he had to
build it all by himself.

It is a matter of social science research as to why the elites in Bihar, largely wedded to feudal landed
interest, or the galaxy of Chief Ministers who ruled the state in the last six decades, could not feel
the disadvantage of a non-functioning state. In contrast, Nitish did feel its absence immediately
after taking over the reigns, owing primarily to his wide national and international exposure
developed during his stint in the Union Cabinet for years. He had got elected to the Parliament six
times and held various important portfolios in the Central Government with élan and distinction in
railways, agriculture, road transport, etc. So he could not have been satisfied with a 'Bihar- centric'
sloth, ignoring the national trajectory of development. As Nitish was considered to be a dynamic
and successful Minister at the centre, he was keen to replicate his successes in the governance of
the state as well. For the first time, therefore, Bihar was being calibrated from inside vis-à-vis
national parameters. He could go about his job of state building with clinical precision. Even though
an engineer by training, his predilections were not techno-managerial, his understanding of an
inclusive growth was shaped by his ideological grounding in the socialist movement and the wider
world view.

In the last sixty years, the building of the state structure was nearly complete in most regions of the
country and at the centre. The first task in this process was value addition to the inherited colonial
administration, apart from reinventing the chain of command for the development administration,
parallel to the general administration. Over and above, it also entailed administrative reforms and

Indicus Analytics Pvt. Ltd. Page


nd 9
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
creation of new institutions to serve the development agenda. Such strengthening of the state and
the consequent economic development would have led to a growing market structure. This
important gap is being filled now in Bihar.

A well-oiled state structure was not absolutely needed for enforcing the ‘rule of the law’, without
which neither social justice nor economic development could be possible. An under governed
province like Bihar needed both ‘law’ and ‘order’, essentially a demonstration of the authority of
the state. This new grammar of governance in Bihar is now being provided and one of its important
dimensions is the ‘conviction rate’, mediated through the speedy trial in the courts. It is reported
that 47,000 criminals have been convicted in the recent years, a number of whom have been given
the death sentence, life imprisonment and sentenced for 10 years or more.

The impact of better governance was visible in the state. An analysis of the Bihar economy indicates
that in the last four years, it has shown considerable growth rates in three sectors viz. construction,
communications and trade, hotels and restaurants. The dramatic GSDP growth in Bihar, which
generated a national and international interest, was not a flash in the pan. The growth rate of the
GSDP in Bihar during 2004/5 to 2008/9 recorded 11.35 percent which was much higher than what it
was during the preceding five years. This was not totally unexplainable phenomenon, because the
total plan expenditure of Bihar at Rs.4899 in 2005/6 has more than trebled in the first three years of
the present government. In 2008/9, it stood at Rs. 15746 crore. For the current year, the plan size of
Rs. 20,000 crore for Bihar has been approved by the Planning Commission. Essentially, the growth in
Bihar presently is construction centric.

On the industrial front, small and medium scale enterprises are predominant in Bihar. But, after
declaration of the new liberalized industrial policy by the state government in 2006, a number of
proposals for setting up medium and large industries has been received which are likely to
materialize in near future. However, a number of industrial ventures related to power and sugar for

Indicus Analytics Pvt. Ltd. Page


nd 10
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
establishment in the state will need support from the Government of India. For example,
establishment of power projects in the state will need clearance of coal linkages from the central
government. Efforts are also being made to tap into the food processing and agro-based industries
that carry a great potential in the state and can become a major source of income and employment
generation. The functioning of the banking sector again has shown improvement, resulting in higher
commercial activities and increased credit-deposit ratio. There are major achievements in social
sectors as well, especially education and health. For example, the enrolment in primary schools
(especially for the scheduled caste children) during the last four years has increased considerably.
The crowning achievement in the realm of asset building exercise in the state is revealed by the
sterling performance of Bihar State Bridge Construction Corporation Ltd and Bihar State Police
Construction Corporations. The plethora of bridges and police stations built in the state in the last
four years is really unprecedented. Incidentally, both these corporations were on the verge of
liquidation during the previous regime. A visible impact of such heightened economic activity has
been a significant drop in the out migration of workers from Bihar.

In the arena of public finance, the fiscal performance has improved through rationalization of
expenditure, effective debt management and improvement in the quality of expenditure. While the
growth of revenue expenditure has been kept to the minimum, the capital expenditure is growing
fast, the latter now accounting for about one-fifth of the total expenditure. Incidentally, the present
government is working out the nuts and bolts to ensure that the per capita developmental
expenditure of the state matches the national average by 2015. It will not be out of place to state
that after years of isolation, the economy of Bihar is likely to get integrated with the national and
possibly international economic grid in future.

The state of Bihar is poised for a turnaround and will be the most happening state in this part of the
country. Bihar could become role model for most of the land-locked states of the Hindi Heartland.
The problem of governance is universal in the Hindi Heartland states. Bihar has displayed to the
world that with marginal improvement in the quality of governance, even a moribund state could

Indicus Analytics Pvt. Ltd. Page


nd 11
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
get resurrected. Without a resurrected state, the economy of the state will not leap frog.
Unfortunately, the tripod of state, market and civil society, a necessary precondition for economic
growth, is relatively weak in the state. While the functioning of the state has improved substantially,
the other components of the tripod need to be strengthened. We hope in the next couple of years,
we shall banish our developmental deficit authentically.

Indicus Analytics Pvt. Ltd. Page


nd 12
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The New Bihar of 2010s: Strengthening the Ethical Environment

Laveesh Bhandari

Laveesh Bhandari is the Founder Director of Indicus Analytics. He has led policy-oriented studies
for nationally and internationally reputed organisations such as the Finance Commission, World
Bank, United Nations Children’s Fund, Asian Development Bank and Food and Agriculture
Organization. He has published extensively and is a columnist for newspapers and newsmagazines.
His work on inequality, education and regional growth is frequently referred to in policy debates in
India. He has received a number of awards, including the EXIM Bank Award for his work on
international joint ventures and the Hite Fellowship for his work on international finance.

As a new decade starts, Bihar is leaving behind a history of slackness and entering into a new phase
marked by energy and dynamism. The government can no longer be characterized as lazy and
vision-less, the state can no longer be identified as uninterested in its own people. It seems that
Bihar has decided to go on a path that will take it into a completely new world. It is not used to this
path, has little experience in, and will need to devise new ways of doing new things. True
international and national consultants may fly in regularly, NRBs (Non-Resident Biharis) long gone
away, may come in to help out. But in the end the new Bihar will be built by those who have lived
through bad times and good in Bihar itself.

What is the single biggest challenge facing Bihar today and in times to come? Many say it is lack of
adequately educated trained human capital; but that is only a temporary problem – human capital
moves wherever the opportunities are, and as Bihar grows human capital will come in. Others say it
is lack of finances, but that also goes where the opportunities are and will also come into Bihar as
time goes by. Still others say it is lack of infrastructure, but that is a medium term problem at best.
Some also say it is a problem of ineffective state government machinery; but there are solutions to
this problem as well that take some time to yield fruit. Note that I am not saying that these are not

Indicus Analytics Pvt. Ltd. Page


nd 13
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
difficult challenges, they are. But there is another challenge that Bihar, like any other rapidly
growing economy, will need to address.

In my mind the most important issue for any society including Bihar is that of maintaining and
strengthening ethical practices. These include ethics in government and in business, in relationships
between individuals and between organizations, ethics in citizen-state interaction and in
commercial relationships.

Ethics are important not merely because the religious texts and those who have lived life to its
fullest tell us so. Ethical practices are a very practical solution to the various pulls and pressures that
affect individuals and organizations. Without them we can very easily go down a long downward
spiral that any amount of government action or investment cannot get us out.

Economic research has shown in many different ways that ethical actions are the very foundation of
market forces. Without those, markets don’t function, private or public enterprise fails, costs
increase and any progress – whether social or economic is unsustainable.

The classic example is that of Russia where despite a great base of human capital, rich natural
resources, and good infrastructure, economic growth did not follow after the unravelling of socialist
institutions. Somehow the markets just could not deliver. The latent energy of a great country got
diverted towards quick short cuts, greed and selfish gains. A few people in the government and in
the private sector gained untold riches but a whole country is still suffering.

Why does this happen? As opportunities arise there are two ways of dealing with them. The first is
individuals quickly react by trying to get as much of the new pie as they can get for themselves. The
second way is groups of individuals work together to ensure that such opportunities continue to
arise and they are willing to share in the effort and benefits of such opportunities. The latter will

Indicus Analytics Pvt. Ltd. Page


nd 14
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
necessarily have to work in a cooperative ethical manner; the former in most cases will end up in
some kind of an unethical action or the other.

Why are markets so dependent upon ethics? In the absence of ethical practices there are many
different kinds of market failures. If markets fail, either transactions do not occur, or for
transactions to occur companies and governments need to create counteracting mechanisms to
reduce the impact of unethical practices. Creation of complex contracts, greater regulation,
monitoring, greater dependence on third party arbitrators and the judiciary are only some
examples. These are very costly and lead to high level of economic inefficiency. Moreover in areas
or sectors where the level of unethical practices are high, the time and effort costs incurred in
finding the right partner also are very high, and sometimes these areas or sectors are avoided
altogether. Hence markets work best where the level of ethics are best. And growth is highest in
such areas - be it at the level of an individual, organization or the economy.

But despite such well known positive impacts of ethical practices and despite the teachings of all
religions and gurus, unethical practices abound. Why? Here as well economic theory provides many
insights.
• First, those who expect to be in a repeated and long term relationships are less likely to resort
to fraud and cheating. The reason is simple, if one practices unethical behavior once, the long
term relationship will end.
• Second, those who want quick returns are more likely to practice unethical behavior than those
who are in it for the long term. This is because unethical behavior is found out and eventually
adversely impacts long term relationships, though it gives instantaneous benefits.
• Third, unethical behavior happens much more in areas where there is a large turnover of
people. For instance in politics a lot of new people keep on entering and exiting, hence long
term relationships are difficult to maintain.

Indicus Analytics Pvt. Ltd. Page


nd 15
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
But there is also another facet of ethics. Societies that do not punish unethical behavior fail to
prosper. In other words, just waiting for god or the government to punish unethical actions is not
enough. Individuals and organizations need to be constantly aware of unethical practices and the
response needs to be swift and even. Punishment of the unethical is a critical element of
strengthening ethical practices.

In conclusion, as funds will flow into Bihar, as investments are made in land, labour and capital, the
people of Bihar will face a new wind of opportunity. After having been debarred of such
opportunities for so many decades, some may want to benefit from gains at the cost of others,
some may stop thinking of the long term, and many may want to make a quick buck. Such people
need not be only in the government; even in the private sector, in trade, industry, services or
agriculture, the lure of quick riches can be a powerful motivator that could lead Bihar in a
downward spiral. Merely depending upon the government to address this problem will not be
adequate. Every individual will need to guard against it and not accept it – whether the action is by
a colleague, friend or family.

Indicus Analytics Pvt. Ltd. Page


nd 16
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Ray of Light Emerging in Bihar

Sumita Kale

Sumita Kale is Chief Economist with Indicus Analytics. She received her Ph D from the
University of Pune and M Phil in the Economics of Developing Countries from the University of
Cambridge. She has a number of publications to her credit and has been visiting faculty at the
Department of Economics, University of Pune and at the National Insurance Academy, Pune.

A state that is usually in the news for the wrong reasons, Bihar has stunned the country by turning
in a superlative growth performance, averaging 11.4 percent annual growth over the five year
period starting 20004-05. There are many sceptics to this growth story - reservations over whether
the data has been fudged and doubts over the sustainability of such high growth. The first thing to
note is that this data is as reliable as other estimates that come through the Central Statistical
Organisation. There is of course the caveat that these are provisional estimates, till the state
governments release final estimates through the CENTRAL STATISTICAL ORGANIZATION (CSO), and
such revisions can continue well into the next few years - for now, these estimates cannot be
doubted.

The sectors powering growth in the state are construction at 35.8 percent growth per annum in the
five year period, compared to 8.4 percent growth in the previous five years and services at 11.5
percent compared to 5.4 percent previously. This data actually corroborates anecdotal evidence
coming in from Bihar of improvements in governance and boost by government spending on
infrastructure, particularly road construction. The Nitish factor is seen to have worked post 2005 -
while all states in India have grown faster in the last five years, it is Bihar that has made the largest
jump.

Indicus Analytics Pvt. Ltd. Page


nd 17
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
According to the latest Economic Survey 2009-10, growth has raised connectivity in the state
dramatically. Tele density has risen from 5.34 percent in 2006 to 22.18 percent in 2009. Internet
connections in rural Bihar are up to 4.99 lakh in 2009-10 compared to 0.43 lakh in 2008-09. Two
districts - Muzaffarpur and Khagaria - have the highest number of broadband and dial up
connections. Road connectivity is a crucial achievement in Bihar. About 2,417 km roads were
constructed in the state in 2008-09 compared to 415 km in 2005-06. The survey also pointed that
the improvements in Bihar have been validated by a rise in tourist arrivals – the state attracted 3.46
lakh tourists in 2008 compared to 61,000 in 2003.

Bihar has definitely changed for the better. Yet, the question remains whether such double-digit
growth is sustainable over the long term? This is a difficult question to answer as it depends on so
many factors. To begin with, this growth comes on a very low base. Even after leading the growth
charts amongst states in India, Bihar’s per capita income at Rs. 12,643 in 2008-09, a third of the
national figure of Rs. 37,490, is still the lowest in the country. The state government understands
well that the achievements so far just mark the beginning and much more needs to be done to
consolidate the fruits of this growth. As Deputy Chief Minister Mr. Modi said, ‘If Bihar continues
with 11 percent growth rate for the next 15 years, then we will achieve Maharashtra’s current SDP.
And by that time, Maharashtra’s SDP will be threefold of what it is today. So, we have a long way to
go.’

Sustainable growth is a dream unless the economy is well-diversified and the volatility in year on
year growth is a worrisome feature of Bihar’s economy that needs to be tackled. A look at the graph
on annual growth will show how growth fluctuates from year to year. The reason behind this
volatility is that Bihar’s economy has not diversified enough over the last few years. The share of
agricultural sector in the economy has been declining over the last decade but still accounts for
almost a quarter of Bihar’s income. A lot needs to be done in irrigation, flood control and drainage
schemes to keep agricultural output from suffering tremendous fluctuations.

Indicus Analytics Pvt. Ltd. Page


nd 18
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
More importantly, manufacturing accounts for just 4-5 percent of the state income, with the major
share coming in from the un-registered sector. That is, organised manufacturing still accounts for
just under a quarter of manufacturing activity in the state. What the present government has
managed in Bihar so far has been to improve the law and order position and raise the feasibility of
investment in the state. The government has attracted significantly larger investment proposals
recently, but these need to be converted into actual production facilities on the ground.

In a recent note on economic prospects at the regional level, global research agency Moody's
Economy.com noted Bihar's stunning economic performance as an example of how government
policies help accelerate growth. The note went ahead to say, "If Bihar shows how good regulation
can accelerate growth, neighbouring West Bengal highlights how bureaucratic roadblocks and firmly
entrenched special interests can inhibit it."

The tragedy of West Bengal today is that it is being pulled out as an example of bad governance and
constrained growth. Is this a fair picture? It is true that West Bengal has posted the second lowest
growth in the decade amongst large states. On the other hand, growth has been steadily rising; per
capita income at Rs. 31,722 in 2007-08 was way higher than Bihar’s Rs. 11,135 that year. More
importantly, on all social indicators, West Bengal outperforms Bihar. The problem is that while Bihar
is a state that had been practically given up as a non-achiever, and has therefore surprised
observers, West Bengal has been performing far below expectations, per capita income currently
trails the national average. As one of the leading industrial states in the 60s, West Bengal ranked
with Maharashtra amongst the rich states in the country. While the state has lost much ground in
the decades since then, the manner in which Singur and Nandigram were dealt with recently has
created an atmosphere of uncertainty that is not conducive for investment and growth
opportunities. The experience of Bihar and West Bengal show that things cannot be taken for

Indicus Analytics Pvt. Ltd. Page


nd 19
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
granted – states that were once leaders can fall back, while states that were laggards can turn the
corner and shine.

