Price of instability: As Nitish plays politics, Bihar's growth dips to single digits

Bihar is paying the price for political instability. Its economy is shrinking and Nitish Kumar's decision to break the alliance with the BJP in June 2013 started it all. The state, which was once the top performer in terms of growth among all non-Special Category Indian states, is now performing so poorly that its growth rate is down to single digits for the first time in a decade.

Manoj Kumar March 15, 2015 13:17:53 IST
Price of instability: As Nitish plays politics, Bihar's growth dips to single digits

Patna: Bihar is paying the price for political instability. Its economy is shrinking and Nitish Kumar's decision  to break the alliance with the BJP in June 2013 started it all. The state, which was once the top performer in terms of growth among all non-Special Category Indian states, is now performing so poorly that its growth rate is down  to single digits for the first time in a decade.

In the past 10 years since the Nitish Kumar government came to power in November 2005, Bihar’s average growth rate stood at 12 percent. As per the latest report of the Bihar Economic Survey tabled on the floor of the House in the current budget session of the state assembly, the growth rate stands at 9.92 percent, a decline of 0.81 percent as compared to last fiscal when it was recorded at 10.73 percent.

Bihar’s growth rate shot to a robust 16.18 percent in 2006-2007—the year when the NDA government headed by Nitish formally took over, and stood at 14.54 in 2008-09 and 15.04 percent in 2010-11. It was the only state which clocked a double-digit growth rate during that fiscal beating even Narendra Modi’s Gujarat, Madhya Pradesh and even Delhi. While economists would argue that Gujarat's economy operates on a much larger base thus its growth is more creditable, everyone agreed that Bihar's success was commendable too.

Price of instability As Nitish plays politics Bihars growth dips to single digits

Bihar Chief Minister Nitish Kumar. PTI

A report of the Associated Chambers of Commerce and Industry (ASSOCHAM) also said that Bihar was growing faster than Gujarat in terms of fresh investments in crucial sectors. “Bihar logged in a compounded average growth rate (CAGR) of 20 percent in public investment between March 2003 and March 2013 while this was 14.1 percent in the case of Gujarat. Likewise the CAGR of private investment in the same period was 104.5 percent in Bihar as compared to 31.9 percent in Gujarat,” a study conducted by ASSOCHAM in June 2013 said.

Post-NDA split, however, it has been a different story. Now the state’s economy  is just sliding as the ruling JD(U) government headed by Nitish and then Jitan Ram Manjhi was preoccupied with the task of arranging required support of alliance partners to stay in power, rather than focussing on growth and governance which was the USP of the present regime.

“The kind of political instability which gripped Bihar post NDA split has apparently affected state’s growth rate as the present situation is just now conducive for state’s economy,” said prominent economics professor Nawal Kishore Chaudhary. He says the falling growth rate in the state is indeed a matter of grave concern.

According to him, what is alarming is that agriculture growth has gone into negative territory but the present budget does not ward off such challenges. “There are many challenges before state economy but the government does not appear serious about them,” he said.

The state came in the grip of political instability shortly after Nitish pushed the BJP, its long-standing junior partner, out and formed his own JD(U) government with the support of the Congress, the CPI and some independents. The BJP was kicked out of power while the people had handed out a historic three-fourth mandate in favour of the NDA.

Since then the JD(U) government has been forced to seek confidence votes at least four times in the past 21 months—first time on June 19, 2013 after Nitish formed his own government without BJP, then on May 24, 2014 when Jitan Ram Manjhi became the CM after Nitish resigned, then in February this year when the Manjhi government was asked to prove majority in the House after he was removed as leader of the JD(U) legislature party although he resigned midway and finally after Nitish again became the chief minister when Manjhi resigned. Although it survived each time, such frequent exercises literally drove government’s attention away from governance.

It was only after the NDA split, that the terrorists targeted Bihar twice—first in Bodh Gaya and then at Patna’s Gandhi Maidan during Narendra Modi's rally. Although the casualty figures did not go beyond six, the incidents affected the faith of the masses in the state administration.

If that was not enough, the state also recorded a huge rise in incidents of communal violence post the split with NDA. As per a report prepared by the Home department, more than 170 cases of communal tension were reported in the past 17 months since Nitish broke an alliance with the BJP. Last year alone, more than 90 incidents of communal tension were reported from across the state, indicating the seriousness of the situation.

It was during the period when the bureaucrats appeared headed for Delhi on central deputation as the prevailing climate did not apparently “suit” them. As per a latest report of the state government, currently there are 40 IAS officers on central deputation while five others are on inter-state deputation.

Post the NDA split, the JD-U coalition government has been giving more priority to caste considerations with the idea to lure more votes as the break-up with the BJP obviously denied them  upper caste votes.

Nitish himself held meetings with Dalit officers thrice in his previous tenure while his successor Manjhi held once such meeting with the Dalit bureaucrats in January this year which kicked up a political storm.  This gave the impression that the  JD(U) regime was turning its focus away from development to caste even as Nitish’s move to join hands with his arch-rival RJD chief Lalu Prasad left no one in doubt.With Lalu's support,  Nitish is now trying to script a fairly new brand of Bihar development  but the messags has not gone down well.

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