Monday, 4 January 2010

Bihar, the star performer !

In India, regional disparities in growth and poverty alleviation are well known. In general, the more western and southern a state is, it is much better off. And the more eastern and northern the state is, it is in doldrums. So says conventional wisdom. Well, not any longer.

The economic growth of states over the last five years has just been published, and has been seized by the media and reported widely. So pardon me, if you have read this before. But its such a compelling story that it needs telling.

There were two states that grew by 11% , each year, over the last five years. One of them is no surprise, Gujarat. But the other will take your breath away. Its Bihar. Bihar was, jointly with Gujarat, the fastest growing state in India over the last five years.

Pause for a moment and reflect on this number. Eleven percent per annum GDP growth. It’s a stunning performance by any standard, anywhere in the world. Breathtaking. And Bihar is not the lone surprise. Uttaranchal & Orissa grew by 9% each. Jharkhand grew by 8.5%. All at, or above the national average of 8.5%. Even UP grew by 6.3%.

This has some important lessons and inferences. Firstly the myth that growth in India is not inclusive is rubbish. The so called poorer states have all grown handsomely. Growth in any form will trickle down to everybody. It’s the best remedy for poverty. Sure, there are large inequalities in each state and the misery amongst many in Bihar still continues. But any day, I would rather have growth with so called inequality, rather than no growth at all. If ever there was compelling evidence that economic growth must be pursued with religious fervour, this is it.

Secondly, there is definitely a link between good governance and growth. Narendra Modi, Nitish Kumar and Naveen Patnaik are some of the better governing state leaders, No wonder, their states occupy some of the top positions in the growth chart.

Thirdly you can do good governance and win elections. Modi and Patnaik have been reelected and Nitish Kumar carried the Lok Sabha elections on his own. It’s a fallacy that in a democracy you can’t win elections by good governance. The electorate may be gullible, but not downright stupid. People do recognize the value that growth brings and are willing to reward the leaders by reelecting them.

This is cause for celebration. Don’t throw mud at the statistics saying they are inaccurate – Probably they are in absolute terms, but trendwise, not far from the truth. Even though “India Shining” can lose elections, India is shining. And India is shining across the country – not only in Gurgaon or Bangalore. Its easy to moan about poverty and claim that all the growth is elitist, doesn’t benefit the poor and the usual claptrap. I repeat ad nauseum in this blog, the only way to alleviate poverty is through economic growth.

Tip your hat to Bihar, the economic tiger.


Srivats said...

wah the fervent by which you have written this itself proves the love you have for the country and in its growth.

Its so heartwarming to know that such states have grown in the last 5 years. I really wonder how much bangalore and chennai did, as you said good governance is the key

gils said...

u knw..morning wen i saw tht news..chkd the date it april first edition printed a tad early!!! but how can a state grow at dbl digits without any signs of infra dev. or FDI flowing into some project..i cud think of only these two options..u must be knowing more..but past 5 news on bihar which cud justify these numbers..and i shd say same for gujrat news on papers..but everyone knows gujrat is growing...maybe due to all the patels who are abroad and pumping money there..still our newspapers conviniently blacks these out. long Live congress :)

Sandhya Sriram said...

I have run into a huge indigestion compliant and hence finding it difficult to comment on this post!!

Narendra Modi and good governance, somehow difficult to gulp down. but thats what the number says.

But as you said, there is no second word that only economic growth can alleviate property and so even if the numbers are biassed, but every form of growth is welcome

J said...

Sounds too good to be true. I would be really happy if it is indeed true even in a relative sense as you suggest because lop sided growth in any country is a recipe for disaster. But what is the source of this growth? It seems like agriculture hasnt done that well so which sectors have pushed the growth numbers? I have to be a little skeptical when it comes to Bihar but I do seriously hope that all the doubting thomases are indeed wrong.

VA said...

Well, well... this is indeed surprising (looking at the numbers) but not breath-taking (as it seems to me). I remember my last trip to Patna almost 18 months back. When I was on my way to the hotel from the airport, first thing that the cab driver told us was "Nitish ke raaj me Bihar bahut tarakki kiya hai"... and people sounded very upbeat about Nitish's leadership and performance. And yes, he has been doing a lot of things in Bihar silently.

I was moved by the tone of this post, just fabulous, one that is straight from the heart! :-) I completely agree with the inferences and lessons that you have suggested. Electorate has shown a great deal of maturity while casting their votes. Good governance has paid off for the likes of Narendra Modi, Nitish Kumar and even Sheila Dixit for that matter (I am not sure how Delhi has fared in this list). As for Modi, one may have qualified opinion on his politial ideology but the fact is that his governance has made the difference for Gujarat. Though there may not be headlines on the sources of such stupendous growth, I think that better law and order situation, organized and inclusive business structures, reduction in corruption levels, good reform measures etc. have done it for poorer states. What is your take?

Deepa said...

Well speaking of Gujarat and Bihar in the same breath is just not going down my throat. But even if (the word)'Statistics' is living up to its reputation, it would be a different feeling to see Bihar counted as one of the most prosperous states in India. I don't know about the numbers, but if they are marching ahead, I am cheering for them!

Ramesh said...

@Sri - I think Karnataka and TN have been around the average. Neither have been blessed with good governance unfortunately

@gils - On an absolute level Bihar is still very poor, but growth is good which is an indicator that they are making progress. Growth is slow, so not headline worthy, but if you visit these places after a while, you see the difference.

@Sandhya - Yes, I know Modi provokes very sharp feelings. I make no comment on his politics as VA says, but in terms of economic governance, one has to give him high marks. On many fields, Gujarat has made great progress in the last few years. Its a philosphical point to ruminate on - which is better; a thug who does the right things or a saint who does nothing ?

@J - Absolute levels still abysmal in Bihar (we see only the absolute), but growth shows they are improving. Agriculture has performed well in the last 5 years. Infrastructure investments have actually been huge - the National Highways project, for eg. Small industry has also grown rapidly in Bihar. And corruption has been reduced which makes whatever investment being made more effective. Lots of good things are happening in that state.

@VA - Completely agree with you. Speak to any visitor to Gujarat or Bihar and this is what you hear.

@Deepa - For sure Gujarat and Bihar are not on the same page in absolute terms. But growth is an indicator of how much improvement is taking place. Bihar starts from a much lower base. But 15 years like this and Bihar can rub shoulders with anybody. China is the best proof that a piss poor place in 20 years can be transformed.

Priya Ganesh said...

err...Hmm..yes!! looks like we have to agree. Seriously!

Ramesh said...

@Priya - Can't argue with statistics (as long as they are not damn lies !)

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