In the last five years, the state of Bihar has shown that change is possible. Bihar’s achievement has
given the people of the state hope and confidence that good governance can move the economy on
a high growth trajectory.

Indicus Analytics Pvt. Ltd. Page


nd 20
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Deprivation to Development

Bibek Debroy

Bibek Debroy is Professor at the Centre for Policy Research, New Delhi and Contributing Editor
with the Indian Express. He has worked in academic institutes, for the government and an industry
chamber. He is the author of several books, papers and popular articles. His special interests are
education, health, law, governance and trade.

Anga, Videha, Magadha, Vaishali, Nalanda, Vikramshila, Pataliputra – these are names that resonate
in history. On 27th May 2006, Prime Minister Dr Manmohan Singh delivered a speech at the
International Conference on Agriculture for Food, Nutritional Security and National Growth.1 In that
speech he stated, “We do need a lot more attention to be paid to the management of our
agricultural research and technology system. We must also ponder why is that Bihar which was
chosen to be the original location of the Indian Institute of Agricultural Research, why it has failed to
catch up with the rest of the country? Bihar, in 1950 was described as the second-best governed
state in the very famous Paul Appleby Report. From that point, from that benchmark where Bihar is
today in terms of its absorptive capacity? This is worthy of exploration, why a state like Bihar has
not been able to catch up with the rest of the world?"

Let us dispose of Paul Appleby first. Paul Henson Appleby (1891-1963) visited India in 1952, 1954,
1956 and 1960-61. As a consultant to the Ford Foundation, he produced his first report in 1953,
titled, “Public Administration in India: Report of a Survey”. And there was a second report in 1956,
titled, “Re-examination of India's Administrative System with Special Reference to Administration of
Government's Industrial and Commercial Enterprises.” There was no Paul Appleby Report in 1950.
The year should have been either 1953 or 1956. Where in his two reports did Appleby rank Bihar as

1 http://pmindia.nic.in/speech/content.asp?id=341

Indicus Analytics Pvt. Ltd. Page


nd 21
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
the second-best governed state? There is no such mention. Strictly speaking, the subject of the
second report had nothing to do with ranking states. If Appleby had undertaken such a ranking, it
should have been in the first report. And certainly in the 1950s, this business of cross-country or
inter-state rankings wasn't that fashionable. Governance wasn't the buzzword it is now. Nor was
there any literature on what variables to include in governance and how to weight and aggregate
them into an index. Appleby also published three papers in the “Indian Journal of Public
Administration” at around the same time and there is no such ranking of Bihar in these three papers
either. Consequently, the stuff about Appleby ranking Bihar so high in the early 1950s is just an
urban legend and the Prime Minister's speech-writers should have known better. But it is a good
story and captures Bihar's relative slippage not only from a historical period, when it was the cradle
of civilizations, empires, religions, educational centres, administration and prosperity, but also from
the 1950s. Had a governance ranking been undertaken in the 1950s, Bihar, and even Uttar Pradesh,
would have figured at the top of the league.

By any criterion, Bihar is towards the bottom. Published in 2001, the Planning Commission's
“National Human Development Report” is dated now.2 Nevertheless, it illustrates the point. The
human development index (HDI) was computed for 15 major States in 2001 and Bihar was ranked
the 15th.3 Every year, a cross-State ranking is undertaken by Bibek Debroy and Laveesh Bhandari for
“India Today”, spanning a large number of variables spread over several heads. Irrespective of the
head (or the variable), Bihar figures towards the bottom. In 2004-05, 42.1 percent of rural Bihar was
below the poverty line, a figure surpassed only by Jharkhand and Orissa.4 Bihar has become an
image for everything that is wrong with the state of India's economic development and governance.
Academic work and popular impression have often used the BIMARU (Bihar, Madhya Pradesh,

2 http://www.planningcommission.nic.in/reports/genrep/nhdrep/nhdreportf.htm
3 HDI is based on three indicators of education (literacy, gross enrollment ratio), health (life expectancy) and per
capita income (or expenditure) and has been popularized by UNDP in its “Human Development Reports”. There are
some minor differences between the UNDP methodology and that followed by the Planning Commission.
4 http://www.planningcommission.nic.in/news/prmar07.pdf. This is based on the uniform recall period and the
debate about the poverty line is irrelevant for present purposes. 34.6 percent of urban Bihar was below the poverty line,
surpassed by Chhattisgarh, Madhya Pradesh and Orissa.

Indicus Analytics Pvt. Ltd. Page


nd 22
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Rajasthan, Uttar Pradesh) nomenclature, with a pun on the word bimar, meaning ill or sick,
referring to the undivided States. However, undivided Madhya Pradesh and Rajasthan are no longer
as deprived and backward as Bihar and the eastern parts of Uttar Pradesh. This is important
because the demographic dividend, in terms of new entrants into the labour force, will primarily
accrue in the undivided States of Bihar, Uttar Pradesh and Madhya Pradesh and in Rajasthan and
Orissa. India cannot hope to prosper if these regions remain bypassed and marginalized. Left-wing
extremist violence or Naxalism, which feeds on development deprivation, has a significant presence
in Bihar. Migration is an indicator of a region's prosperity and attractiveness. A couple of thousand
years ago, Bihar was the centre of in-migration. Today, Bihar is the focus of out-migration.

Why is Bihar backward and deprived and why has its relative position slipped? Legitimate points can
be made about Centre-State fiscal transfers5 and the freight equalization policy, though the latter is
now only of historical interest. However, the key is what can broadly be called governance, spilling
over into provision of physical and social infrastructure, making public expenditure efficient and
ensuring law and order. This enabling environment is critical for agriculture, industry and services.6
Given Bihar's agro-climatic zones and land, despite the flood problem, there is no reason why
Bihar's agriculture should not do better. Given Bihar's natural resources7, potential transport
infrastructure and strategic location, there is no reason why Bihar's industry should not do better.
Given Bihar's educational infrastructure, there is no reason why Bihar's services should not do
better. The reform agenda need not be restated here. Such an agenda was formulated by the World
Bank in 2005, building on the pillars of improving the investment climate and social service delivery,
with fiscal and administrative reforms as integral components of the latter.8 In the complex world of
electoral politics, with caste a major factor in Bihar, it is not always obvious that citizens vote out

5 See, Mohan Guruswamy, Ramnis Attar Baitha and Jeevan Prakash Mohanty, “Centrally Planned Inequality, the
Tale of Two States – Punjab and Bihar” and Mohan Guruswamy and Jeevan Prakash Mohanty, “De-urbanisation of
Bihar,” both published by Centre for Policy Alternatives, New Delhi, in 2004.
6 The share of industry in gross State domestic product is remarkably low in Bihar.
7 Though some have gone to Jharkhand.
8 Bihar, Towards a Development Strategy, World Bank,
http://siteresources.worldbank.org/INTINDIA/Resources/Bihar_report_final_June2005.pdf.

Indicus Analytics Pvt. Ltd. Page


nd 23
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
mis-governance and vote in good governance. However, it is possible to argue that the change in
government in 2005 was driven by a desire to see an improvement in governance. This does not
necessarily mean that good governance will bring electoral dividends in 2010.

There is anecdotal evidence that Bihar has improved, on parameters like administrative delivery and
law and order. This has received some support from the 2008-09 GSDP (gross State domestic
product) figures. There has been a slight misreporting in some sections of media about 2008-09 real
State domestic product (GSDP) growth rates. These reports suggest that at 11.4 percent, Bihar has
shown the highest real growth after Gujarat. That’s not quite true, because 2008-09 data are still
not available for many States, including Gujarat. Indeed, if one considers States for which 2008-09
data are available, Bihar has grown the fastest. At 10.8 percent and 10.4 percent respectively,
Puducherry and Chandigarh come after Bihar. Out of 32 States and UTs, 2008-09 data are yet
available only for 18, with many major States missing. Lest we forget, all-India GDP grew at 6.7
percent in 2008-09, considerably lower than 11.4 percent. A better comparison is for 2007-08, when
data are available for all but Nagaland and Tripura. The all-India GDP growth in 2007-08 was 9.01
percent. Bihar registered 8.04 percent, far less spectacular than 11.4 percent. Several States and
UTs were ahead of 8.04% - Andhra (10.62%), Goa (11.14%), Gujarat (12.79%), Haryana (9.35%),
Himachal (8.59%), Chhattisgarh (8.63%), Maharashtra (9.18%), Uttarakhand (9.37%), Chandigarh
(11.51%), Delhi (12.48%) and Puducherry (24.85%). Therefore, one shouldn’t make too much of a
year’s figures, which can be subject to annual fluctuations. More important is the trend over say, a
five-year period. The trouble with picking only one year is better illustrated by 2006-07, when Bihar
grew by 22.0 percent. Thus, what is of note is not Bihar’s record in any specific year like 2006-07,
2007-08 or 2008-09. Nitish Kumar became CM in 2005 and political mileage is being made of the
fact that in preceding year, 2003-04, Bihar declined by 5.15 percent under Rabri Devi. Ignoring such
annual aberrations, between 1999 and 2004, Indicus figures show that real SDP in Bihar grew by 3.9
percent. Between 2004 and 2009, real SDP in Bihar grew by 11.3 percent. The annual decadal (1991
to 2001) rate of population growth in Bihar was 2.8 percent, though it may be lower now. 3.9

Indicus Analytics Pvt. Ltd. Page


nd 24
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
percent growth means roughly 1.1 percent per capita income growth, while 11.3 percent growth
means roughly 8.5 percent per capita income growth. That’s a huge difference. Regionally, one of
the issues has been that States with higher rates of growth have also tended to have lower rates of
population growth and States with lower rates of growth have tended to have higher rates of
population growth. Therefore, in terms of inter-State disparities, per capita figures show greater
divergences than non-per capita numbers. If a traditionally backward State like Bihar has broken
away from past trend that is a reason for celebration.

Because we are talking about trends and not year-to-year fluctuations, there is no denying that
Bihar has broken away from earlier growth trajectories. For instance, in earlier bad years (2001-02,
2003-04), real SDP declined by around 5 percent. In a recent bad year (2005-06), SDP increased by
1.5 percent. Can one ascribe a State’s success to a Chief Minister and a new government? In this
case, because break with the historical trajectory is so sharp, the answer is in the affirmative.
Anecdotally, one knows governance, administration and service delivery have improved in Bihar,
partly facilitated by a World Bank lending programme between 2007 and 2009. However,
agriculture doesn’t seem to be the primary driving force. Between 1999 and 2004, real agricultural
SDP growth was 2 percent, while between 2004 and 2009, it was 5.6 percent. That’s undeniably an
improvement, as is the increase in manufacturing SDP growth from -1.9 percent in the first period
to 8.0 percent in the second. But what is spectacular is the jacking up of construction from 8.4
percent to 35.8 percent, communication from 9.4 percent to 17.7 percent and trade, hotels and
restaurants from 11.6 percent to 17.7 percent. Somewhat unexpectedly, services have been driving
growth, which has what has happened in the rest of India earlier. Bihar is catching up, as with
Rajasthan and undivided Madhya Pradesh earlier. However, one should also remember that there
are considerable divergences within Bihar and Patna, and the area around it, is not all of Bihar.

Indicus Analytics Pvt. Ltd. Page


nd 25
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
A Job Well Begun

Pratap Bhanu Mehta

Pratap Bhanu Mehta is the President of Centre for Policy Research, a New Delhi-based think
tank. He has also been appointed to New York University Law School’s Global Faculty. He has
previously held Professorships at Harvard and JNU. He was Convenor of the National
Knowledge Commission. His most recent publications include The Oxford Companion to Politics in
India (co edited with Niraja Jayal) and The Burden of Democracy. He writes a column for the Indian
Express. He is also a winner of the 2010 Malcolm Adshieshiah Award.

There is little doubt about the palpable excitement that Bihar’s growth over the last five years or so
has generated. But the excitement is, in equal measure, due to the fact that the last five years or so
have set new benchmarks in a number of areas. Bihar gives lie to the proposition that there is
something inevitable about decline in governance in poor states. Law and deterioration cannot take
place without state complicity. The great achievement of the last few years has been removing the
sense of state complicity in structures of violence. While Bihar’s law and order woes are by no
means over entirely, the sense that the state is marked irrevocably by violent polarisation is
diminishing. Bihar has made attempts to contain violence at both ends of the ideological spectrum,
naxalism and upper caste reactionary groups like the Ranvir Sena. Just the number of prosecutions
is impressive by any measure.

The turnaround in law and order, the sense that prosecutions are taking place and increased sense
of safety, suggests that any state can improve if it is genuinely committed. Second, there is a
palpable sense that the state can actually do things: the construction of roads and schools, the
appointments of teachers, functioning health clinics give a sense of a state making its presence felt.
Third, there is an innovative attempt to create a new paradigm in politics. This new paradigm has
three premises. The first is that the old paradigm of caste politics has exhausted itself; the new

Indicus Analytics Pvt. Ltd. Page


nd 26
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
paradigm of caste politics seeks to forge new alliances with the most deprived and those
marginalised by traditional politics. The second is that politics requires deeper participatory
structures, including the strengthening of Panchayati Raj. While a lot remains to be done on the
ground, Bihar’s thinking has been innovative. The idea of transferring more functions to panchayat
institutions, an understanding that their capacity needs to be built, and making the state visibly
present through panchayat Bhawans, are all steps in the right direction. No one should be under
any illusion that decentralisation and strengthening local government is at least a fifteen year
project; and that things may occasionally get worse before they get better. The challenge is to stay
the course. Bihar has also, with admittedly mixed results, at least been a place of governance
experimentation. It has tried to make the discourse of development replace a politics of intra group
resentment and recrimination. Democracy is always a work in progress. But it is after decades that
such an ambitious new paradigm of politics was tried out anywhere and in any state.

But the foundations of the new found optimism on Bihar remain fragile. Bihar has had periods of
high growth in the past. Although there are more reasons to be optimistic this time there are
serious issues that remain to be tackled. For one thing the growth largely seems to be a result of
what you might call the governance effect, a rapid expansion in actual government expenditure.
The most striking piece of data in the Bihar story is the phenomenal growth in the construction
industry, at rates of more than fifty percent a year in the initial phase of this regime. By some
estimates the share of construction in state GDP has more than doubled. Construction has great
beneficial effects. It is labour intensive, and rural connectivity via roads is a necessary condition for
long term growth. Even agriculture has shown improvement, the volatility in agriculture
performance due to unaddressed ecological issues remains a cause for serious concern.

But the simple truth is that the long term sustainable future of a state requires the opening of
alternative vistas of development: industrialisation and services. It is still not very clear that these
alternative horizons have opened up in Bihar. Private sector investment is still not picking up at a

Indicus Analytics Pvt. Ltd. Page


nd 27
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
pace that gives reason to be confident. There are fundamental reasons for this which have not even
begun to be addressed. First, Bihar’s power situation remains very precarious, through no fault of
its own. The uncertainty of power makes it particularly difficult for small business, which is going to
be the backbone of any growth. The second issue is more subtle. No state can experience long term
sustainable growth without a credible strategy for urbanisation. Almost all the consistently high
growth states have urban centres that are magnets for investment, and draw and retain human
capital. West Bengal tried to have an entirely rural based strategy, even going to the extent of
actively decimating its urban infrastructure. In recent years it has tried to reverse the trend, but
with little success. Bihar is urbanising, but the form of its urbanization, is not of the kind that will
draw large scale investment. But a crucial political economy question is this. Regimes that have
their base in rural consolidation, typically find it difficult to make the transition to an aggressive
industrial or services sector policy. In a way, Bihar’s slow progress on this is understandable. During
Nitish Kumar’s first term it had just emerged from almost a decade of active mis-governance. It
needed to consolidate state institutions. It also needed a regime that had a powerful social base.
But usually, as we have seen in West Bengal, the process of creating a credible urbanisation and
industrial strategy generates great conflict. This is especially true in conditions where land is very
scarce and highly contested. The real test of the durability of governance in a state is its ability to
negotiate the land question.

