In Alaskonomics and Bihar – Part I, I raised the point about distribution of taxes and income amongst various states in India.
This matter is at the heart of several controversies – the most recent being Narendra Modi’s demand that revenues from Gujarat should largely be spent in/on Gujarat. It also has a bearing on issues such as the anti-North-Indians movement in Maharashtra. But most importantly, this analysis is key to understanding and dealing with under-development in Bihar, Orissa, Jharkhand, AP and MP…all of them states having large swathes of land where the government has no role and no influence, forget authority.
In that sense, this discussion not only influences national economic development but also has ramifications for internal security (with regards the influence of Maoists) as well as the evolution of India’s federal structure (and the relationship between states and centre).
However, my search for data to support this analysis was not very fruitful…I did unearth some very interesting nuggets but there are still large gaps without which it is difficult to formulate any hypothesis on this sensitive subject. As the title of this post suggests, a lot of these “nuggets” had to do with Bihar and how it compares vis-à-vis other states.
The first excerpt is from an article provocatively titled, “The economic strangulation of Bihar” (originally published in 2004). In the article, Mohan Guruswamy and Abhishek Kaul, the two authors contend that: Bihar is being systematically denied even its rightful due from the Centre, let alone the additional assistance its economic and social condition deserves.
The picture they paint of Bihar is not pretty.
- Bihar’s poverty levels are amongst the highest in the country
- Its annual real per capita income is about a third of the national average of Rs 11, 625
- Bihar is also the only State where the majority of the population — 52.47 per cent — is illiterate
- Bihar’s per capita spending on roads is Rs 44.60, just 38 per cent of the national average of Rs 117.80
- In terms of per capita expenditure on medical and public health, Bihar falls well behind with Rs 86.20, against the national average of Rs 157.20
Bihar is not only the worst off of all Indian States, but the gap between it and the rest is also widening. As opposed to an All-India per capita developmental expenditure (from 2000 to 2002) of Rs 6748.50, Bihar’s was less than half at Rs 3,206.00. This trend continued in the later years. In 2003-04, per capita spending on developmental heads in Bihar (Rs 1,075) was one half of the all-state average (Rs 2,035) [ link ].
From an article by Mohan Guruswamy in The Hindu, I found out that:
- In 1999-00 Bihar is (was) the second poorest state in the country- behind Orissa- with 42.60% of its population living below the poverty line
- The majority (68.8% in Bihar and 68.3% in UP) of land-holdings are marginal (less than one hectare) or small (one to two hectares). This small size of the average holding militates against higher productivity. This also means that much of this farming is subsistence farming resulting in very little saleable surplus
- As compared to the per capita plan allocations of Rs. 9,289.10 for Gujarat and Rs. 8,260.00 for Karnataka, Bihar and UP received just Rs. 2,533.80 and Rs. 3,595.70 respectively (under the Tenth Plan). Further, “….the increase in the state outlays from the Ninth Plan to the Tenth Plan has been the lowest for Bihar (11.9%), while states like AP (28.8%), Gujarat (16.2%), Karnataka (109.6%) and Orissa (58.2%) are quite clearly much more favored than Bihar…”
To put all this in perspective, the population of Bihar at around 85million (today) is second only to UP (at ~170m and Maharashtra (at ~ 100m) [ 2001 Census figures here ]
But as many of you would know, Bihar was not always like that…. In ancient times, Bihar (Magadha) was the birthplace of two major empires (the Mauryan and the Gupta)…and the cradle of several advances in science, mathematics, religion, astronomy and philosophy. It is believed that it was during the Mauryan empire (~300 B.C.) that the Indian subcontinet was united under a single government for the first time.
But that was then…Today, its people are amongst the most impoverished in the country…and in spite of being inheritors of a great heritage and blessed with a land rich with resources, they continue to struggle and live a life of misery, thanks not just to its famed leader but almost every politician who has ever ruled the state.
To get a sense of the depths of inefficiency in the public administration system in Bihar, pl. read these excerpts from an article penned more than a decade ago titled…” Bihar withers away” by K P Joseph.
“……Some of (Bihar’s) financial scandals appear like stories out of Ripley’s Believe It Or Not. Here are a few examples…
During the last five years, the government spent Rs 77 crore on staff salaries to collect irrigation dues of Rs 39 crore.
During the same period, the Water Resources Department spent Rs 900 crore on salaries to execute work worth Rs 280 crore.
In the Patna Medical College Hospital, eight out of 10 lifts and three out of five ambulances have not been working for years.”
I doubt that much has changed since then (1997).
The fodder scam is of course too well known to be repeated.
So are there no bright spots? Actually, there are:
- Bihar’s per capita spending on education, at Rs 484.10, is as good as the best. AP spends Rs 493.90 and the national average is Rs 586.8.
- Its infant mortality rate is 62 per 1,000, which is below the national average of 66 per 1,000. But what is interesting is that this is better than not just UP (83) and Orissa (91), but better even than States such as AP and Haryana (both 66)
- Also (importantly), Bihar has India’s largest concentration in the below 25 years age cohort, with 58 per cent in this category
But all these nice figures are easily overshadowed by the enormity of disparity between Bihar and other states and the gross inefficiency & waste in public administration and poor governance that has characterised the state.
Does this help you understand why you now see Bihari migrant labourers in practically every corner of India (even in Kashmir where you hardly find any Valley pandits now)?
In my next post on this subject, I will look at the contribution to national GDP made by various states and some interesting statistics on per capita contribution and tax revenues.
Additional Reference: http://mospi.nic.in/mospi_cso_rept_pubn.htm