A Silent Breakthrough

In the past decade, the state has become an exemplar of fiscal prudence and targeted spending on infrastructure and growth. But it needs to industrialise rapidly and improve agricultural productivity to check migration out of the state and alleviate poverty.

- Ajit Kumar Jha

Etymologically derived from the word ‘vihara’— the serene and tranquil Buddhist monasteries—modern Bihar has, in a cruel irony, been associated with violence, lawlessness, political anarchy and economic stagnation. The stereotype is so tenaciously embedded in the public imagination that the very mention of Bihar brings to mind images of a political ‘jungle raj’ and an economic BIMAROU (the damning acronym for Bihar, Madhya Pradesh, Rajasthan, Odisha and Uttar Pradesh, referring to their poor economic standing).

The true picture of Bihar is quite the reverse. There was indeed a long period of decline after Independence and, in the not so distant past, a 15-year period of slump between 1990 and 2005. But from 2004-05 to 2014-15, Bihar emerged as the fastest growing state in India, clocking over 10 per cent annual growth for the past decade and, in the process, more than doubling its economy. According to the Bihar Economic Survey, in 2016-17, the last year for which data is available, the growth rate was 10.3 per cent, while the national average was 7 per cent. In 2015-16, Bihar’s growth rate was 7.5 per cent.

The state’s impressive growth can be attributed partly to the low base of the stagnating decade and partly the positive effect of a fairly rapid period of global growth (2003 to 2012). What’s remarkable is the relative sustainability of Bihar’s double-digit growth for a decade even as its neighbour Uttar Pradesh gasped along at 6.6 per cent, with a comparatively low base during the same period. Odisha is a similar story of relatively slower growth in the same period. This is a state with a 560 kilometre coastline—a great location trade-wise. Bihar grew faster despite being landlocked and less exposed to the global economy, while Odisha’s growth was modest, by comparison. Also, Bihar’s growth is way more robust than of the other BIMAROU states.