In a way, Nitish Kumar, again had the right idea. Some degree of land reform and regularisation of
rights is desperately needed, and in principle would also have allowed the regime to further
consolidate its social base. But this strategy is also fraught with risks. It risks a political backlash
from some sections of upper castes. But more importantly, it has not yet been demonstrated that
the state has the administrative capacity and party support to carry out this program. In West
Bengal, the communist party was able to impose its writ at the local level; it is not clear that Nitish
Kumar has that kind of party structure that can do serious social engineering on the land question.

Indicus Analytics Pvt. Ltd. Page


nd 28
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
It also is an open question therefore, whether any government, in the highly contested terrain of
Bihar politics, can risk conflict by pursuing an urbanisation strategy.

Despite some recent expansion, the condition of Higher Education, a vital engine for growth,
remains dismal. But the difficulties of creating high class higher education projects in Bihar, are
indications that Bihar will find it difficult to attract and retain an edge in knowledge industries and
services that are important drivers of growth. The Nalanda project initially had great promise as a
show case project that would set new standards in Indian Higher Education; it is more likely to
settle into another humdrum politics.

Bihar, at the moment, has renewed energy and commitment in governance. That is paying great
dividends. It also shows considerable promise in creating a new discourse on participation and
social justice. But, despite a job well begun, these are still precarious gains. There is also little doubt
that there is a drive, energy in the people of Bihar. But it is still a long way from being harnessed to
an alternative and sustainable development imagination.

Indicus Analytics Pvt. Ltd. Page


nd 29
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Section II
Reviewing Growth and Development of Bihar (1985-2005)

Bihar, India’s eighth largest state, is a state with a largely negative image. According to popular
perception, Bihar is known as a state with high levels of poverty, lawlessness and corruption. It is
only in the last five years that the state has been going through a slow transformation with double-
digit growth, improved law and order situation and better governance. Looking at the two decades
of performance before the recent growth spurt – 1985-2005 – shows that the years of neglect have
given the state a very low base from which it has now begun moving up. While other states pushed
ahead on the growth and development agenda throughout the last two decades, Bihar, continues
to have significant growth and development challenges to overcome.

The state was bifurcated in 2000 as southern districts were carved out to create Jharkhand. There is
therefore a caveat when using data across the twenty year period to compare the performance of
the state over time. The state includes Jharkhand districts for economic data before the nineties,
while for social indicators, in the early years after bifurcation, government data do not provide for
separate data for the two states. While this makes strict comparison across time difficult, the broad
trends that are reflected by the data, even in aggregate, are indicative of the ground reality in the
state of Bihar. As far as the impact of the division is concerned, at one level, it was expected Bihar’s
problems would be compounded as the southern districts hosted a large part of the industrial
establishments as well as rich mineral resources. However, with change of governance in 2005,
these fears have been proved wrong.

Over the period 1985-2005, the state hardly witnessed much economic growth. In 1985, Bihar’s per
capita income was Rs. 1601 at current prices, compared to the national average of Rs. 2730. By
2005, per capita income had moved up to Rs. 7844 while the national average had surged to Rs.
30,526 – the gap had widened significantly.

Indicus Analytics Pvt. Ltd. Page


nd 30
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Figure 2.1

For the first ten years of the period under discussion – 1985 to 1995, the state’s economy grew at a
mere 3.2 percent per year, while India grew at 5.5 percent. Over the second ten years – 1995-2005,
growth in Bihar picked up to average 4.75 percent while the Indian economy went ahead to turn in
a 6.3 percent growth per year. Clearly, not only did Bihar miss out on the opportunities that
liberalisation and reforms had brought to the country, it also dragged India’s performance down as
it tottered along over the years. As the gap widened between India and Bihar, the urgency to revive
the state became even more overwhelming. In fact, as then-President Kalam put it, “If India is to
progress, Bihar has to succeed” - India cannot afford to leave 8 percent of its population behind if it
aims to achieve double digit economic growth. The high levels of migration from the state as people
left to escape poverty and secure any sort of employment outside the state had deep socio-
economic repercussions as this migration brought down wages in other parts of the country and
induced social tensions.

One of the main problems of Bihar’s growth path has been its high volatility (see accompanying
graph) with several years of negative growth.

Indicus Analytics Pvt. Ltd. Page


nd 31
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Figure 2.2

Indicus Analytics Pvt. Ltd. Page


nd 32
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
More than 60 percent of the population lay below the poverty line in 1983. By 2005, this proportion
had improved to 41 percent, however this still makes Bihar one of the poorest states in the country.
The slow progress in tackling poverty leaves a higher burden going forward. The concern is that
Bihar is largely a rural state – 90 percent of the people live in rural areas, indicating that rural
poverty is a problem which needs to be tackled on a war footing. In fact, Bihar is the only state in
India that has shown a trend away from urbanisation over these two decades – 1981 urban
population constituted 13 percent of the total population, in 2001, this share was down to 10
percent. Most of the rural poor lack access to land and majority are landless labourers, depending
on casual work or agricultural wages for subsistence. With 75 percent of the population engaged in
the primary sector, raising the levels of agricultural growth would have major implications for
poverty reduction. Hence, realising the transition away from the primary sector is a goal that
remains to be achieved.

However, Bihar was not in a position to build a vibrant industrial sector. Bihar’s share of private
projects implemented was the lowest in the 1990s, a time when private sector in India leaped
forward to take advantage of the new economic era.. From 1991 to 2006, just 7 Industrial
Entrepreneurial Memorandums were implemented in the state, out of a total of 6248 in the
country, generating employment for just 768 people. The state accounted for just 0.5 percent of all
industrial investment proposals in the country, a pitiful record for the eighth largest state. The ratio
of implemented projects to those proposed was 6.7 percent, lower than the national average
implementation ratio of 9.2 percent, showing the significant problems faced in getting even the few
proposed projects off the ground. While the private sector tended to stay away given the poor law
and order situation, public investment was on a decline as low growth and income leave little scope
for revenue realisation for the administration. High levels of corruption and inefficiency meant that
even though the state received large transfers from the Central Government, funds were left
unutilised. Weak infrastructure of roads, telecommunications, power etc., weak financial markets,

Indicus Analytics Pvt. Ltd. Page


nd 33
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
lack of skilled manpower and very little political commitment to make the requisite changes
resulted in a vicious circle that made it difficult for industrial investment to penetrate.

Likewise, the services sector also was not well-developed. While the sector did generate 17 percent
of employment, in 2005, the largest share of income was generated by public administration,
showing the lack of private sector involvement. 20 percent of the services sector was from public
administration, in neighbouring West Bengal, this share was just 9 percent. More significantly, the
sectors of banking and insurance which contributed 22 percent to West Bengal’s services sector,
formed just 10 percent of Bihar’s income from the service sector, a pointer to low access to
financial markets and credit in the state. Overall, the state economy was not well-diversified,
leaving little opportunities for the people for gainful employment.

Table 2.1 Share of employment in 2004

Primary
State Sector Secondary Sector Tertiary Sector

Bihar 75 8 17
Uttar Pradesh 75 10 15
Madhya Pradesh 71 14 15
Orissa 65 18 17
West Bengal 48 23 29
Source: Central Statistical Organisation

It is not just that there were no opportunities for employment, the low spread of education also
meant that the population of the state was not employable and had little skills. Not only did Bihar
have the lowest literacy rate in the country, it also made the least progress towards enhancing
literacy over the period 1981-2001. In 1991, it had the same literacy rate as Rajasthan, in 2001
Rajasthan had covered 61 percent of its population, through intensive government outreach
programmes.

Indicus Analytics Pvt. Ltd. Page


nd 34
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 2.2 Literacy Rates (Percentage of Population)

Increase in percentage of
literate population

States 1981 1991 2001 1981-2001


Bihar 32.3 37.5 47.0 14.7
Jharkhand 35.0 41.4 53.6 18.5
Madhya Pradesh 38.6 44.7 63.7 25.1
Orissa 33.6 49.1 63.1 29.5
Uttar Pradesh 32.7 40.7 56.3 23.6
All India 43.6 52.2 64.8 21.3
Source : Economic Survey, 2009-10

In 2001, literacy rates for men stood at 59.7 percent while that for women was 33.1 percent, both
were lower than the national average literacy rate of 1991. Little wonder then that even though the
human resource base is huge, the productivity in the state has been so low. In 1998-99, only 22
percent of the children in the 10 years plus age group had completed primary schooling, a clear
indication that the backlog in educational attainment is enormous. The problem of poverty, access
to schooling and capacity of children to remain in school are all interlinked and as late as 2002, the
drop out ratio from primary schooling was almost 75 percent. Given the poor governance factor,
the quality of government schools and teaching left much to be desired. A 2003 UNICEF survey of
five districts over the previous three years revealed that teachers spent an equivalent of just two
months in the classrooms with the children. Teacher absenteeism, lack of monitoring, involvement
of teachers in government duties etc, all played a role in leaving the children un-cared for. With an
acute shortage of teachers, the pupil-teacher ratio worsened over the nineties. The private sector
did manage to step in to provide educational facilities, however access to these schools was limited
to the urban areas.

Indicus Analytics Pvt. Ltd. Page


nd 35
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
On the health front again the lack of governance shows up starkly. Although surprisingly, the
number of primary health centres grew 177 percent over the period 1985-1996, compared to the
growth rate of 140 percent at the national level, the shortage continued to be severe. More
importantly, as in the case of schools, absenteeism of staff was a regular problem. A 2003 survey
showed that 58 percent of the staff was absent on unannounced visits by independent researchers.
With the public health system plagued with problems of inadequate staff, lack of medicines and
equipment, often without basic infrastructure of power and water etc., it is little wonder that the
bulk of the population went to private doctors, if they could afford to, or to unlicensed quacks with
no medical qualifications. In the absence of any sort of regular inspections, regulation or
monitoring, the quality of health care at these private doctor and quack dispensaries was bound to
be doubtful. That the burden of poor health facilities fell disproportionately on the poor, who
formed the majority of the population in the state, added to the poor health indicators.
Table 2.3

In 2004, the infant mortality rate in Bihar was 61 out of 1000 live births, while in Jharkhand it was
much lower at 49. In 1992-93, the year for which combined data for both states is available, the
infant mortality rate was 89.2 out of 1000 live births. Clearly, this figure masked the disparity within
the state then, with the southern districts that formed Jharkhand later having better health
indicators with higher urbanisation rates. In 2003 in Bihar, only a quarter of the children in the age

Indicus Analytics Pvt. Ltd. Page


nd 36
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
group 12-35 months were given full immunisation, showing the lack of awareness as well as
difficulty in access to health care in the state.

One interesting trend in Bihar has been the rise of the coverage of households with access to safe
drinking water. In 1981, just 38 percent of the households had access to safe drinking water.
However, by 2005-06, more than 90 percent of the households reported access to an improved
source of drinking water. Unfortunately, the reason behind this high coverage lies in the definition
of ‘improved source of drinking water’, which includes not just piped water or tap water, but also
bore wells and tube wells, protected springs and rainwater. Though this definition is in line with
established practice worldwide, if we look at just piped water as being safe, while 71 percent of
urban Indian households have access to piped water, in Bihar piped water accounts for just 2
percent of urban households. While another 8 percent of urban households in Bihar source water
from public taps/standpipes, the majority, 76 percent, use tube wells/bore holes. Unfortunately,
the issue of ‘safety’ or quality of water is not addressed by this statistic nor by the survey. Apart
from faecal contamination, there are problems of nitrates, fluoride, arsenic and salinity
concentrations that are harmful for health. 15 out of Bihar’s 38 districts have been identified with
high arsenic levels. Needless to say, skin lesions and cancers triggered by arsenic are a matter of
concern in these areas where dependence on groundwater is high. Despite the positive statistic
therefore, Bihar’s health situation remains adverse.

A 2003 study by Debroy and Bhandari identified 69 backward districts in India, based on six
indicators, viz., poverty ratios, hunger, infant mortality rate, immunization, literacy rate and
enrolment ratios. Of those 69 districts, 26 were in Bihar, 13 in UP, 10 each in Jharkhand and Orissa,
6 in Madhya Pradesh, 3 in Arunachal Pradesh, and 1 in Karnataka. The fact that 26 of Bihar’s 37
districts were backward speaks volumes about the development in the state. In fact, from 1981 to
2001, Bihar consistently ranked the lowest amongst all on the Human Development Index, revealing
the huge backlog that the state has to achieve.

Indicus Analytics Pvt. Ltd. Page


nd 37
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 2.4 Human Development Index

1981 1991 2001

States Value Value Value


Kerala 0.500 0.591 0.638
Punjab 0.411 0.475 0.537
West Bengal 0.305 0.404 0.472
Orissa 0.267 0.345 0.404
Madhya Pradesh 0.245 0.328 0.394
Uttar Pradesh 0.255 0.314 0.388

Bihar 0.237 0.308 0.367


All India 0.302 0.381 0.472
Source : Human Development Report 2001, Planning Commission

One of the most crucial constraints to both economic growth and improvements in health and
education was the poor performance on most infrastructure indicators. As late as 2006, the
percentage of households connected to electricity was a dismal 13 percent, the lowest in the
country. Tele-density, which was the lowest at 0.12 percent in 1987-88, rose to 0.65 percent in
2000, not even touching 1 percent of the population. Over the same period, teledensity in Orissa
had moved up from 0.19 percent to 1.21 percent, a commendable rise, though still with low
coverage. The poverty in the state is also reflected in the asset penetration as the number of cars
per lakh of population was the lowest in the country– As late as 2003, only 72 cars per lakh of
population compared to 297 per lakh in Jharkhand. Little wonder then that the Eleventh Finance
Commission’s Infrastructure Index for India gave very low rankings to Bihar.

Indicus Analytics Pvt. Ltd. Page


nd 38
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 2.5 Index of Infrastructure Development 1999

States Index
Bihar 81.3
Gujarat 124.3
Kerala 178.7
Madhya Pradesh 76.8
Maharashtra 112.8
Orissa 81.0
Uttar Pradesh 101.2
West Bengal 111.3
Source: Eleventh Finance Commission Report, 2000

The main problem that afflicted Bihar was its polity. With corruption and rough politics reigning, the
people of the state suffered. In 2004, the Economist magazine referred to Bihar as ‘an area of
darkness’, where many people were left behind. The article said, ‘Bihar has become a byword for
the worst of India, of widespread and inescapable poverty, of corrupt politicians indistinguishable
from mafia-dons they patronise, caste-ridden social order that has retained the worst feudal
cruelties.’ Quoting a study which covered 69 most disadvantaged of India's 602 districts of which 26
are in Bihar, it said Bihar's biggest growth industry was kidnapping for ransom.

In 2005, the World Bank report on Bihar, setting forth a development strategy for the state said,
‘The challenge of development in Bihar is enormous due to persistent poverty, unsatisfactory
infrastructure and weak governance; problems that are well known but not well understood. The
people of Bihar also struggle against an image problem that is deeply damaging to Bihar’s growth
prospects. An effort is needed to change this perception, and to search for real solutions and
strategies to meet Bihar’s development challenge. The main message of this report is one of hope.’

Indicus Analytics Pvt. Ltd. Page


nd 39
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The people of Bihar voted against the 15 year rule of the RJD and ushered in a new era under a
coalition government, led by Nitish Kumar. The results of the past five years, documented in the
chapters that follow, show that the hope has been kindled and Bihar stands a good chance of rising
to contribute positively to India’s growth story, instead of being the millstone around the neck that
it was for the past two decades.

