Sandeep Mallik's Blog

Tuesday, May 12, 2009

Bihar Economy on Take off stage??

I find it quite funny that one starts economics education in our country thorough international examples and anecdotes. (most examples are on widgets, which I am sure most dont know of till they come across this in an economics book)No wonder one is not able to relate to them. I would be guilty of same if I made no attempt to understand the economies of my home states before I express my opinion on Indian and other economies).My attempts to educate myself on them fell flat as there were no data readily available on this state (most data that I could lay my hand on was dated Census of 1991 and 2001.)Finally, I did a project on the US state of West Virginia(the only link that I had with the place is lyrics in song"countryroads”) trying to understand the structural changes in its economy since its growth began long back!!

This is why I was pleasantly surprised to find that the Bihar Govt claimed to have a SGDP growth rate of 16%(ahead of Gujarat's 10%) While this number is almost certainly wrong(Agricultural produce actually shrunk last year, industry is anything to write home about and services sector is yet to prosper atleast in a formal manner.)

Not withstanding the above facts I believe that the economy of Bihar would start picking up soon. Here are my reasons for the same
a) Infrastructure development is happening at some rate (especially in roads). This through various linkages would itself create some growth momentum.
b) Educational landscape is changing. The Govt has apparently lifted an age old ban on the private professional colleges (not sure of this though).
c) The long term social transformation that began at the end of 80s is nearly complete. The last time a upper caste person was a the chief minister of the state was in 1980s.This transformation is of extreme importance in a society where the land reforms did not happen.
d) Bihar electorate are likely to vote for Nitish Kumar who is seen as a pro-development chief minister.(However, I also believe that Bihar electorate has been a lot smarter than the mainstream media has given it credit of.. Mr Lalu Yadav had lost an election from Madehpura(a constituency full of yadavs a decade ago)

True a lot more is desirable on education(spoken English skills which is a must for the current service industry to prosper, though I have a different point of view on this, which forms a subject matter for a separate post) and the social change process has just taken roots and the feudal mindset as well as structure is still present.

However it would not be wrong to say that change is in horizon and as long as the weather Gods smile (economy is agrarian, mainly) and the law and order is in control(naxalism is a big threat and with situation in Nepal is getting out of hand). Finally it may be the time for land of Buddha to smile!!

1 comment:

  1. Buddha is smiling and smiling hard.

    Though the SGDP figures are always doubtful, I fail to understand why people took the earlier lower growth figures to be correct and the current high figures to be dubious.

    I believe Bihar urgently needs a
    - strong Agri-Logistics network
    - improved road infrastructure
    - mass-vocational training and education
    - tourism focused on Budhhism
    - flood disaster mitigation

    It is good to see a shift from caste based ideology to a development based politics. Though if one thinks otherwise, politicising development too can be dangerous in some ways.

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