Why is Bihar poor?

Many states have talked about step motherly treatment from the central government and this is often a political statement. However the statistics from Bihar and the disparities are hard to ignore when it comes to the question of step motherly treatment towards Bihar by the central government.

1. Road Density: State’s road density (per head of population) is the lowest and is about 40% of the national average.
2. Railways: Bihar has boasted of many Railway Ministers but the rail route density is also the lowest (if we ignore Kerala and the hill states).
3.  Power generation capacity: Bihar has less than 1% of the country’s power generation capacity. This is the condition of the state which had a high level of coal and other mineral deposits not long ago. Even power plants sanctioned by the state government / central government are not coming up because
1. Bihar not being given coal linkages by the central government
2. Bihar asked not to use water from the river Ganga for power generation
4. Power consumption: Per capita power consumption is 12 percent of the national average.
5. Revenue resources: Very limited. Just 10% of Haryana’s per capita
6. 5 year plan outlays: Bihar’s per capita plan outlay has been the lowest among all states in most plan periods. Some of it was offcourse Bihar’s fault (example Lalu’s era) but even in Nitish Kumar’s period, Bihar continues to be under-invested for development even though Nitish has been asking for funds from long
7. Freight equalization policy: This policy of the past half century has neutralized whatever locational advantage Bihar had for attracting natural resources based industry. And then the special tax benefits to better-off states have indirectly compounded the damage.
8. Bank loans: Since industry is bare minimum in Bihar, most of the money that banks collect as deposits in Bihar is being loaned out in other states.

Most of the above can be attributed to the Central government. But lets leave the past and concentrate on the present and the future.

Today the state has an atmosphere which is conducive to investments. Then why are the Central Government and the Planning Commission hesitant to invest in Bihar? Isn’t Bihar a part of India? Doesn’t Bihar deserve to grow when it has helped other states to prosper either by giving natural resources or by giving the labor workforce? By one estimate the Punjab farms and the farmers are only thriving because of Laborers from Bihar. If the laborers stop going there, the farm industry there will collapse as Punjab doesn’t retain most of its youth who move out to greener pastures in India and abroad).

Isn’t it time for the Prime Minister – Chairman of the Planning Commission, the Dy. Chairman of the planning commission – Mr. Montek Singh Ahluwalia and the Central Government to overcome political compulsions and support the cause of Bihar. Till when can they ignore the 3rd most populous and the poorest state of India (the highest number of poor people live in Bihar).

Its time for everyone to ask our Prime Minister and Mr. Montek Singh Ahluwalia – When will you start thinking for Bihar and its people???

The above statistics are taken from the article T N Ninan: Why Bihar is poor published in the Business Standard and authored by Mr. T. N. Ninan