Indicus Analytics Pvt. Ltd. Page


nd 40
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Section III

New Era in Bihar (Post 2005 till Date)

Bihar struggles against an image problem that is deeply damaging to its growth prospects. However,
the situation has changed in recent years. This section presents an objective assessment of the
socio-economic progress made by the state particularly in the last five years. Two critical questions
have been dealt with in depth – (a) what has changed in the state during 2005-10? , and (b) what
implications does this change hold for the future?

A state-level comparative analysis is done under the following heads.

i) Economic Indicators
• State GDP Growth Rate
• Sectoral Growth
• Consumer Markets
• Investment Scenario
• Central Grants and Social Sector Expenditure
ii) Social and Development Indicators
• Law and Order
• Infrastructure and Communication
• Poverty
• Education
• Health
iii) Other
• Tourism
• Agriculture

Indicus Analytics Pvt. Ltd. Page


nd 41
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The overall analysis gives positive signals, Bihar is gradually treading on the path of
development.

A. Economic Indicators

a) GDP Growth Rate in Bihar (2004-05 to 2008-09)

The state's economy has never grown so fast and so consistently as it has since 2004-2005. The
Central Statistical Organization (CSO), in a report released recently, placed Bihar in the second place
in terms of growth in the Gross Domestic Product (GDP) between the years 2004 and 2009. On an
average, Bihar registered a double digit GDP growth rate of about 11 percent over the period 2004-
09 (Figure 2.1 and Table 2.1). According to Swaminathan S. Anklesaria Aiyar9, ‘this economic boom
in Bihar is real and not a statistical fudge’.

Figure 3.1: GDP Growth Rate Trend


Average Annual GDP growth rate (%)

12
10
8 Average Annual GDP growth
rate (%)
6
4
2
0
1984-89 1989-94 1994-99 1999-04 2004-09
Time Series

Source: CENTRAL STATISTICAL ORGANIZATION (CSO)

9
Swaminomics

Indicus Analytics Pvt. Ltd. Page


nd 42
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.1: GDP Growth Rate (2004-05 to 2008-09)
GDP Growth Rate (in %
Year per annum)
2004-05 12.17
2005-06 1.49
2006-07 22.00
2007-08 8.04
2008-09 11.44
Average
growth (2004-09) 11.03
Source: Central Statistical Organization (CSO)

Arguably, Bihar had been performing so badly for so long that it may just be enjoying catch-up
gains. In other words, this high growth is coming on a very low base. In fact, four of the poorest
states — Bihar (with 11.0 percent GDP growth), Orissa (8.7 percent), Jharkhand (8.5 percent) and
Chhattisgarh (7.4 percent) — qualified as miracle economies, going by the international norm of 7
percent growth. This is indeed a remarkable achievement. However, sustainable growth would only
be ensured in the State when the economy is well-diversified and the volatility in year on year
growth is robustly tackled.

According to the Bihar Economic Survey 2009-10, the main growth sectors have been construction,
communication and trade/hotels/restaurants. The annual growth rate for these high-growth sectors
was 35.8, 17.7 and 17.7 percent respectively, way above the overall average rate of 11.0 percent.
Further, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM),
Bihar GDP is estimated to reach Rs 2,64,781 crore from the current level of Rs 1,05,148 crore,
mainly due to the positive boost from good governance.

Indicus Analytics Pvt. Ltd. Page


nd 43
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
b) Sectoral growth:

With the process of growth and development, there is a structural change in the sectoral share of
income, the main focus of an economy's activity shifts from the primary, through the secondary and
finally to the tertiary sector. Further, this is accompanied by a shift in employment from the primary
sector to the other sectors as surplus labour moves to more productive avenues of employment.

Bihar’s economy is witnessing a shift towards services, much before industrialization, mostly driven
by a buoyant urban economy. This is growth induced by the government. The share of the tertiary
sector in GSDP grew in Bihar from 51 percent in 2001 to about 60 percent in 2007-08, while the
secondary sector showed a marginal increase in share from about 11 percent to about 16 percent
(Figure 2.2). The primary sector has witnessed a decrease of 13 percentage points in its contribution
to the state income.

Table 3.2: Sectoral shares in GSDP (%)


Primary Sector Secondary Sector Tertiary Sector
States 2001-02 2007-08 2001-02 2007-08 2001-02 2007-08
Bihar 37.9 24.8 11.2 15.7 51 59.5
Jharkhand 29.3 21.9 35.3 39.5 35.5 38.6
Punjab 35 32.5 22.7 24.7 42.3 42.8
West Bengal 31.3 24.8 15.2 19.4 53.5 55.8
Maharashtra 16.2 14.5 25.7 26.8 58.2 58.7
Source : Central Statistical Organization (CSO)

Indicus Analytics Pvt. Ltd. Page


nd 44
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Figure 3.2: Sectoral Share in Bihar (2001-02 and 2007-08)
Sectoral shares in Bihar as percentage of GSDP Sectoral shares in Bihar as percentage of GSDP
(2001-02) (2007-08)

24.8
37.9

51

11.2 59.5
15.7

Primary Sector Secondary Sector Tertiary Sector Primary Sector Secondary Sector Tertiary Sector

The current economic growth in Bihar has happened mainly due to its well performing service
sector. This highlights the need for providing security to the industrial set-up in the state so as to
attract investment in the manufacturing sector in the state. In addition, the state has set an
ambitious target of 7.6 percent GSDP growth in 2007-12, higher than states like Madhya Pradesh
and Uttar Pradesh (Table 2.3). This equitable growth is targeted in all the three sectors to ensure an
overall growth which is well-diversified and balanced.

Table 3.3: State-wise Target for GSDP Growth in India (Annual Averages in %) (2007-2012)
State wise Growth Target GSDP
State Agriculture Industry Services Growth
Bihar 7 8 8 7.6
Jharkhand 6.3 12 8 9.8
Madhya Pradesh 4.4 8 7 6.7
Orissa 3 12 9.6 8.8
Uttar Pradesh 3 8 7.1 6.1
West Bengal 4 11 11 9.7
Source : Ministry of Commerce & Industry, Govt. of India. (10334)

Indicus Analytics Pvt. Ltd. Page


nd 45
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
c) Consumer Market:

The consumer market is composed of individuals (or households) who buy a specific good or
service. In recent times, many factors such as urbanized lifestyle, increased influence of the media,
and growth of the service sector have completely changed the consumer market scenario in Bihar.

The per capita income in the state rose from Rs 10,415 in 2008 to Rs 13,959 in 2009, i.e. an increase
of 34 percent in single year. On the other hand, the per capita expenditure in the state is still very
low (Rs 6,800 in rural areas and Rs 12,800 in urban areas) as compared to that in other states and
India (Table 2.4). However, there are signs of rising consumerism in the state in recent times. For
example, in the last one year, there has been a growth of 39 percent in the number of private
vehicles and 67 percent rise in the number of commercial vehicles plying across Patna10.

Table 3.4: Annual Per Capita Expenditure across states (Rs per person), 2008
State Rural Area Urban Area
Bihar 6,800 12,800
Jharkhand 16,300 38,100
Maharashtra 21,300 64,100
Orissa 17,100 35,100
Punjab 23,500 41,100
Tamil Nadu 18,400 38,400
West Bengal 19,500 44,700
India 16,200 41,100
Source: Market Skyline of India, 2008

Further, rural Bihar’s widespread participation is confirmed by the rapid rise in rural sales of
branded consumer goods. Even stronger confirmation comes from the spread of the cell phone

10
India Today, Year-ender 2009, State Scan - Patna: P For Progress, Amitabh Srivastava

Indicus Analytics Pvt. Ltd. Page


nd 46
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
revolution. According to an estimate by Indicus, about 56 percent of the households in the state
belong to the middle class which offers a large and vital consumer base. There has been a steady
growth in the number of people belonging to the middle class in populous Bihar and its baby state
Jharkhand (Figure 2.3). However, a declining or stagnating trend can be observed in the neighboring
states such as Orissa, Madhya Pradesh and Uttar Pradesh. Also, the mega trend of consumerism is
revamping Patna's economic structure, besides fuelling business growth in the city. Similarly, the
retail industry here is also developing fast with improving business environment and rising income
levels.

Table 3.5: Potential Consumer Base offered by the Middle Class


Potential Consumers (Middle Class)
State 1998-99 2003-04 2007-08
Bihar 48.34 51.62 56.01
Jharkhand 42.7 47.26 57.68
Orissa 44.94 46.03 43.93
Uttar Pradesh 59.78 60.83 57.31
Madhya Pradesh 66.04 56.15 56.19
Source: Indicus Estimates using asset data from DLHS 1 2 and 3
Note: Q2, Q3 and Q4 quintiles together are considered as the 'middle class'

Indicus Analytics Pvt. Ltd. Page


nd 47
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Figure 3.3: Variation in the Strength of Potential Consumers over time

Variation in State wise Potential Consumers over


Time
% Hhds (Middle-Class)

70
60 Bihar
50
Jharkhand
40
Orissa
30
20 Uttar Pradesh
10 Madhya Pradesh
0
1998-99 2003-04 2007-08
Time-Series

Source: Indicus Estimates using asset data from DLHS 1 2 and 3


Note: Hhds refers to Households

d) Investment Climate:

Investment climate refers to the general economic conditions affecting the financial markets. A
favorable investment climate encourages businesses to improve efficiency and productivity in order
to increase revenues and capital available for investment. It also gives investors confidence in the
market and encourages them to invest more capital.

In the period spanning 2004-2010, Bihar has witnessed an annual average growth rate of about 86
percent in overall proposed investment which includes Industrial Entrepreneur Memoranda (IEMs)
filed, and Letters of Intent (LOIs) & Direct Industrial Licences (DILs) issued (Table 2.6). In 2004, the
share of Bihar in the overall proposed investment (vis-à-vis other states) was a mere of 0.1 percent
(Rs 314 crore). However, by 2010, this share increased to about 1.5 percent (Rs 13,674 crore).
Nevertheless, proposed investment in Bihar is still significantly lower than that in the neighboring

Indicus Analytics Pvt. Ltd. Page


nd 48
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
states like Jharkhand, Orissa and West Bengal. Thus, huge investment potential remains to be
tapped in the state.

Table 3.6: State-wise Investment Intentions (IEMs+LOIs+DILs) in India (Proposed Investment


in Rs. Crore)
Annual average
growth rate over
State/UTs 2004-2005 2005-2006 2006-07 2007-08 2008-09 2009-10 2004-2010
Bihar 314 3,913 4,850 6,564 9,267 13,674 86.2
Jharkhand 10,539 54,089 35,257 165,593 92,642 18,390 18.5
Madhya Pradesh 8,538 18,782 12,537 30,488 196,398 63,812 67.2
Orissa 45,565 38,255 96,869 220,529 130,433 175,155 37.9
Uttar Pradesh 21,633 31,710 33,745 13,051 13,153 8,771 -20.7
West Bengal 14,078 12,047 51,836 45,678 93,624 28,073 31.1
India 294,094 386,381 696,366 1,232,457 1,148,020 917,144 31.3

Source: Ministry of Commerce & Industry, Govt. of India

Note: Investment in terms of Industrial Entrepreneur Memoranda (IEMs) filed, Letters of Intent (LOIs) issued and Direct Industrial
Licenses (DILs) issued since November 2003.

The amount of bank credit utilized in a state measures the extent to which funds are being used for
economic activity as all sectors of the economy – agriculture, industry, trade etc – take recourse to
bank credit to meet their investment needs. Compound Annual Growth Rate (CAGR) for total bank
credit utilized over the period 2001-08 in Bihar, is 27.6 percent - higher than that in any other
neighbour state (Table 2.7). This shows generally improving investment climate in the state.

Indicus Analytics Pvt. Ltd. Page


nd 49
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.7: Total outstanding Bank Credit
CAGR(%) for Total Bank
States 2001 2008 Credit Utilized (2001-08)
Bihar 554,718 3,054,865 27.6
Jharkhand 473,335 1,738,310 20.4
West Bengal 2,947,559 12,551,150 23
Orissa 626,234 3,362,388 27.1
India 53,843,379 241,700,652 23.9
Source: Reserve Bank of India

Outstanding liability is the due amount on the state’s balance sheet, which is yet to be paid. Thus,
low outstanding liabilities foster better investment climate. As per RBI data, the total outstanding
liabilities (as Percentage of GSDP) for Bihar has a falling trend since 2004 till date (Table 2.8).

Table 3.8: Total Outstanding Liabilities (As Percentage of GSDP)


State 2004 2005 2006 2007 2008 (RE) 2009 (BE)
Bihar 76.5 75.6 78 52.9 47.9 46.3
Jharkhand 25.2 30.4 35.9 30.6 31.7 30.9
Madhya Pradesh 38.7 43.3 45.5 42.1 39.5 38.9
Orissa 62.2 62.3 64.3 45.7 40.4 38.3
Uttar Pradesh 57.7 57.8 59.9 53.6 50.3 48.1
West Bengal 48 47.1 49.4 45.3 43.5 41.5

All States 33 32.9 32.7 30.3 28.3 27.4


Source: RBI

Gross Fiscal Deficit per person in Bihar was Rs 381 in 2007-08 much lower than the national average
of 966 Rs per person (Table 2.9). Low fiscal deficit brightens up the investment climate.

Indicus Analytics Pvt. Ltd. Page


nd 50
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.9: Gross Fiscal Deficit (Rs per person)
States 2005-06 2006-07 2007-08
Bihar 566 749 381
Jharkhand 1,701 1,757 2,042
Maharashtra 1,630 1,507 985
Orissa 371 237 284
Punjab 1,438 2,126 1,879
West Bengal 1,330 1,365 1,359
India 1,041 1,009 966
Source: RBI

As the cost of living is rising in cities like Bengaluru and Hyderabad, ITcompanies are now looking to
tier-1 and tier-2 cities such as Patna and Jaipur. The World Bank's ‘Doing Business in India 2009’
report has adjudged Bihar's capital city, Patna ahead of Mumbai and second only to New Delhi
when it comes to launching a new business initiative. Furthermore, the government has invited
proposals to develop a film city in the state under the public private partnership (PPP). Four places,
Bihta, Gaya, Hajipur and Rajgir have been identified for the construction of the world class film
production units.

Apart from this, the demands for urban real estate space have come from sectors like banking,
insurance, finance, telecom, coaching and educational institutes etc. According to an estimate11,
more than 10 million sq ft are being built up to meet the demand. There are proposals to build 19
super-specialty medical colleges, 23 engineering colleges and a couple of management institutes in
the next five years. Further, the State Investment Promotion Board (SIPB), formed by the state
government, has received proposals worth Rs 96,000 crore. It has cleared 254 investment proposals
in the past four years12. However, Bihar will have to depend on its own entrepreneurs for large scale
and diverse investments — once locals build a strong foundation, outsiders are bound to follow.

