Can Nitish Kumar be the ‘Margaret Thatcher of Bihar’?

Can Nitish Kumar be the ‘Margaret Thatcher of Bihar’ – and change the face of what was until not long ago one of India’s most wretched states and a metaphor for everything that was wrong with governance in India? At least one British industrialist of Indian origin thinks he is . Addressing the Global Summit on Changing Bihar, Karan Bilimoria, who co-founded Cobra Beer, likened Nitish’s strenuous efforts to clean up Bihar to ‘Iron Lady’ Thatcher’s “revolution” of the 1980s, which he claimed had changed the face of Britain. Other industrialists and speakers at the conference, which was intended to showcase Bihar’s supernormal growth pace of recent years, too offered high praise for Nitish Kumar. The Chief Minister’s exertions in the cause of Bihar’s development have served to elevate his stature to the national stage as one of the ‘star performers’ within the BJP-led National Democratic Alliance, who could – if the planets so align themselves in a certain configuration – even become Prime Minister. [caption id=“attachment_218874” align=“alignleft” width=“380” caption=“Even Nitish Kumar’s damnedest efforts may not be able to fix Bihar entirely, given the burden of the State’s economic baggage. Adnan Abidi/Reuters”]  [/caption] Not that the NDA is lacking in potential candidates, chief among them being the BJP’s own Narendra Modi, whose record of engendering high economic growth and a corruption-free administration in Gujarat is considered even more superior to Nitish Kumar’s. Yet, Modi’s inability thus far to break completely free of the legal cases relating to his administration’s culpability in the 2002 Gujarat riots has, by some estimates, given a “secular” alternative like Nitish Kumar a relative edge. From all accounts, Nitish Kumar has in many ways already transformed Bihar. The State that had under decades of Congress rule been reduced to a basket case worse than sub-Saharan Africa, and pauperised even further by Lalu Prasad Yadav, is today on the slow-mend. Under Nitish Kumar, the State has raised the bar in the fight against corruption in the bureaucracy, with fast-track trial courts and property attachments that have spread panic in the ranks of entrenched interests. Nitish Kumar has also gone about fixing the State’s law and order problems, which for decades saw caste-based private armies of land-owning bhumihars run a parallel administration, without the faintest challenge to their authority from the law enforcement agencies, such as they were. All these have contributed to a restoration of investor confidence, with Bihar being considered for the first time as an investment destination. That in turn has caused the State’s economy to grow at double-digit levels, momentarily exceeding even Gujarat’s growth pace. (That last bit of statistic is only an aberration born of the low growth base from which Bihar started; also, Bihar’s growth rates are extremely volatile, given its excessive dependence on agriculture.) Yet, for all this good showing thus far, and for all its upside potential from enhanced labour productivity, Bihar may already be close to reaching the limits of its capability, which even the most strenuous exertions of Nitish Kumar may prove difficult to overcome. That’s because, as Planning Commission member Abhijit Sen observed at the same Patna conference, all the low hanging fruit of developmental progress in Bihar have been plucked. After decades of poor progress, the “easy growth”, which manifested itself in explosive fashion in recent years, has been harvested. Sustaining these levels of growth may not be easy, given the nature of Bihar’s economy, which continues to be heavily weighted in favour of agriculture. And although Nitish Kumar reckons that the State will build on that strength and usher in a “second Green Revolution”, there are a variety of factors that could render that ambitious project unrealisable. For one thing, a ‘second Green Revolution’ can only come about from improved labour productivity and enhanced crop yields, both of which require investments that are beyond the reach of small and marginal farmers, who account for most of Bihar’s farming community. Hurdles to land acquisition remain high, and are additionally compounded by the complexities of establishing land ownership. Also, inadequate infrastructure – in terms of serviceable roads to take goods to market (at the most basic level) and the absence of cold storage chains (of the sorts that were envisaged as part of the policy to permit FDI in organised retail) — transfers the burden of loss on perishables disproportionately on farmers. As _Firstpost_ had noted earlier , Bihar’s low overall size of its economy means that its impact on India’s growth story will be less than spectacular, particularly when compared alongside the big engines of growth – Maharashtra, Gujarat, Andhra Pradesh, Uttar Pradesh and Tamil Nadu. Even if, for instance, Bihar grows at 10 percent a year for the next 10 years, its economy would be about the same size as Gujarat is today. That’s somewhat underwhelming for the man who is being labelled Bihar’s Margaret Thatcher (although given the long-term impact on Britain of a decade of Thatcherism, it may not be entirely a compliment). For the ‘Iron Man’, it also limits the scope for him to leverage good performance at the State level onto the national stage. The magnitude of the challenge from here on is perhaps sinking in, even with Nitish Kumar. Which is perhaps why at the investor conference, he focused somewhat disproportionately on the “ discriminatory policies” of successive Congress-led governments at the Centre – and even under British colonial rule – that had starved Bihar of its fair share of development. That is, of course, a historically accurate narrative, but coming from a man who set out to change Bihar’s karma, it perhaps represents a momentary frustration that even his damnedest efforts may not be able to fix Bihar entirely, given the burden of the State’s economic baggage.