Bihar is the 12th largest state in terms of geographical size at 38,202 sq miles (98,940 sq.km) and 3rd largest by population in India. Almost 58% of Biharis are below the age of 25, which is the highest proportion in India.
Today, Bihar lags behind the other Indian states in human, economic development terms. Economists and social scientists claim that this is a direct result of the skewed policies of the central government, such as the freight equalization policy, its apathy towards Bihar, lack of Bihari sub-nationalism (resulting in no spokesperson for the state). The economy of Bihar is largely service oriented, but it has a significant agricultural base. The state also has a small industrial sector. As of 2008, agriculture accounted for 35%, industry 9% and service 55% of the economy of the state. Among all the sectors, the manufacturing sector performed very poorly in the state between 2002–2006, with an average growth rate of 0.38% compared to India's 7.8%. Bihar was the lowest GDP per capita in India, although there are pockets of higher than average per capita income. Between 1999 and 2008, GDP grew by 5.1% a year, which was below the Indian average of 7.3%. More recently, Bihar's state GDP recorded a growth of 18% between 2006–2007, and stood at 94251 Crores Rupees ($21 billion nominal GDP). In the five-year period of 2004–2009, Bihar's GDP grew at a stunning rate of 11.03%. This makes Bihar the fastest growing major state. Bihar accelerated its growth rate to 14.8% in 2010-11.In actual terms, Bihar state GDP was ranked second out of 28 states, next only to Gujarat.
After independence the state has faced apathy of the Centre through regular political neglect and misrule. The Chief Ministers of the state was imposed by the central leadership of parties, without caring about the individual’s maturity, ability and understanding to give the state a developmental thrust. The education system of Bihar was purposely damaged and the youth of Bihar were misled to unproductive direction. Leaders in order to gain popular youth vote had damaged the education system by introducing cheap irrational policies of passing the students without English and other subjects. The popular policies of passing the students by letting them pass the examination by unfair and cheap means have misled the youth. This in return has led to the erosion of ideology.
In the year 1990 Lalu Prasad Yadav became Chief Minister . By 2004, 14 years after Lalu's victory, Economist magazine said that "Bihar become a byword for the worst of India, of widespread and inescapable poverty, of corrupt politicians indistinguishable from mafia-dons they patronize, caste-ridden social order that has retained the worst feudal cruelties".
The name Bihar captured everything that was wrong with the old India — a combustible mix of crime, corruption and caste politics in a state crucible that stifled economic growth.
In 2005, the World Bank believed that issues faced by the state was "enormous" because of "persistent poverty, complex social stratification, unsatisfactory infrastructure and weak governance". The people of Bihar - civil society, businessmen, government officials, farmers, and politicians - also struggle against an image problem that is deeply damaging to Bihar's growth prospects. An effort is needed to change this perception, and to search for real solutions and strategies to meet Bihar's development challenge. The new state of Bihar inherited major fiscal problems which persist. These include large fiscal deficits, a heavy and growing debt burden, imbalances in expenditure allocation, and institutional shortcomings in expenditure management and budget implementation. These were compounded by the separation of Jharkhand from Bihar, creating a division of staff, assets and liabilities, and adjustments to the state’s changed resource base. Though the government has responded to the fiscal crisis with measures such as new taxes to improve revenue performance and steps to reduce losses from defunct public enterprises, the fiscal challenges facing Bihar remain daunting.cal, educational and productive thrust of the Biharian Society.
However the picture of Bihar has changed drastically from a story of “Gloom to a Boom” and this has been due to the change in leadership in the state which has ushered excellent governance and economic vision.
The New York Times “Asia Pacific” has revealed and how –“The improved governance, though slightly, has led to an economic revival. Bihar is a textbook case of how leadership determines development. Lalu Prasad, a wily populist politician whose party peddles a message of lower caste empowerment, ran the state for 15 years from beneath a banyan tree. Under Mr. Prasad’s watch, criminal syndicates kidnapped, extorted and robbed with impunity, protected by political leaders, or in some cases led by politicians. Mr. Prasad’s government did little to improve the daily lives of Biharis. Its already dismal roads disintegrated into impassable tracks. Its schools crumbled; teachers did not show up for work. Its health centers were left unstaffed. Bihar had some of the country’s sickest, poorest and shortest-lived people in India, a dismal catalog for a state that in its glory days, a few millennia ago, was home to one of South Asia’s most powerful empires and the place where the Buddha reached enlightenment.
“It was not a case of bad governance,” Mr. Nitish Kumar said in an interview. “Governance was completely absent from the state of Bihar.” When Mr. Kumar took over, he found government offices filled with dusty files and Remington typewriters. It was as if most of the 20th century had passed Bihar by. He tackled crime first. The order went down to the lowliest constable — the law was to be enforced, and criminals would be punished, no matter their political connections. Powerful men were arrested, many of them sitting members of Parliament and the state assembly. They were convicted quickly in fast-track courts. “That gave a clear signal that the law will prevail,” Mr. Kumar said.
As per BBC reports:- For many years, Bihar in northern India has earned notoriety for being one of the poorest and most lawless states in the country. Nobel-prize winning author VS Naipaul once described it as the place where "civilisation ends". But all is not lost, perhaps. We discover five areas where Bihar might consider itself to be ahead of other Indian states.
