Progressive Bihar - Finally the sleeping giant is waking up

Progressive Bihar - Finally the sleeping giant is waking up
Progressive Bihar - Come support it's growth path.

Sunday, March 7, 2010

Booming Bihar: Fact or Fiction? - Article by R. Nagaraj

Interesting! The recent growth stories of Bihar have prompted many eminent economists, sociologists and professors to analyse and present their views of this sudden hype about Bihar.

One such article has been written by Mr. R. Nagaraj ( from the Indira Gandhi Institute of Development Research, Mumbai. He was assisted by Mr. Andaleeb Rahman (, a research student at the same institute.

Mr. Nagaraj has taken a critical view of the recent growth story, and is skeptical of the changes that have been talked about in the media recently. He has highlighted that the GDP growth in Bihar has primarily resulted from government spending on road construction which to quite an extent is true as construction accounted for over 35% of Bihar's GDP growth in the last 5 years. He is  however skeptical of the sustenance of such growth. He has also highlighted that the primary sector of agriculture has hardly shown any growth and so is the case of Industrialization.

I think these are valid points raised by Mr. Nagarajan when he is highlighting that government spending on construction without growth in agriculture and industries, cannot sustain an increasing GDP and hence growth will not be sustainable. While Mr. Nitish Kumar is trying to attract investments into the state and we have seen projects being approved but not yet implemented due to various reasons, but Mr. Nagaraj's article is a good highlighter to Mr. Nitish Kumar and team to take note.

Nitish Kumar ji, If you did not know about the above already, you know it now. Hopefully you will strengthen the resolve and overcome these challenges by being able to attract more investments and public/private spending in the state.

That said, there are various sections of Mr. Nagaraj's article and guest speak which I do not concur with. Some of my reasons for not agreeing are as follows
  1. Mr. Nagaraj has for the most part not substantiated his writing by relevant references to the sources of the  data he has used, which would have done justice to his statements.
  2. The data released in the latest economic of Bihar 2009-10 (Bihar Economic Survey 2009-10) states that besides construction, Communications accounted for 17.68% of Bihar's GDP growth in last 5 years. Similarly trade, hotel and restaurants accounted for 17.71% of Bihar's GDP. However Mr. Nagaraj doesn't seem to address this in his article.
  3. It appeared to me that Mr. Nagaraj has not been tracking the developments in Bihar and was inspired to make his analysis/study after the media hype created on the Bihar growth story in the last 2 months.
Some interesting happenings in Bihar which has been ignored by Mr. Nagaraj when writing this article are
  1. Tourism which has picked up in Bihar. The number of tourists visiting Bihar has multiplied 5 times the as compared to the number of tourists 5 years back (Tourism picking up in Bihar). Why has tourism picked up? What has been done to improve tourism?
  2. The increased sales of vehicles in Bihar: Motor vehicle sales in Bihar has grown 4 times in the last 4 years (Signs of progress). What has prompted people to buy more vehicles?
  3. Growing air traffic from Patna (Flights of prosperity). Why are more flights landing into Bihar? Why are chartered plane operators starting operations in Bihar?
  4. New teacher appointments : More than 2 lakh new teachers were appointed. Similarly investments are being made in improving school infrastructure.
  5. Public health services improving: More than 80,000  deliveries per month happen in PHC as compared to about 5000 about 5 years back. This information is available in the Progress report 2008.
  6. Obviously Mr. Nagaraj has apparently not read the Progress Report's released by the Bihar government which would have given a better view of why everyone is euphoric about the changes being brought into Bihar. (Progress Report 2008 and Progress Report 2009)
  7. A compilation of various changes in Bihar are also listed in this article : Bihar Growth Statistics and Image Management which highlights other actions and results.
  8. Some more information worth nothing in the Times of India article Bihar - A Growth Story - TOI - Mumbai Edition which are possibly ingored when this article was written.
I think Mr. Nagaraj's article in all earnest has highlighted some of the challenges that will come in the way of Bihar's growth if requisite action is not taken. But his article has also taken a very myopic view of the situation in Bihar and I dont think it does justice to the efforts being put in by various people in turning around a state which till sometime back was considered a Bimaru state, a failed state and a state that no one talked about.