11
India Today, Yearender 2009, State Scan - Patna: P For Progress, Amitabh Srivastava
12
gov.bih.nic.in/Documents/SIPB-Proposal-Status.pdf

Indicus Analytics Pvt. Ltd. Page


nd 51
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
e) Central Grants and Social Expenditure:

The buoyant growth of the state in recent times is also attributed to the fact that the flow of Central
funds to Bihar has increased manifold in recent years (Table 2.10). It went up from Rs 37,341 crore
during the five-year period 2000-2005 to Rs 55,459 crore during the next three years. (See Table
2.10)

Table 3.10: Percentage of Total Revenue Receipts from Grants


States 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Bihar 12.2 15.2 16.2 23.2 21.1 23.6 24.7
Jharkhand 14.3 25.2 25.1 16.5 20.6 17.4 14.4
Madhya Pradesh 13.3 13.9 12.4 13.8 14.5 19.1 19.5
Orissa 17.6 21.3 18.2 23.6 27.3 21.7 24.8
Uttar Pradesh 12.9 8.3 7.8 12.7 11.9 13.9 15.6
West Bengal 20.2 15.4 11.4 13.5 13.6 17.7 16.8
India 16.9 16.3 16.2 17.5 18.3 19.2 19.8
Source: Reserve Bank of India, Respective Years

The level of social sector expenditure has crucial implications for the long-term prospects of the
economy as it encompasses social services including education and health, rural development, food
storage and warehousing. As per RBI data, social sector expenditure as percent of total expenditure
has gradually increased from 30.5 percent in 2004-05 to 45.1 percent in 2008-09 (Table 2.11). In
fact, the total expenditure on social services in Bihar in 2008 has gone up to Rs 10,666 crore (35
percent salary component), which is up (more than double) from 4,197 crore of 2003-04.
Table 3.11: Social Sector Expenditure as percentage of Total Expenditure
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
State
(RE) (RE)
Bihar 30.5 38.4 41.0 43.8 45.1 44.5
Jharkhand 44.1 45.9 47.0 43.5 47.8 44.9
Madhya 24.7 32.5 35.3 35.7 39.0 38.4

Indicus Analytics Pvt. Ltd. Page


nd 52
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Pradesh
Orissa 28.9 34.2 31.7 35.9 41.5 42.8
Uttar
Pradesh 28.6 33.7 32.1 34.4 38.3 37.4
West Bengal 29.1 28.2 31.9 34.7 33.0 40.1
India 29.6 33.7 33.9 35.3 38.3 39.4

Source: RBI, Budget Documents of the State Governments.

Even per capita social sector expenditure in Bihar has increased significantly (~ 110 percent) in the
last five years. Though, outlay might not necessarily be reflected into outcome, it shows
government’s commitment to bring positive change in the state (Table 2.12). Further, the share of
expenditure on welfare of the state’s Scheduled Caste and Scheduled Tribe has almost doubled
during the period 2004 (0.4 percent) to 2008 (0.8 percent) (Table 2.13).

Table 3.12: Trend in Per Capita Social Sector Expenditure (Rupees)


1995- 2000- % Increase from 2000-
State 00 05 2005-10 05 to 2005-10
Bihar 663 761 1,597 109.9
Jharkhand – 1,283 2,756 114.8
Madhya Pradesh 1,038 777 1,252 61.1
Orissa 870 1,134 2,348 107.1
Uttar Pradesh 579 778 1,685 116.6
West Bengal 785 1,129 2,066 83.0
India 1,097 1,585 2,735 72.6
Source: RBI, Budget Documents of the State Governments.

Table 3.13: Percentage of Total Expenditure on Welfare of SC and ST


States 2004-05 2005-06 2006-07 2007-08
Bihar 0.4 0.4 0.6 0.8
Jharkhand 3 2.3 2.2 2
Madhya Pradesh 1.7 1.9 0.8 0.7
Orissa 1.1 1.4 1.6 2.4
Uttar Pradesh 1.5 1.6 1.5 0.9
West Bengal 0.3 0.3 0.2 0.2
India 0.9 1 0.8 0.8
Source: Reserve Bank of India, Respective Years

Indicus Analytics Pvt. Ltd. Page


nd 53
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The share of development expenditure in the total expenditure has been increasing gradually since
2003-04 in the state (Table 2.14). In 2007-08 this figure crossed 50 percent (53.5 percent). This is
better than in states like Uttar Pradesh, Madhya Pradesh and West Bengal, where development
expenditure as percentage of total expenditure is much lower, around 10-20 percent.

Table 3.14: Percentage of Total Expenditure on Developmental Expenditure


2003- 2004- 2005- 2006- 2007-
States 04 05 06 07 08
Bihar 34.3 35.2 36.9 49.4 54.9
Jharkhand 47.8 50 50.7 55 53.5
Madhya
Pradesh 25.3 22.3 23.1 15.7 13.1
Orissa 20 22.7 28.1 33 53.3
Uttar
Pradesh 17.9 23.3 27.1 35.5 19.2
West Bengal 9.6 13.1 14 10.8 11.1
India 19.2 24.1 27.1 20.7 21.3
Source: Reserve Bank of India, Respective Years

However, the flip side is that this growth in social sector expenditure does not get reflected in social
indicators which remain abysmal. It would be unrealistic to ‘expect the moon’ at this stage. Right
now the fundamentals are getting corrected and mostly infrastructural indicators of growth are
visible13. One will have to wait for social indicators to improve over time. Further, a robust social
service delivery system requires win-win relationships between policy makers and services
recipients and that between policy makers and service providers.

Despite facing many daunting challenges there are several instances of successful development
efforts in Bihar. These demonstrate that projects can succeed and entrepreneurship can thrive and
that strong leadership and a vision for change could yield dramatic results. The Bihar State
Cooperative Milk Producers' Federation (COMFED), Muzaffarpur’s National Literacy Campaign, and
the Paliganj Participatory Irrigation Management experience are examples of excellence.

13
Shaibal Gupta cited in ‘Bihar, A Growth Story’, Times Of India, January 10, 2010

Indicus Analytics Pvt. Ltd. Page


nd 54
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
B. Development and Social Indicators

a) Law & Order and Governance

Law & Order

The most positive move of this era is that the incidence of murder reduced at an average annum
rate of 3.6 percent in Bihar during 2005-08 (Table 2.15). This is in stark contrast to neighboring
states of Jharkhand, West Bengal and Orissa where the incidence of murder increased over the
same period.

Table 3.15: Per Annum Change in the Incidence of Murder


State Per Annum Change Rate 2005-08 (%)

Bihar -3.6
Jharkhand 4.1
West Bengal 8.4
Orissa 5.0
India 0.5
Source: Crime in India, National Crime Record Bureau, Respective Years

Growth and development are feasible only when there is peace and order in the civil life of a state.
The presence of a strong police force is essential for enforcing the law of the land and combating
crime. Strength of civil and armed police force increased by 5.9 percent during 2005-08 much higher
than the national average of 3.8 percent (Table 2.16). This shows the commitment of the state
government to improve the law and order situation in the state and establish peace.

Indicus Analytics Pvt. Ltd. Page


nd 55
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.16: Civil and Armed Police strength

States 2005 2006 2007 2008 Per Annum Change 2005-08 (%)
Bihar 51,046 51,623 55,875 60,091 5.9
Jharkhand 24,563 28,766 40,498 51,828 29.5
West Bengal 80,039 80571 80,071 78,718 -0.6
Orissa 34,911 38752 38,272 29,167 -5.4
India 1,342,858 1406021 1,425,181 1,473,595 3.0
Source: Crime In India, National Crime Record Bureau, respective years

As per National Crime Records Bureau (NCRB) data, during 2005-08 there has been a modest
increase (3.4 percent) in the incidents of kidnappings and abductions in contrast with rapid increase
(15.0 percent) during the period 2001-04 (Table 2.17). Only 317 kidnappings for ransom were
reported during the last four years as against 1,393 during the previous four14. The kidnapping
‘industry’ has clearly fallen on hard times. One indication of this is that doctors no longer refuse to
go to patients' homes on emergency calls! Nevertheless, it is imperative to increase employment
opportunities in Bihar so that lesser number of people, especially amongst the youth are attracted
towards crime.
Table 3.17: Annual Growth in ‘Kidnapping & Abduction’*
State 2001-04 2005-08
Bihar 15.0 3.4
Jharkhand 2.2 9.5
Uttar Pradesh -11.5 23.7
West Bengal 10.8 25.4
Orissa -0.7 12.5
India 0.2 10.3
Source: NCRB, Indicus Estimates

14
‘Bihar, A Growth Story’, Times Of India, January 10, 2010

Indicus Analytics Pvt. Ltd. Page


nd 56
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Note: * As defined in Sec. 363-369,371-373 IPC

Governance:

Good governance is the prerequisite for the overall development of a region. Yet Bihar has spent
many years without being a functioning state. To quote an eminent politician in Bihar, ‘Bihar has
never been the case of bad governance. It was actually the case of absence of governance. Now
governance is visible’. For the first time in more than two decades, there is an effort to build a state
structure. If it gets institutionalised and consolidated, then the development will in fact be state
driven in the right direction.

E-shakti (meaning ‘power from electronic governance’) – a unique e-governance measure taken by
the state, has covered 13.5 lakh people in Patna district. It is now being expanded to cover the
whole state. This is the biggest ever biometric card scheme in the world. Only such a revolutionary
new technology that bypasses traditional avenues of corruption can deliver the goods in Bihar and
India.

b) Infrastructure & Communication

Infrastructure

Infrastructure which includes physical assets such as roads, railways, utilities, water, sewage,
electricity etc, is considered essential for enabling productivity in the economy. Developing
infrastructure often requires large initial investment, but the economies of scale tend to be
significant. What seems to be happening is that the Bihar government has been successful in
mobilizing funds, largely from the Center, to spend on the creation of infrastructure.

Indicus Analytics Pvt. Ltd. Page


nd 57
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The construction sector has been growing in prominence over the years as the demand from
housing, commercial spaces and infrastructure projects have surged. The consumption of cement
allows comparison between different states to reflect on the extent to which assets are being built
up in the region. In the period 2003-04 to 2007-08, Bihar observed an annual growth rate of 9.0
percent in the consumption of cement (Table 2.18). This is a clear evidence of the upsurge in the
construction sector in Bihar.

Table 3.18: Cement Consumption ('000 Tonne) (2003-2004 to 2007-2008)


Average Annual
Growth Rate over
Region/State 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2003-08
Bihar 3,130 3,800 4,360 4,493 4,537 5,104 9.0
Jharkhand 2,026 2,314 2,631 2,632 2,679 3,110 7.7
Orissa 3,377 3,901 4,146 4,432 4,717 5,470 9.1
West Bengal 5,782 6,223 6,589 6,928 7,287 7,651 5.7
Total Eastern
Region 17,477 20,397 22,661 23,991 25,347 28,218 9.3
Total -
Domestic
Consumption 113,863 123,078 135,563 149,360 164,033 177,983 9.5
Source: Cement Manufacturers' Association.

Connectivity is an important determinant for economic growth and a good road network is crucial
for bringing the fruits of growth to all corners of a region. Interestingly, Bihar was the venue of the
70th annual session of the Indian Road Congress (IRC). The government of Bihar is now spending
almost 30 per cent of its plan outlay on roads and bridges (Table 2.19). In fact, Patna is likely to
become a state capital with the maximum number of road over bridges (eight) by the end of the
year. These ROBs have concrete girders, railings and footpath facilities for the convenience of
pedestrians. Further, More than 6,800 km of roads have been re-laid and 1,600 bridges and culverts

Indicus Analytics Pvt. Ltd. Page


nd 58
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
constructed in the last four years. About 2,417 km roads were constructed in the state in 2008-09
compared to 415 km in 2005-0615.

Table 3.19: Release of Funds under PMGSY (in Rs. Crore)


States 2006-07 2007-08 2008-09 2009-10
Bihar 571 733 1,065 1,038
Jharkhand 57 NA 211 225
Madhya Pradesh 1,165 1,616 1,895 1,218
Orissa 642 547 1,251 786
Uttar Pradesh 325 1,228 1,676 2,078
West Bengal 124 550 635 375
India 6,265 10,900 14,849 11,316
Source: Lok Sabha Starred Question No. 202, dated on 17.07.2009.

Further, about 748 km of road (higher than in any other neighboring state) were completed under
Pradhan Mantri Gram Sadak Yojana (PMGSY) over the period 2000-09 till in Bihar (Table 2.20). Also,
percentage of habitations connected by pucca roads under PMGSY increased from 31 percent in
2000 to 44 percent in 2009 (Table 2.21).

Table 3.20: Road Completed under PMGSY in India (Up to January 2009)
Road Completed (In
States km.)
Bihar 748
West Bengal 679
Punjab 516
Tamil Nadu 469
Jharkhand 110
Source: Lok Sabha Unstarred Question No. 487, Dated on 20.2.2009

15
‘Bihar, A Growth Story’, Times Of India, January 10, 2010

Indicus Analytics Pvt. Ltd. Page


nd 59
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.21: Percentage of Habitations connected by pucca roads
State 2000 2009
Bihar 30.8 44
Jharkhand 50 59.6
Orissa 42.1 66.5
West Bengal 30.5 58.5
All India 59.2 72.8
Source: PMGSY, Ministry of Rural Development

Bihar among its neighbour states witnessed the maximum percentage increase (7.6 percent) in the
households having electricity connections over the period 2002-04 to 2007-08.

Table 3.22: Percentage of households having electricity connections


Electricity Percentage
State 2002-04 2007-08 Increment
Bihar 14.1 21.7 7.6
Jharkhand 31.9 32.5 0.6
Maharashtra 83.6 77.6 -6
Punjab 96.2 98.4 2.2
Tamil Nadu 87 91.2 4.2
INDIA 71.6 69.4 -2.2
Source: District level Household Survey –III, II

The steady growth in the number of passengers per outbound movement in the state of Bihar is a
clear evidence of air travel gradually becoming more affordable and popular with wider sections of
the population (Table 2.23). States such as Jharkhand, Madhya Pradesh and Orissa lag far behind
Bihar in terms of outbound movement of passengers.

Indicus Analytics Pvt. Ltd. Page


nd 60
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.23: Passengers per Outbound Movement
State 2005-06 2006-07 2007-08
Bihar 52 53 60
Jharkhand 28 38 35
Madhya Pradesh 31 43 35
Orissa 46 52 54
West Bengal 84 86 91
India 86 88 88
Source: Various Annual Reports, Airport Authority of India

Gaya airport in Bihar has ambitious plans of expansion of its runway from 7,500 feet in 2008 to
9,000 feet in 2011. The incurred cost is estimated to be about Rs 10 crore which is much less than
that for other airports such as Varanasi, Bhopal and Kolkata (Table 2.24).

Table 3.24: Expansion of Runways in India (2008-2011)


Existing
Length New Length
Estimated before after
Expenditure Extension (In Extension (In
States/ Schemes/Airports Scheme in Rs. Crore) Feet) Feet)
Extension of Runway
for A - 310 Type of
Bihar (Gaya) Aircraft 10 7,500 9,000
Extension &
Strengthening of
Madhya Pradesh (Bhopal) Runway 52.1 6,709 9,002
Extension of Runway
to 9000 Ft. and
Provision Shoulders
Uttar Pradesh (Varanasi) etc. 31.43 7,236 9,000
Extension of
West Bengal (Kolkata) Secondary Runway 35 7,870 10,626
Source: Compiled from the statistics released by : Rajya Sabha Unstarred Question No. 2337, dated 15.04.2008.

Communication
The communications infrastructure provides an expansion of choices available to individuals to
enable them to lead fulfilling and improved lives. ICT partners with existing services and existing
forms of technology to make them reach more and more people faster at a cheaper rate and

Indicus Analytics Pvt. Ltd. Page


nd 61
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
provides a more expansive and wider platform, if there is equitable access to the communication
infrastructure.

Telephone density (per hundred people) over the period 2006-07 to December 2009 increased by a
phenomenal annual growth rate of about 122 percent as compared to the national average of 67
percent (Table 2.25). Further, none of the states in the vicinity of Bihar has witnessed such a sharp
rise in telephone density, except Orissa which witnessed a 95 percent growth.