Bihar is the only state in India to have 50% of places in local municipal bodies reserved for women. Fast track courts in Bihar have convicted and sentenced more criminals than courts in any other Indian state in the past 18 months. Bihar is the only state in India where retired soldiers are being hired as policemen to stem the crime wave. Sudha a milk co-operative has begun "exporting" milk to other Indian states like Uttar Pradesh, West Bengal, Jharkhand and Delhi. Launched in 1993, the co-operative's revenues from a range of milk and milk products has risen from $73.5m in 2001-2002 to $136m today. The co-operative has 6,000 outlets covering 84 towns in the state. A simplified tax system conceived and launched in Bihar is now being emulated by Sri Lanka and various African countries and has been lauded by the United Nations. The UN was so impressed by the taxation model that it gave a $30,000 award to Bihar for introducing this method
Bihar has shown a marked improvement in women’s empowerment. Several program’s of literacy , financing, formation of SHG’s , reservation and employment have been specially carried out for women Bihar, with female literacy at 53.3%, is striving to climb as the government has established educational institutions for women.. At the time of independence, women's literacy in Bihar was 4.22% and in 2001 it was a meager 33.57 %. Women were given 50% reservation in electorals for the first time ever in India. Of the 2, 60,000 representatives in Panchayats, a whopping 1, 20,000 are women. The Mukhyamantri Akshar Aanchal Yojna, aiming to make 40 lakh women literate in a year and providing bicycles to girls are populist moves, which have not only paid off but led to this sense of empowerment and fall in school dropout rates. Under this scheme, a schoolgirl gets a cheque of Rs 2,000 upon passing class VIII to buy a bicycle so that she can go to school every day.
We got reservation in local bodies, employment and social security and above all respect and dignity, which is hard to find in a male-dominated society,” said Pallavi Singh, a school teacher in Patna.
Woman power appears to have played a pivotal role in Nitish Kumar’s landslide victory in the assembly elections in Bihar. Women voters turned out at a higher rate than men, with 54.85% of registered female voters casting a ballot in state assembly elections that were spread over a month compared to 50.70% of male voters, according to an election commission official in Patna. “The turnout of women voters was over 60% in nine out of 38 districts in Bihar, while women outnumbered men in 23 other districts.”
Woman power appears to have played a pivotal role in Nitish Kumar’s landslide victory in the assembly elections in Bihar. Women voters turned out at a higher rate than men, with 54.85% of registered female voters casting a ballot in state assembly elections that were spread over a month compared to 50.70% of male voters, according to an election commission official in Patna. “The turnout of women voters was over 60% in nine out of 38 districts in Bihar, while women outnumbered men in 23 other districts.”
Presenting the State Budget and Survey report for 2012-13 Bihar’s Dpt. CM and finance minister Shri Sushil Modi said, "The per capita income in Bihar has increased to Rs 17,590 compared to Rs 8,528 in 2004-05 but it is still the lowest in the country and far behind the national average of Rs 40,000." The annual growth rate between 1999-2000 and 2004-05 jumped from 3.5% to 10.93% during the next five year period. Despite the economy under strain due to lower devolution by the Finance Commission, Bihar's GSDP at current prices in 2009-10 stands at Rs 1,68, 603 crore with per capita income of Rs 17,590.
Highlighting the results of the governance and fiscal management, he said the revenue surplus of state increased from Rs 2,498 crore in 2006-07 to Rs 6,272 crore in 2011-12. The capital outlay increased steadily from Rs 5,211 crore to Rs 11,448 crore during this period while development expenditure on social and economic services increased from Rs 17,000 crore to about Rs 43,000 crore. "The gross fiscal deficit has been 2.43% in the budget estimates of 2011-12, which is lower than the 3% limit fixed under the Fiscal Responsibility and Budget Management Act," the deputy CM said. Shri. Modi said between 2004-05 and 2010-11, the sectors reporting a growth rate of more than 15% were manufacturing (23.30%), construction (19.61%), communications (27.23%) and trade, hotels and restaurants (20.22%). There has been a fivefold increase in registration of new vehicles from 80,000 during 2005-06 to 3.87 lakh during 2010-11. Similarly, the number of mobile phone connections in the state increased to 4.48 crore in 2010-11 compared to 42.14 lakh in 2005-06.
The report also highlighted steady upward trend in per capita development expenditure (PCDE) during 2001-02 to 2010-11. From Rs 930 in 2001-02, the PCDE went up to Rs 3,467 in 2010-11, implying an annual growth rate of 17%. During the period, the country's PCDE grew at an annual rate of 13.6%. "The share of social sector spending in the total budget of Bihar increased from 18.9% in 2001-02 to 31.9% in 2010-11," Modi said. Between 2003 and 2008, the inflow of foreign tourists saw a near-six fold rise from 61,000 to 346,000. Last year, on aircraft movement, Patna airport registered a 42.8 per cent growth, the highest in the country, handling 7,456 flights compared to 5,220 in 2008-09. Bihar has emerged as brewery hub with major domestic and foreign firms setting up production units in the state. Three major firms — United Breweries Group, Danish Brewery Company Carlsberg Group and Cobra Beer — are to set up new units in Patna and Muzaffarpur in 2012.
Indian and global business and economic leaders feel that Bihar now has good opportunity to sustain its growth and thus they have shown interest in investing in the state.