Maybe I am wrong and I have missed out important aspects. I would love it if Mr. Nagaraj would provide his view about my article and substantiate his statement. Hence I am marking a copy of this article to Mr. Nagaraj and look forward to his response.

Mr. Nagaraj's article can be read at Booming Bihar: Fact or Fiction? and his guest speak can be read at R Nagaraj: Demystifying Bihar's Growth

- Prashant


  1. From:
    Date: Sun, Mar 7, 2010 at 9:20 PM
    Subject: Re: Booming Bihar: Fact or Fiction? - ...
    To: Prashant

    Dear Mr. Prashant,

    Thank you very much for your comments and questions. Let me reiterate the following:

    1. My comment on Bihar was restricted to the hype of 11% growth, which seems suspect - given the fragility of the official statistics. I am sure you would agree that any rigorous analysis of social and economic issues should start with careful examination of facts.
    2. The supposed growth is not broad based, but restricted to an exceptional growth in construction, which seems suspicious given the methodological problems in estimating value added in this sector.
    3. While the government's publicity material apparently makes many tall claims, information contained in the official web site of the concerned department does not seem to fully support the claims, therefore, the doubts I had expressed.
    4. It needs to be appreciated that Bihar was not stagnating prior to 2004, as many seem to believe. Economic growth during the last decade was slightly lower than the national average, with considerable yearly fluctuation (as I have shown). The growth rate seems to have improved after 2004, but the extent of improvement is open to debate (given the conflicting numbers, as I have shown).
    5. My questioning of the hype is not meant to disregard the progress that Bihar seems to have made in recent years, which are commendable. In fact, I have said, in my epw piece, that there are some lessons here for the rest of the nation.

    I hope the clarification helps.

    R Nagaraj

    R Nagaraj

    Indira Gandhi Institute of Development Research,

    Mumbai 400 065.

  2. From: Ashok Sharma
    Date: Wed, Mar 10, 2010 at 8:50 PM
    Subject: Re: Comment on Bihar GDP growth figures

    Dear Prashant,
    Thanks for sharing the response of Mr Nagaraj. His intention may be noble but the question remains unanswered "Why everyone get over excited by anything related to Bihar?".

    The data is prepared by CSO which is not working on the payrole of Bihar Gov. Did Mr Nagaraj shared his apprehensions with CSO?

    When was the last time we came across such article on any other state?? Why media ignored the per capita allotment to Bihar in 5-year plans since Independence.

    There is no denying that there are many well wishers who want Bihar to succeed by providing critical feedback but in reality too much negative media campaign has hurt bihar's image so bad that

    Bihar is still struggling to come back on its own term.

    There was front page title in India today when I was in college. The title was - "The good , The bad and Bihar". Now how disgusting is that. We Biharis never realized that each and every negative campaign has given reasons to others that today .... Koi bhi sadak chap bihari ko gali de ke chala jata hai..and we bihari's ask ourselves.. "why me??".

    We all know that we have problems...what bothers me is that when people get over excited and start blabbering about Bihar as if there is no one to give them befitting reply.

    We should not take any more BS from anyone. BTW, Constructive feedback is always welcome :).


  3. I would like to say that 4-5 yr back the condition of bihar was even worst than hell.No one even wanted to look at that.Apart from that lots of changes have been brought in Bihar.Nitishji is trying to create infrastructure of Bihar.Without Infrastucture,commercialiasation will be like a bird without nest.
    U only say that without road,electricity and water do u expect companies to come and invest.
    By building infrastucture Bihar has attracted lots of investors to invest.The eateries and the resturaunts are doing marvelous business.


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