Table 3.25: Telephone Density (%) across states


Annual Growth (in
State 2006-07 2007-08 Dec 2009 %)
Bihar 6.7 11.1 33 121.9
Jharkhand 3.2 3.4 4.7 21.2
Maharashtra 26.8 36.1 46.6 31.9
Tamil Nadu 27.1 40.7 67.8 58.2
Punjab 36.8 47.6 69.9 37.8
West Bengal 13.9 20.1 30.3 47.6
Orissa 8.8 13.4 33.6 95.4
India 17.1 24.2 47.9 67.4
Source: Annual Report, Department of Telecommunications

Mobile connections per thousand people in Bihar increased by annual growth rate of about 94
percent over 2006-07 to 2008-09 much higher than the national average of 60 percent during the
same period (Table 2.26). According to an estimate by Bharti Airtel, Bihar has the fastest growth of
talk-time in any state.

Indicus Analytics Pvt. Ltd. Page


nd 62
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.26: Mobile Connections per 1000 people
Annual Growth (in
State 2006-07 2007-08 2008-09 %)
Bihar 55.8 98.4 210.9 94.4
Jharkhand 16.6 19.1 27.2 28.0
West Bengal 50.4 90.9 306 146.4
India 132.5 203.8 336.8 59.4
Source: Annual Report, Department of telecommunications

Annual growth rate of internet subscribers between 2006 and 2009 in Bihar was 46.6 percent as
compared to about 39 percent for India (Table 2.27). However, Orissa also observed a remarkable
growth of about 62 percent.

Table 3.27: Circle-wise Number of Internet Subscribers in India


Mar Annual Growth
State/Telecom Circle 2006 Dec 2007 Mar 2009 Rate (%)
Bihar (+Jharkhand) 83,298 129,634 179,043 46.6
Madhya Pradesh
(+Chhattisgarh) 218,952 385,770 503,708 51.7
Orissa 58,169 102,549 152,280 61.8
Uttar Pradesh
(+Uttarakhand) 338,797 508,542 644,735 37.9
West Bengal (+Sikkim) 442,587 671,207 860,700 39.5
7,053,02 13,646,70
India 2 10,506,586 0 39.1
Source: Lok Sabha Unstarred Question No. 1121, dated on 13.07.2009.

c) Poverty
The poverty line in India is measured by taking the income (separately for rural and urban areas)
necessary to buy a basic food-basket, the consumption of which yields a minimum level of calories.

Indicus Analytics Pvt. Ltd. Page


nd 63
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
It takes into account only the expenditure required for food for subsistence, leaving out other
components of all other goods and services - housing, clothing, education and health services -
needed for a decent living.

The poverty level denoted by the Head Count Ratio in the state is measured at 38.1 percent in 2008-
09 (Table 2.28). During the period 2001-02 to 2008-09, Bihar observed the maximum fall in poverty
ratio (7.1 percentage points) among its neighboring states. Similarly, as per DLHS I, II and III asset
data, about 38 percent households constitute the ‘poorest quintile’ in the state (Table 2.29).

Indicus Analytics Pvt. Ltd. Page


nd 64
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.28: Percentage of population living below the poverty line
Fall in Head
State 2001-02 2008-09 Count Ratio

Bihar 45.2 38.1 7.1


Chhattisgarh 42.4 41.0 1.4
Jharkhand 44.0 39.2 4.8
Madhya Pradesh 41.9 39.8 2.1
Orissa 46.6 46.3 0.3
Uttar Pradesh 34.9 31.1 3.8
West Bengal 26.9 21.4 5.4
Source: Indian Development Scape 2008, Indicus Analytics
Note: Percentage of population living below the poverty line. Poverty line is essentially the cost of a bundle of
commodities that could provide a little over 2400 cal of food intake to an average Indian living in rural areas and 2100
cal in urban areas.

Table 3.29: Poorest Quintile over time


Poorest Quintile

State 1998-99 2002-04 2007-08


Bihar 43.95 40.67 37.65
Jharkhand 50.41 44.51 36.07
Orissa 45.7 44.44 46.27
Uttar Pradesh 26.8 25.49 31.31
Madhya Pradesh 19 29.54 32.62
Source: Indicus Estimates using asset data from DLHS 1 2 and 3

About 40 lakh ration cards had been issued to the below poverty line population in Bihar till June
2009. Similarly, under Antyodaya Anna Yojana (AAY) about 24 lakh people were issued ration cards
as compared to about 14 lakh in Orissa and 15 lakh in West Bengal (Table 2.30).

Indicus Analytics Pvt. Ltd. Page


nd 65
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.30: Number of Ration Cards Issued to BPL, Antyodaya Anna Yojana (AAY) and APL
Households in India (As on 30.06.2009)
Ration Cards Issued (in Lakhs)
States/UTs BPL AAY APL Total
Bihar 39.94 24.29 15.53 79.76
Jharkhand 14.76 9.18 5.15 29.09
Orissa 37.63 12.65 36.02 86.3
West Bengal 37.98 14.8 121.74 174.52
India 842.78 242.45 1335.84 2421.37
Source: India Stat Lok Sabha Unstarred Question No. 438, dated 07.07.2009.

Rural poverty in Bihar is associated with limited access to land and livestock in addition to poor
education and healthcare. Thus, apart from quality provision of education and health, generating
productive income earning opportunities in agriculture remains pivotal to reducing chronic poverty
in rural Bihar. Further, if manufacturing is encouraged by ensuring law and order situation with
suitable infrastructure, it would remove poverty from Bihar by creating employment opportunities.

d) Education:

Literacy rate in Bihar increased by 7.7 percentage points over the period 2002-04 to 2007-08, higher
than any neighbor state or India (Table 2.31)

Table 3.31: Literacy Rate across different states


States 2002-04 2007-08
Bihar 51 58.7
Jharkhand 56.4 62.1
Maharashtra 73.5 74.7
Punjab 70.6 75.9

Indicus Analytics Pvt. Ltd. Page


nd 66
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
West Bengal 68.7 72.1
Orissa 62.8 69.2
India 67.2 71.9
Source: District Level Household Survey III, II

Higher education is the next step in raising the skills of the population as it provides trained
manpower for employment in industries and services. In fact without creating sufficiently excessive
capacity for professional education, the state can not even dream of sustained growth in per capita
income. In the post 2004-05 era, there has been a remarkable growth in the infrastructure of
professional education in the state. As per Selected Educational Statistics (SES), there were about
1.8 professional colleges (Management, Law, IT, Agricultural Colleges) per million people in Bihar in
2006-07 (Table 2.32). This capacity has more than doubled in the last five years though, Bihar needs
to continue its focus on higher and professional education in the coming years. The recent
partnership between IIT Patna and the UNICEF would go a long way in improving the socio-
economic status of women and children in Bihar.

Table 3.32: Number of Management, Law, IT, Agricultural Colleges per Million People
State 2002-03 2003-04 2004-05 2005-06 2006-07
Bihar 0.7 0.7 0.7 1.4 1.8
Jharkhand 0.5 0.5 0.3 0.8 0.9
Madhya Pradesh 3.3 3.3 3.2 2.2 2.2
Uttar Pradesh 0.7 1.5 3.9 3.8 3.3
Maharashtra 1.3 1.3 1.3 4 4.2
Kerala 2.5 2.5 2.5 2.5 0.9
India 1.9 1.9 2.2 2.3 2.3
Source: Selected Educational Statistics, respective years

Indicus Analytics Pvt. Ltd. Page


nd 67
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Total expenditure on primary and secondary education per child (6-14 years age group) in Bihar is
about Rs 1400 which is higher than those in West Bengal and Punjab (Table 2.33). Further, there are
less number of students per teacher in Bihar than in Orissa, Jharkhand or West Bengal (Table 2.34).
The pupil-teacher ratio is showing a falling trend in the state, translating into higher attendance and
improved quality of education.

Table 3.33: Total Expenditure on primary and middle level education per child (6-14 years)
2005-06

State Rs. Per Person


Bihar 1,393
Jharkhand 1,821
Punjab 1,189
Orissa 1,743
West Bengal 1,279
India 1,810
Source : Analysis of budgeted expenditure on education, Ministry of HRD

Table 3.34: Pupil Teacher Ratio across different states


State 2004-05 2005-06
Bihar 19 17
Jharkhand 24 28
West Bengal 30 29
Orissa 17 18
India 25 26
Source: Selected Educational Statistics, respective years

Indicus Analytics Pvt. Ltd. Page


nd 68
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
e) Health:

Life expectancy in Bihar is 61 years, almost at par with the national life expectancy of 62.7 years.
The death rate in the state (7.5 per thousand population) is very close to the national average
(Table 2.35). Table 2.36 shows that by 2016, the crude death rate in Bihar would reach below the
national average.

Table 3.35: Death Rate across different states, 2007


State Death Rate
Bihar 7.5
Jharkhand 7.3
West Bengal 6.3
Orissa 9.2
Maharashtra 6.6
Punjab 7
Tamil Nadu 7.2
INDIA 7.4
Source: Sample Registration System (SRS) Bulletin

Table 3.36: Projected Crude Death Rate (CDR)


Period Bihar India
2001-06 10.0 8.3
2006-11 9.4 7.8
2011-16 8.9 7.5
2016-20 6.6 7.1
2021-25 6.7 7.2
Source: Compiled from the statistics released by Registrar General of India, Directorate General of Health Services, Ministry of Health
& Family Welfare, Govt. of India.

Table 2.37 shows that population served per bed in government hospitals is lower in Bihar (4163) as
compared to those served in Uttar Pradesh (5,646) and Jharkhand (5,494). Further, total registered
AYUSH doctors per 10,000 population in January 2008 were about 18 as compared to the national
average of 7 (Table 2.38). This underscores the importance of Indian system of medicine for

Indicus Analytics Pvt. Ltd. Page


nd 69
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
improving healthcare scenario in the state. On the other hand, the allopathic doctors’ density in
Bihar was much lower than the national average in 2008, reflecting the need for attracting qualified
allopathic doctors, particularly in rural areas.

Table 3.37: Number of Govt. Hospitals & Beds 2007-08


Total
Population Served Population Served Per Govt.
State/UT/Division Hospitals Beds Per Govt. Hospital Hospital Bed
Bihar 1,717 22,494 54,533 4,163
Jharkhand 500 5,414 59,490 5,494
Assam 100 3,000 278,780 9,293
Uttar Pradesh 925 32,460 198,143 5,646
Orissa 1,707 14,551 23,231 2,725
West Bengal 383 49,681 224,869 1,734
India 11,289 494,510 101,403 2,315
Source: Directorate General of State Health Services
Notes: Rural & Urban bifurcation is not available in Bihar & Jharkhand.

Table 3.38: Number of Total Registered Allopathic Doctors, Dental Surgeons and AYUSH
doctors
State/ UT Total Total registered Total registered Total registered
registered AYUSH Doctors Allopathic AYUSH Doctors per
Allopathic (As on 1-1-08) doctors per 10,000
Doctors (2008) 10,000 population(As on 1-
population 1-08)
(2008)
Bihar 37,753 166,152 4 17.7
Jharkhand 1,420 NA 0.5 NA
Orissa 16,068 7,571 NA 1.9
West Bengal 56,488 48,175 6.5 5.5

Indicus Analytics Pvt. Ltd. Page


nd 70
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Uttar Pradesh 52,181 93,794 2.7 4.9
India 725,190 751,926 6.3 6.6
Source: National Health Profile 2008

Bihar’s progress during the four year period between DLHS 2 (2002-04) to DLHS 3 (2007-08) is
mixed. For example, institutional deliveries increased from 18.8 percent to 27.7 percent, however,
mothers receiving full antenatal care decreased from 4.3 percent to 3.9 percent. Similarly, full
immunisation in children 12-23 months increased from 20.7 percent to 41.4 percent, however, the
State continues to have high dropout from BCG to DPT 3 which is critical for further improvement in
full immunization coverage. ‘Janani’ - an innovative experiment within Bihar initiated social
marketing of birth control in the state through a franchising system. Such successful experiments
need to be replicated throughout the state and the country.

As per the Bulletin on Rural Health Statistics 2008, there are a sub-center and a health center to
serve the population at an average distance of 1.8 km and 4.2 km respectively. This distance is more
in case of Jharkhand, Uttar Pradesh and Orissa. Therefore, sub-centers and primary health centers
are relatively more accessible in Bihar than those in its neighboring states. However, a huge gap still
remains to be bridged in this regard. The Reproductive and Child Health Facility Survey conducted in
2000 reveals poor availability, utilisation and quality of services in the Primary Health Centres,
Community Health Centres (CHCs) and the Sub-Centres (SCs). The health facilities in all such health
centres need to be upgraded to improve reproductive and child health status across the state.

Indicus Analytics Pvt. Ltd. Page


nd 71
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.39: Average Radial Distance Covered by Healthcare Institutions (As on March, 2008)
Primary
Sub- Health
Centers Centers
State (SCs) (PHCs)
Bihar 1.82 4.23
Jharkhand 2.5 8.67
Uttar Pradesh 1.91 4.5
West Bengal 1.62 5.42
Orissa 2.7 6.17
All India 2.61 6.5
Source: Bulletin on Rural Health Statistics in India 2008. Infrastructure Division MOHFW/GOI

Indicus Analytics Pvt. Ltd. Page


nd 72
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
iii) Other

a) Tourism:
Rapid growth of the economy, increase in the general income level of the populace and aggressive
advertisement campaigns on the tourist destinations have led to upsurge in the tourism industry in
Bihar. The state has fabulous places like Nalanda Vishwavidyalaya, Bodh Gaya, Pawapuri temple,
Rajgir, Babadham, etc which attract tourists to the state.

As per Ministry of Tourism (GoI) statistics, in 2008, Bihar attracted as many foreign tourists as Goa.
Further, there has been a gradual increase in the inflow of foreign tourists in Bihar since 2005 (Table
2.40). According to the Bihar Economic Survey for 2009-10, Bihar attracted 3.46 lakh tourists in
2008 compared to only 61,000 in 2003 – an increase of more than 450 percent!

Table 3.40: State-wise Foreign Tourist Visits in India (1997 to 2006) in '000
States/UTs 2,002 2,003 2,004 2,005 2,006 2007 2008
Bihar 113 61 38 63 85 177 346
Goa 272 314 363 337 380 388 351
Kerala 233 295 346 346 429 516 599
Madhya Pradesh 67 92 145 161 187 234 252
Orissa 23 25 29 33 39 42 44
Uttar Pradesh +
Uttarakhand 710 817 1,037 1,175 1,329 1,524 1,610
Jharkhand 2 3 4 6 4 4 6
West Bengal 529 705 776 896 998 1,155 1,134
India 5,158 6,708 8,360 9,940 11,404 13,267 14,113
Source : Ministry of Tourism, Govt. of India

Indicus Analytics Pvt. Ltd. Page


nd 73
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
b) Agriculture:

Agriculture is the key to the overall development of the state economy as it continues to generate
more than 40 percent of the State Domestic Product. The percentage of population employed in
agriculture in Bihar is estimated to be 80 percent, which is much higher than the national average.
Agriculture production can only be increased to some extent through enhanced cropping intensity,
change in cropping pattern, improvement in seeds of high yielding varieties, cultivation practices
and with the availability of better post harvest technology etc. The state government is trying to re-
orient agriculture through diversification policy and other measures. Major goals of the state in the
agricultural sector can be outlined as below:
i) To ensure increase in income of farmers to viable levels
ii) To ensure food security through increase productivity
iii) To foster nutritional security through raising levels of productivity as well as raising living
standards of rural societies.
iv) To revitalize farming in order to create gainful employment and to check migration.
v) To ensure that policies bring about agricultural growth with justice, with programmes focusing on
gender and human aspects.

Agricultural marketing simply involves the buying and selling of agricultural produce. As per the
Ministry of Agriculture, GoI, there were 526 regulated markets in the state in March 2008 (Table
2.41). An important development in the field of regulated markets is the keen interest taken by the
International Development Agency (IDA) in the development of the infrastructure in regulated
markets. For example, the IDA is financing the development of infrastructure in 50 regulated
markets of Bihar.

