NEW DELHI: Long associated with endemic poverty, corruption and bad governance Bihar, India’s second most populous state, is usually in the news for all the wrong reasons, until this week. Now, however, the Indian government’s Central Statistical Organisation (CSO) data have revealed that Bihar’s economy is growing faster than that of the Indian economy, prompting the state’s deputy CM to call it the country’s “new miracle economy.”
With an annual growth rate over 11 per cent, Bihar was barely held at second place by ‘developed’ Gujarat which, according to CSO figures, grew at 11.05 per cent over the past year to be the strongest economic performer. The Indian national average growth for the same period is 8.49 per cent.
With Bihar breaking out of the problematic ‘BIMARU’ mould (a generic term for Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, four states which were seen as pulling down the Indian economy because of their slow rates of growth), the stage is set for the Indian economy to be propelled into the double digit growth era, a senior official said, and “goodbye to recession.”
For Bihar’s chief minister Nitish Kumar, who faces elections to the state assembly later this year, the figures have come as a big boost to his electoral prospects. Widely credited with quiet, efficient governance (unlike his predecessor Lalu Prasad Yadav) Kumar, though a member of the opposition NDA, was singled out for praise from Rahul Gandhi, the Congress Party leader and scion of the country’s leading political family.
Kumar has used the doctrine of “inclusive growth” to promote the state’s economic potential. The phrase was a dig at his predecessor who used his 15-year tenure at Bihar’s helm to largely promote divisive politics based on caste.
The growth rate is even more significant as it comes after a negative 5.15 per cent growth in 2003-04, shortly after which Kumar took charge. Sweeping economic reforms undertaken by his government and increased agricultural production have enabled the state to achieve a growth rate of 11.03 per cent during the period between 2004-05 and 2008-09 (in 2008-2009, Bihar grew at 11.44 per cent).
Nobel laureate Amartya Sen and Planning Commission deputy chairman, Montek Singh Ahluwalia, who recently visited Bihar, have lauded Bihar’s growth saying it had recorded a “desired growth” in the past three years.
Last July, the World Bank, which uses CSO data, ranked Bihar 14th — ahead of Chennai, Kochi and Kolkata — for being the “easiest place to start business” in India in its report “Doing Business in India 2009”. The report presents indicators on business regulations, compared across 181 economies.
Among the 18 states and Union Territories of which data is available, Bihar recorded the highest State Gross Domestic Product (SGDP) of almost 11.44 per cent, in a year when the global financial meltdown pulled down country’s economic growth rate to 6.7 per cent from 9 per cent.