According to the Economic Survey 2010-11 tabled in the state Assembly on Wednesday both the GSDP and per capita income doubled in five years between 2004-05 and 2009-10. But the doubling of the per capita income in five years is not a big achievement as Bihar continues to remain at the bottom ladder so far per capita income is concerned. That its per capita is not even half of the national average tells the true story of the state of affairs here.

It seems that the divide between the poor and the rich is growing in Bihar as the state witnessed four times increase in the sale of vehicles and 10 times rise in tele-connectivity during the same period. On the other hand the Survey found that the contribution of agriculture sector in the GSDP has fallen from 26 per cent in 2005-06 to 19 per cent. The contribution of secondary sector is 17 per cent, construction 11 per cent, trade and hotels 30 per cent and transport six per cent.

The total number of registered vehicles rose from about 80,000 in 2005-06 to 3.1 lakh in 2009-10. This led to the increase in revenue collection from Rs 133 crore to 373 crore.

The Economic Survey tabled by the deputy chief minister Susbil Kumar Modi claims that the annual growth rate between 1999-2000 and 2004-05 was 3.5 per cent, which accelerated to 10.93 per cent during the following five years. But the Survey failed to point out a very important aspect: that in November 2000 the mineral-rich Jharkhand part of the state was carved out from Bihar. In that way even 3.5 per cent growth rate in the initial years is a big achievement as till then much of Bihar’s economy was dependent on what is now called Jharkhand. Any claim of big success without taking this important aspect into the mind will not help understand the true picture of Bihar. This is because after the creation of Jharkhand there were many economists, who simply wrote off Bihar––but it registered 3.5 per cent growth. Bihar grew slowly in the initial years and with much faster pace later on notwithstanding the non-payment of Rs 179,000 crore special package demanded at the time of its bifurcation. Both the Houses of state Assembly unanimously passed a resolution on the eve of the creation of Jharkhand to demand this amount as compensation as Bihar lost its entire mineral rich region.

Economists are concerned over the fall in contribution of agriculture sector from 26 per cent to 19 per cent. As an overwhelming number of people are one way or the other dependent on agriculture this fall in share obviously means that their income has gone down in the last few years. The devastating floods in 2007 nnd 2008 to be followed by two consecutive years of drought have certainly indicated that the scene in rural Bihar is not all too good. This notwithstanding the fact that now even mukhiyas and ward members have swanky cars at their doors––thanks to a number of centrally sponsored schemes, which have opened a flood gate of corruption.
Modi finds no fault with the fall in contribution of farm sector. While talking to the media later he said that in the United States the dependence on farm sector is just two per cent. According to him the figures show that there have been substantial diversions towards the secondary and tertiary sectors. “The state is no longer dependent on agriculture as it used to be when we took over when agriculture contributed as high as 26 per cent,” he added.
But unlike in the United States a very huge percentage of population is engaged in agriculture sector in Bihar––once again especially after its industrial hub in Jharkhand was hewed out from it. Besides, in the United States the farm production is not repeatedly falling as in Bihar in the last few years. According to the official figure the state is likely to witness 60 per cent fall in rice production this year alone. So this is a matter of great concern rather than to about.

Modi, however, regretted that the credit-deposit (CD) ratio continues to be poor, that is, just 32.23 per cent. The aggregate deposits of all banks in the state were almost Rs 99,636 crore as on June 2010, but the credit given by banks was only Rs 32,109 crore. This means that there was hardly any increase in the CD ratio during the last five years and goes to prove that the banks hesitate to invest in the state.

The Survey claimed a marked improvement in the fiscal position of the state government in the last five years. The revenue surplus of state government increased from Rs 82 crore in 2005-06 to Rs 6,557 crore in 2010-11. The capital outlay increased from Rs 2,084 crore in 2005-06 to Rs 10,434 crore in 2010-11 and the capital receipts rose from Rs 3,821 crore to Rs 6,515 crore during the same period.

The deputy chief minister, who also holds the finance portfolio, pointed out that in spite of increase in development expenditure, the state was able to contain debt liability within limits. The outstanding debt was Rs 42,500 crore in 2005-06 which was 52 per cent of the GSDP. While gross debt liability increased to Rs 57,700 crore, as a percentage of GSDP it decreased to 29 per cent. Similarly, the fiscal deficit decreased from 4.53 per cent to 2.28 per cent during the same period.

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