Indicus Analytics Pvt. Ltd. Page


nd 74
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 3.41: Number of Wholesale, Rural Primary and Regulated Markets (As on 31.03.2008)
Number of Markets Regulated Markets
Sub-Market
States/UTs Wholesale Rural Primary Total Principal Yards Total
Bihar 325 1,469 1,794 95 431 526
Jharkhand 205 603 808 28 173 201
Gujarat 207 129 336 196 218 414
Haryana 284 187 471 106 178 284
Madhya
Pradesh 237 1,321 1,558 237 264 501
Orissa 398 1,150 1,548 45 269 314
Uttar Pradesh 584 3,244 3,828 245 342 587
West Bengal 279 2,955 3,204 43 641 684
India 6,503 20,887 27,390 2,478 5,088 7,566
Source : Ministry of Agriculture, Govt. of India. (11151)
Note: 1.In Bihar and West Bengal Sub Yards include cold storages and hence figures of total regulated markets and wholesale markets
are not comparable.
2. All principal regulated markets are wholesale markets, whereas sub market yards may/may not be a wholesale market as it also
includes some of rural Primary Markets notified for regulation.

It is evident from Table 2.42 that Bihar has witnessed the highest annual growth rate of the
production of total foodgrains among its neighbor states over the period 2004-2008. It is almost
double the growth rate in Madhya Pradesh and about quadruples that in Uttar Pradesh.

Table 3.42: Production of Total Foodgrains (2001-2002 to 2008-2009 ('000 Tonne)


Average
Annual Growth
Rate over 2004
States/UTs 2004-05 2005-06 2006-07 2007-08 2008-09 to 2008
Bihar 7,704.4 8,586.8 11,098.6 10,864.1 12,220.7 12.3
Gujarat 5,257.5 6,154.0 6,499.0 8,206.0 6,481.0 7.3
Madhya Pradesh 14,104.8 13,195.0 13,747.0 12,070.5 13,914.6 -1.2
Orissa 6,889.7 7,359.7 7,344.7 8,143.3 7,399.1 2.5
Punjab 25,670.7 25,184.2 25,313.1 26,815.1 27,329.8 1.9
Uttar Pradesh 37,836.3 40,410.2 41,214.5 42,094.8 46,729.3 4.7
West Bengal 16,055.4 15,608.9 15,974.5 16,050.2 16,295.6 0.6
India 198,362.8 208,601.6 217,282.1 230,775.0 234,466.4 4.5
Source : Ministry of Agriculture, Govt. of India

Indicus Analytics Pvt. Ltd. Page


nd 75
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Bihar has the maximum yield (in kg/hectare) of total cereals among all its neighboring states such as
Madhya Pradesh, Orissa, Uttar Pradesh and West Bengal (Table 2.43). Further, it is more than
double the national average.

Table 3.43: Yield (in kg / hectare) of total Cereals in India


Average Annual Growth
Rate over 2004-05 to 2007-
States/UTs 2004-05 2005-06 2006-07 2007-08 08
Bihar 1,247 1,368 1,749 1,615 10.8
Jharkhand 1,345 1,159 1,712 1,906 15.4
Madhya
Pradesh 1,342 1,348 1,375 1,324 -0.2
Orissa 1,426 1,511 1,516 1,676 5.0
Uttar Pradesh 2,150 2,260 2,266 2,394 3.3
West Bengal 2,542 2,481 2,575 2,578 0.8
India 1,903 1,968 2,020 2,151 4.0

Source: Ministry of Agriculture, Govt. of India

Indicus Analytics Pvt. Ltd. Page


nd 76
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Section IV

District Profile of Bihar

Bihar has thirty eight districts. The distinctive characteristics of each are given below in brief:

The backbone of the Araria district is formed by the jute mills along with the cultivation of crops like
paddy, maize, jute. This district is also known to be the natural habitat of the Gangetic dolphin.

The Aurangabad district is famous for woollen carpets and blanket weaving.

In Begusarai district, above 85 percent people depend upon agriculture. Oil refinery complex at
Barauni is well-known.

Banka district is the producer of crops like paddy, wheat, maize and lentils. Banka’s home made
Khadi and silk are popular in the whole country.

Indicus Analytics Pvt. Ltd. Page


nd 77
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
The administrative headquarters of the Bhojpur district is located in Arrah. Bhojpur has a rich
literary and musical lineage.

East Champaran district is an important district of the state with its headquarters at Motihari.
Gandhiji’s first Satyagraha took place at Champaran district.

Gopalganj district is significant because of the flourishing cottage industries like weaving,
woodwork, potteries and bamboo work.

The topography of Jamui district is marked by hills and plains and the district occupies an area of
3,122 sq. km. Archaeological and historical evidence shows Jamui’s close association with Jain
tradition for a long past to the present time.

Gaya district is famous for Bodhgaya an important pilgrimage site of Buddhism.

Darbhanga and Buxar are two most important districts of Bihar and some of the important crops
like sugarcane, wheat, rice are cultivated here in huge quantities. Darbhanga city is essentially a
twin city with Darbhanga tower and Laheriasarai tower at its two ends. The remains from
archaeological excavations have established the link of Buxar with ancient civilisations of
Mohanjodaro and Harappa.

Nalanda, well known for its rich and glorious past, was founded in the 5th Century AD. It is known
as the ancient seat of learning.

Patna, the capital city of Bihar, has the highest per capita gross district domestic product in Bihar.

Jehanabad district is drained by the Phalgu river. The Barabar International Tourist Centre, situated
in the hilly area of Jehanabad, is world famous for its ancient Seven Rock cut Buddhist Caves.

The main attractions of Kaimur district are the Kaimur hills and the Kaimur Wildlife Sanctuary which
are ideal tourist destinations.

The main rivers traversing Katihar district are the Mahananda and the Ganges. The district
comprises three sub-divisions: Katihar, Barsoi and Manihari.

Khagaria district is one of the important districts of Bihar with its headquarters at Khagaria. Earlier,
Khagaria was part of the Munger district.

Indicus Analytics Pvt. Ltd. Page


nd 78
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Kishanganj district is the religious destination of devotees of all faiths. The different places of
worship are Maa Kali Mandir, Odraghat, Masjid, Sri Digambar Jain Mandir, Gurdwara Guru Singh
Sabha, Catholic church and Mazare Kadam Rasool.

The climate and the land of Lakhisarai district are favourable for the cultivation of crops like wheat,
paddy, lentils and maize. Before coming into existence as a new district, Lakhisarai was a sub-
division within Munger District.

Madhepura district situated on the plains of the river Kosi is dominated by the jute mills.

Madhubani district is spread over an area of 2,501 sq. km. and is dominated by the sugar factories.
Famous Madhubani paintings belong to this region.

Monghyr district is situated in the southern part of Bihar and the prominent tourist attractions of
the place are Kharagpur Lake, Chandika Astahan, Pir Shah Nafah Shrine, Kastaharni Ghat, Sita Kund,
Manpathar, Ucheswar Nath, Goenka Sivalaya, Sri Krishna Vatika, Pirpahar.

Muzaffarpur district is a district of industrial importance. There are sugar factories at Motipur, a
thermal power station at Kanti, a wagon factory at Muzaffarpur, and pharmaceuticals at
Narayanpur.

Nawada district is spread over an area of 2,494 sq km, the main crop cultivated is paddy and an
important industry is the beedi industry.

Purnia district is the oldest district in Bihar. It covers an area of 3,229 sq km and produces large
quantities of eggs.

The main rivers traversing the Rohtas district are Son and Kaw. Some of the important industries
located here are cement factories at Banjari and Dalmia Nagar, vegetable oil mill, and paper factory
at Dalmia Nagar.

Saharsa district is divided into seven blocks Saharsa Sadar, Menhasari, Simri Bhaktiyarpur,
Nauhatta, Saurbazar, Sonbarsa, and Salkhua.

Samastipur district is spread over an area of 2,904 sq.km. The rivers flowing through this district are
Burhi Gandak, Baya, Kosi, Kamla, Kareh, Jhamwari, and Balan.

The district headquarters of the Saran district is at Chhapra. An important town of the district is
Sonepur where a cattle fair is held every year and this is Asia’s largest international cattle fair.

Indicus Analytics Pvt. Ltd. Page


nd 79
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Sheikhpura district is divided into six blocks which are Ariari, Sheikhpura, Barbigha, Ghatkusumba,
Chebara, and Shekhopur Sarai.

Sheohar district covers an area of 443 sq km. with its district headquarters at Sheohar town.

Sitamarhi district is an agricultural and an industrial district. The important crops grown here are
paddy , wheat , maize and lentils. This is the place where Sita was born, the main character of the
epic Ramayana. The district is situated along the border of Nepal.

Siwan district is dominated by sugar factories. The rivers flowing through the district are Daha and
Jharhi.

Supaul district is spread over an area of 2,420 sq.km. and the economy largely depends on
agriculture. The main crop cultivated here is paddy.

The main attractions of Vaishali district are Vaishali Museum, and Bawan Pokhar Temple.

The economy of the West Champaran district sustains on both agriculture and industry. The sugar
industries dominate the district.

Indicus Analytics Pvt. Ltd. Page


nd 80
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Demography Table 4.1: Total Population and Decadal Growth Rate (2001)
Total Population (in 000') Population in 0-6 age group (in 000') Percentage Decadal
(2001) (2001) Growth Rate (1991-
District Person Male Female Person Male Female 2001)
Araria 2125 1109 1016 449 228 221 31.8
Aurangabad 2005 1036 969 379 196 183 30.2
Banka 1609 843 766 323 167 156 24.5
Begusarai 2343 1226 1117 464 239 225 29.1
Bhabhua 1285 674 611 258 133 125 30.6
Bhagalpur 2430 1294 1136 457 232 225 27.2
Bhojpur 2233 1175 1058 406 210 196 24.6
Buxar 1403 738 665 265 138 127 29.0
Darbhanga 3285 1717 1568 628 333 295 30.9
E.Champaran 3934 2072 1862 805 416 389 29.3
Gaya 3465 1789 1676 666 340 326 30.0
Gopalganj 2149 1072 1077 417 213 204 26.1
Jamui 1397 729 668 265 135 130 32.9
Jehanabad 1511 784 727 283 148 135 28.6
Katihar 2390 1245 1145 514 262 252 30.9
Khagaria 1277 676 601 270 139 131 29.3
Kishanganj 1294 667 627 280 144 136 31.5
Lakhisarai 801 417 384 160 82 78 23.9
Madhepura 1524 796 728 320 167 153 29.5
Madhubani 3571 1838 1733 700 361 339 26.1
Munger 1135 605 530 197 103 94 20.3
Muzaffarpur 3744 1942 1802 718 373 345 26.7
Nalanda 2368 1236 1132 445 229 216 18.6
Nawada 1809 928 881 347 176 171 33.1
Patna 4710 2515 2195 796 408 388 30.2
Purnea 2541 1326 1215 537 273 264 35.2
Rohtas 2449 1283 1166 463 238 225 27.7
Saharsa 1506 788 718 306 161 145 33.0
Samastipur 3413 1771 1642 696 358 338 25.6
Saran 3251 1654 1597 620 319 301 26.4
Sheikhpura 525 273 252 106 54 52 25.0
Sheohar 514 271 243 102 53 49 36.2
Sitamarhi 2670 1410 1260 539 284 255 32.6
Siwan 2709 1332 1377 532 276 256 24.8
Supaul 1745 909 836 365 190 175 30.0
Vaishali 2712 1412 1300 523 271 252 26.4
W.Champaran 3043 1601 1442 631 325 306 30.4
Bihar 82,879 43,154 39,725 16,235 8,376 7,859 28.4
Source: Census of India 2001 (Provisional)
Note: State total may not tally with aggregate of District's total due to rounding off of the figures.

Indicus Analytics Pvt. Ltd. Page


nd 81
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Environment: Table 4.2: District-wise Forest Cover in Bihar (Area in km2)
Total forest area
(very dense, Forest Cover as
Geographic moderately dense Percentage of
District Area and open forest) Geographic Area
Araria 2,830 22 0.8
Aurangabad 3,305 147 4.5
Banka 3,022 206 6.8
Begusarai 1,918 8 0.4
Bhabhua 3,381 1,106 32.7
Bhagalpur 2,567 27 1.1
Bhojpur 2,390 12 0.5
Buxar 1,708 10 0.6
Darbhanga 2,279 14 0.6
Gaya 4,976 576 11.6
Gopalganj 2,033 0 0.0
Jamui 3,107 641 20.6
Jehanabad 1,569 2 0.1
Katihar 3,057 3 0.1
Khagaria 1,486 5 0.3
Kishanganj 1,884 12 0.6
Lakhisarai 1,356 192 14.2
Madhepura 1,788 8 0.5
Madhubani 3,501 14 0.4
Munger 1,347 262 19.5
Muzaffarpur 3,172 5 0.2
Nalanda 2,367 55 2.3
Nawada 2,494 509 20.4
W. Champaran 5,228 893 17.1
Patna 3,202 25 0.8
E. Champaran 3,968 6 0.2
Purnia 3,229 8 0.3
Rohtas 3,832 751 19.6
Saharsa 1,680 7 0.4
Samastipur 2,904 13 0.5
Saran 2,641 9 0.3
Sheikhpura 612 1 0.2
Sheohar 572 1 0.2
Sitamarhi 2,071 4 0.2
Siwan 2,219 0 0.0
Supaul 2,432 13 0.5
Vaishali 2,036 12 0.6
Bihar 94,163 5,579 5.9
Source: Ministry of Environment and Forest, Govt. of India.

Indicus Analytics Pvt. Ltd. Page


nd 82
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Agriculture: Table 4.3: Gross Irrigated Area of Bihar (in hectares), 2004-2005

Total Gross Irrigated


District Area
Araria 104,069
Arwal 38,153
Aurangabad 151,790
Banka 116,417
Begusarai 86,502
Bhabua 153,534
Bhagalpur 75,252
Bhojpur 149,930
Buxar 127,382
Darbhanga 104,058
E.Champaran 164,293
Gaya 126,920
Gopalganj 109,435
Jahanabad 60,179
Jamui 29,218
Katihar 131,480
Khagaria 80,980
Kisanganj 49,786
Lakhisarai 51,384
Madhepura 129,863
Madhubani 140,290
Mujaffarpur 132,654
Munger 39,983
Nalanda 184,479
Nawadah 86,743
Patna 159,280
Pumea 161,370
Rohtas 305,668
Saharsa 95,645
Samastipur 113,436
Saran 119,652
Sheikhpura 22,753
Sheohar 15,022
Sitamarhi 57,345
Siwan 111,333
Supaul 138,730
Vaishali 87,167
W.Champaran 184,965
Bihar 4,197,140
Source: The Fertiliser Association of India.

Indicus Analytics Pvt. Ltd. Page


nd 83
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 4.4: District-wise Area and Production of Total Fruits in Bihar (2005-2006)

Production (In
District Area (in hectare) Tonne)
Araria 3,420 38,816
Arwal 885 8,658
Aurangabad 3,400 29,008
Banka 8,294 79,285
Begusarai 7,502 85,925
Bhagalpur 11,537 132,271
Bhojpur 8,164 72,857
Buxar 5,769 49,200
Darbhanga 18,383 207,150
E.Champaran 16,350 144,059
Gaya 3,285 27,069
Gopalganj 6,581 59,993
Jamui 2,156 20,833
Jehanabad 1,167 11,401
Katihar 7,379 87,204
Kaumur 5,527 39,749
Khagaria 3,905 50,039
Kisanganj 5,209 81,869
Lakhisarai 952 9,972
Madhepura 6,854 93,557
Madhubani 10,400 115,619
Munger 2,399 25,719
Muzaffarpur 25,253 346,009
Nalanda 6,094 54,429
Nawadah 3,100 27,970
Patna 7,587 71,084
Purnea 9,290 131,586
Rohtas 10,010 73,225
Saharsa 8,356 108,032
Samastipur 15,968 196,207
Saran 9,292 84,890
Sheikhpura 1,429 13,953
Sheohar 4,703 44,749
Sitamarhi 9,598 97,098
Siwan 6,541 62,620
Supaul 3,705 44,934
Vaishali 17,486 234,250
W.Champaran 13,662 130,888
Bihar 291,592 3,192,177
Source : The Fertilizer Association of India.

Indicus Analytics Pvt. Ltd. Page


nd 84
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Banking Sector: Table 4.5: Number of Reporting Offices, Aggregate Deposits and Gross Bank
Credit (Quarterly) of all Banks in Bihar (June, 2009)

District No. of Offices Deposits (Rs. Crore) Credit (Rs. Crore)


Araria 99 1,174 497
Arwal 39 469 118
Aurangabad 124 1,887 529
Banka 65 820 289
Begusarai 133 2,170 711
Bhagalpur 146 2,911 831
Bhojpur 168 2,894 671
Buxar 104 1,541 469
Darbhanga 242 3,245 746
Gaya 237 3,832 1,078
Gopalganj 159 2,334 658
Jamui 82 1,031 270
Jehanabad 53 959 242
Kaimur 89 985 500
Katihar 125 1,517 718
Khagaria 77 851 283
Kishanganj 72 710 381
Lakhisarai 54 856 196
Madhepura 79 1,267 387
Madhubani 241 2,649 684
Munger 82 1,836 371
Muzaffarpur 273 4,528 1,886
Nalanda 178 2,511 622
Nawada 108 1,240 372
W. Champaran 187 1,974 917
Patna 441 27,234 5,995
E. Champaran 229 2,812 1,104
Purnia 132 1,804 892
Rohtas 160 2,385 961
Saharsa 82 1,336 403
Samastipur 212 2,714 1,015
Saran 210 3,504 927
Sheikhpura 35 509 141
Sheohar 28 304 87
Sitamarhi 144 1,652 639
Siwan 208 3,546 709
Supaul 93 1,285 362
Vaishali 174 2,587 754
Bihar 5,364 97,863 28,416
Source: Reserve Bank of India
Note: All Regional Rural Banks, Scheduled Commercial Banks and Other Scheduled Commercial Banks included

Indicus Analytics Pvt. Ltd. Page


nd 85
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Crim: Table 4.6: District-wise Incidence of Cognizable Crimes (IPC) in Bihar (2007)
Attempt to Kidnapping &
Districts Murder Commit Murder Abduction Dacoity
Araria 48 185 27 41
Arwal 19 12 4 5
Aurangabad 68 12 35 29
Bagaha 37 8 58 4
Banka 56 12 34 24
Begusarai 100 145 85 8
Bettiah 61 8 17 12
Bhabhua 50 28 25 7
Bhagalpur 92 85 76 15
Bhojpur 112 133 57 11
Buxar 36 75 32 11
Darbhanga 72 109 91 10
Gaya 157 170 59 48
Gopalganj 48 79 21 11
Jamui 51 30 31 20
Jehanabad 40 16 27 11
Katihar 77 50 142 17
Khagaria 48 70 44 8
Kishanganj 23 12 65 7
Lakhisarai 32 21 36 5
Madhepura 65 18 36 12
Madhubani 76 176 71 17
Motihari 111 88 104 25
Munger 76 63 52 5
Muzaffarpur 155 26 173 35
Nalanda 102 62 105 18
Naugachia 30 10 14 2
Nawadah 75 103 29 7
Patna 332 125 321 68
Purnea 101 79 143 31
Rohtas 89 207 29 11
Saharsa 50 123 35 9
Samastipur 78 205 98 14
Saran 112 345 41 39
Sheikhpura 25 13 11 6
Sheohar 25 24 8 1
Sitamarhi 55 14 52 27
Siwan 80 61 75 24
Supaul 44 73 34 11
Vaishali 120 35 131 9
Bihar 3,034 3,113 2,530 686
Source : Ministry of Home Affairs, Govt. of India.

Indicus Analytics Pvt. Ltd. Page


nd 86
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Infrastructure: Table 4.7: District-wise Number of Gram Panchayat Villages with Post
Offices in Bihar (March, 2005)
District No. of GP Village with Post Office (PO)
Araria 200
Arbal 77
Aurangabad 185
Banka 131
Begusarai 207
Bettiah (W. Champ.) 221
Bhagalpur 194
Bhojpur (Arrah) 208
Buxar 119
Darbhanga 266
E. Champ (Motihari) 365
Gaya 197
Gopalganj 160
Jahanabad 98
Jamui 104
Kaimur (Bhabhua) 95
Katihar 195
Khagaria 109
Kishanganj 111
Lakhisarai 106
Madhepura 190
Madhubani 280
Munger 101
Muzaffarpur 291
Nalanda (Bih. Sharif) 222
Nawada 100
Patna 199
Purnea 231
Rohtas (Sasaram) 261
Saharsa 193
Samastipur 253
Saran (Chapra) 257
Sheikhpura 98
Sheohar 106
Sitamahri 180
Siwan 231
Supaul 124
Vaishali ( Hajipur) 187
Bihar 6,852
Source : Lok Sabha Unstarred Question No. 5803, dated on 04.05.2005.

Indicus Analytics Pvt. Ltd. Page


nd 87
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Employment: Table 4.8: Work Participation Rate
District 2001-02 2008-09
Araria 39.5 42.5
Aurangabad 33.3 35.9
Banka 39.6 41.9
Begusarai 31.8 34.1
Bhagalpur 35.3 38.4
Bhojpur 29.1 31.4
Buxar 29.1 29.9
Darbhanga 31.2 32.4
Gaya 36.8 39.4
Gopalganj 29.8 32.0
Jamui 42.7 47.0
Jehanabad 38.4 43.4
Kaimur (Bhabua) 34.4 36.1
Katihar 37.5 40.1
Khagaria 36.5 39.0
Kishanganj 32.2 31.6
Lakhisarai 36.5 38.7
Madhepura 44.8 49.3
Madhubani 34.3 35.6
Munger 29.1 29.1
Muzaffarpur 30.4 31.4
Nalanda 38.1 41.5
Nawada 37.3 40.9
Pashchim Champaran 37.9 39.9
Patna 30.2 32.1
Purba Champaran 32.7 33.9
Purnia 37.8 38.7
Rohtas 30.4 31.8
Saharsa 39.1 41.5
Samastipur 31.6 33.9
Saran 26.5 28.0
Sheikhpura 37.0 38.9
Sheohar 31.2 32.1
Sitamarhi 31.9 33.3
Siwan 26.9 28.9
Supaul 42.0 44.0
Vaishali 28.8 31.0
Source: Census of India (2001), Indian Development Scape 2008, Indicus Analytics (2008)
Note: Work Participation Rate is defined as percentage of total workers (main+marginal) to the total population.

Indicus Analytics Pvt. Ltd. Page


nd 88
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 4.9: Rural BPL Population, Job Cards Issued, Employment Provided, and Funds
Released under NREGA in selected districts in Bihar (As on 30.6.2006)

No. of Persons
Provided Funds Released
District Rural BPL Persons Job Card Issued Employment (Rs. in Lakh)
Araria 882,586 21,500 15,082 1,162
Aurangabad 813,404 49,616 31,018 2,000
Bhabhua
(Kaimur) 550,679 45,259 6,556 1,595
Bhojpur 851,057 101,953 21,851 1,817
Darbhanga 1,337,257 51,775 20,500 2,000
Gaya 1,324,544 25,528 14,048 2,000
Jamui 573,374 32,226 17,242 1,891
Jehanabad 619,984 15,743 10,200 2,000
Katihar 961,880 87,655 81,545 2,000
Kishanganj 516,120 52,719 48,015 1,036
Lakhisarai 302,829 9,492 8,788 1,147
Madhubani 1,526,688 44,773 41,148 2,000
Monghyr 362,778 90,550 41,753 2,000
Muzaffarpur 1,504,235 75,546 27,161 2,000
Nalanda 892,594 15,984 4,621 2,000
Nawadah 740,146 23,343 3,800 1,692
Patna 1,214,231 52,611 7,502 2,000
Purnea 1,027,250 61,815 54,450 996
Rohtas 940,124 63,170 3,177 1,992
Samastipur 1,457,460 76,311 30,269 2,000
Sheohar 218,382 4,039 2,394 1,188
Supaul 734,129 10,329 9,913 1,987
Vaishali 1,118,979 59,585 4,248 2,000
Total 20,470,711 1,071,522 505,281 40,503
Source: Compiled from the statistics released by : Rajya Sabha Starred Question No. 51, dated 26.07.2006.
Note: NREGA - National Rural Employment Guarantee Act., BPL - Below Poverty Line.

Indicus Analytics Pvt. Ltd. Page


nd 89
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Educatio: Table 4.10: Total Literacy Rate

District 2001-02 2008-09


Araria 35.0 40.5
Aurangabad 57.0 63.8
Banka 42.7 47.8
Begusarai 48.0 54.6
Bhagalpur 49.5 54.3
Bhojpur 59.0 65.2
Buxar 56.8 63.3
Darbhanga 44.3 50.1
Gaya 50.4 56.3
Gopalganj 47.5 54.8
Jamui 42.4 48.0
Jehanabad 55.3 60.9
Kaimur (Bhabua) 55.1 63.6
Katihar 35.1 39.2
Khagaria 41.3 46.9
Kishanganj 31.1 36.7
Lakhisarai 48.0 53.3
Madhepura 36.1 41.4
Madhubani 42.0 47.5
Munger 59.5 63.9
Muzaffarpur 48.0 55.0
Nalanda 53.2 57.1
Nawada 46.8 51.7
Pashchim Champaran 38.9 45.5
Patna 62.9 66.9
Purba Champaran 37.5 43.6
Purnia 35.1 39.4
Rohtas 61.3 68.3
Saharsa 39.1 44.8
Samastipur 45.1 50.5
Saran 51.8 57.8
Sheikhpura 48.6 53.4
Sheohar 35.3 41.0
Sitamarhi 38.5 44.7
Siwan 51.6 58.8
Supaul 37.3 43.0
Vaishali 50.5 56.4
Source: Census of India (2001), Indian Development Scape 2008, Indicus Analytics (2008)

Note: Literacy rate of population is defined as the percentage of literates to the total population aged 7 years and above.

Indicus Analytics Pvt. Ltd. Page


nd 90
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Health:
Table 4.11: Infant Mortality Rate

District 2001-02 2008-09


Araria 65 64
Aurangabad 63 60
Banka 56 48
Begusarai 58 49
Bhagalpur 52 42
Bhojpur 55 54
Buxar 53 50
Darbhanga 60 52
Gaya 59 50
Gopalganj 46 45
Jamui 58 51
Jehanabad 60 54
Kaimur (Bhabua) 68 68
Katihar 71 61
Khagaria 52 46
Kishanganj 77 66
Lakhisarai 60 54
Madhepura 60 48
Madhubani 59 51
Munger 55 47
Muzaffarpur 64 59
Nalanda 62 56
Nawada 59 51
Pashchim Champaran 57 48
Patna 50 46
Purba Champaran 59 55
Purnia 63 55
Rohtas 55 47
Saharsa 57 46
Samastipur 54 45
Saran 56 46
Sheikhpura 62 58
Sheohar 72 59
Sitamarhi 74 62
Siwan 48 39
Supaul 57 46
Vaishali 48 46
Source:Census Estimates by Population Foundation of India (2001), Indian Development Scape 2008, Indicus Analytics (2008)

Note: IMR - The number of infant deaths per thousand live births.

Indicus Analytics Pvt. Ltd. Page


nd 91
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Table 4.12: District-wise Availability of Health Centres in Bihar (As on March, 2007)

Number of
Number of Community
Number of Sub Primary Health Health Centres
District Centres (SCs) Centres (PHCs) (CHCs)
Araria 200 39 3
Arwal 46 26 0
Aurangabad 207 69 3
Banka 227 34 3
Begusarai 288 42 2
Bhagalpur 280 57 2
Bhojpur 331 37 2
Buxar 162 25 0
Darbhanga 261 64 2
Gaya 439 68 2
Gopalganj 186 32 3
Jamui 166 31 3
Jehanabad 81 29 2
Kaimur (Bhabua) 107 26 2
Katihar 257 43 3
Khagaria 151 24 1
Kishanganj 136 16 2
Lakhisarai 102 17 1
Madhepura 115 30 1
Madhubani 430 95 2
Munger 123 19 1
Muzaffarpur 473 61 1
Nalanda 302 48 3
Nawada 129 37 2
Pashchim Champaran 389 41 2
Patna 418 86 4
Purba Champaran 315 66 3
Purnia 278 45 2
Rohtas 186 53 1
Saharsa 152 40 0
Samastipur 354 73 1
Saran 413 60 3
Sheikhpura 74 21 1
Sheohar 34 10 1
Sitamarhi 213 51 1
Siwan 370 49 2
Supaul 178 37 1
Vaishali 336 47 2
Bihar 8909 1648 70
Source: Ministry of Health & Family Welfare, Govt. of India.

Indicus Analytics Pvt. Ltd. Page


nd 92
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Bibliography
Central Statistical Organization (CSO).
Economic Survey, 2009-10.
Eleventh Finance Commission Report, 2000.
Human Development Report 2001, Planning Commission.
Srivastava Ravi (2003), Professor at Department of Economics, JNU, led the study team in
India. Understanding Poverty and Vulnerability in India’s Uttar Pradesh and Bihar: A Q-
squared Approach, Barbara Parker and Valerie Kozel, Q-Squared Working Paper No. 9
October 2005.
Ministry of Commerce & Industry, Govt. of India.
Market Skyline of India, 2008, Indicus Analytics.
India Today, Yearender 2009, State Scan - Patna: P For Progress, Amitabh
Srivastava.
DLHS (District level Household Survey) I, II and III.
Reserve Bank of India, Respective Years.
Budget Documents of the State Governments.
Crime in India, National Crime Record Bureau, Respective Years.
Ministry of Rural Development, PMGSY (Pradhan Mantri Gram Sadak Yojana).
‘Bihar, A Growth Story’, Times Of India, January 10, 2010.
Cement Manufacturers' Association.
Selected Educational Statistics (SES), respective years.
Sample Registration System (SRS) Bulletin.
Registrar General of India, Directorate General of Health Services, Ministry of Health &
Family Welfare, Govt. of India.
Ministry of Health and Family Welfare, Govt. of India.
National Health Profile (NHP) 2008.

Indicus Analytics Pvt. Ltd. Page


nd 93
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net
Bulletin on Rural Health Statistics in India 2008. Infrastructure Division, Ministry of Health
and Family Welfare, Government of India (MOHFW/GOI).
Ministry of Tourism, Govt. of India.
Ministry of Agriculture, Govt. of India.
Bihar, Towards a Development Strategy, World Bank,
http://siteresources.worldbank.org/INTINDIA/Resources/Bihar_report_final_June2005.pdf.
Mohan Guruswamy, Ramnis Attar Baitha and Jeevan Prakash Mohanty, “Centrally Planned
Inequality, the Tale of Two States – Punjab and Bihar” published by Centre for Policy
Alternatives, New Delhi, in 2004.
Mohan Guruswamy and Jeevan Prakash Mohanty, “De-urbanisation of Bihar,” published by
Centre for Policy Alternatives, New Delhi, in 2004.
http://www.indianetzone.com/9/districts_bihar.htm, Accessed on 17th May 2010
Census of India 2001.
Ministry of Environment and Forest, Govt. of India.
Fertiliser Association of India.
Ministry of Home Affairs, Govt. of India.
Indian Development Scape 2008, Indicus Analytics (2008).
Reproductive and Child Health (RCH) Facility Survey 2000

Indicus Analytics Pvt. Ltd. Page


nd 94
2 Floor, Nehru House, 4 BSZ Marg, New Delhi – 110002
Email: mail@indicus.net