The stock of a Chief Minister in India is measured by the number of visits by high profile dignitaries from the Government of India to the respective province. By that reckoning, Maharastra is possibly on the highest pedestal; be it the event of unprecedented rain leading to accumulation of knee deep water in Bombay or farmers' suicide in Vidharbha because of draught or handing over living quarters to the women beedi workers in Sholapur, the Prime Minister of India, Dr. Manmohan Singh is in attendance on every eventuality and occassion. Incidentally, each visit also had separate financial package, for the given region in the state. On that count, Nitish Kumar who completed his nine months in office as the Chief Minister of Bihar on August 24 is dismal. Even though currently a draught is devastating Bihar, Prime Minister could not visit the state. Far away in Hyderabad, he exhorted the former indentured laboures from the state, who have become some what wealthy in Mauritius, to invest in the land of their forefathers, in the last NRI meet. Nitish Kumar in his nine months' tenure could ensure the visit of President and Vice-President of India. President Abdul Kalam has not only adopted Bihar, he almost acts as a brand ambassador of the state. While the Presidential forays is a matter of prestige and honour, it further helps in creating ambiance of the state. But in terms of tangible resource devolution, it has no significance. However, Nitish Kumar literally accomplished a 'political coup' by ensuring the visit of P. Chidambaram, the Union Finance Minister for a half a day to Patna during his present tenure. This was possibly Chidambaram's first visit to any of the Hindi Heartland states and thus not an ordinary event. The visit was also important as he is not a run of the mill union minister; he has not only the ability to set the national economic agenda, but also the dexterity to implement it which has far reaching implications for economically peripheral states like Bihar. Thus the result of his visit should not be measured in terms of financial package announced for the state, but its symbolic significance. Is economically resurgent India trying to locate Bihar in its cognitive world and looking for a turn around in near future? The very fact that two relatively young leaders, Nitish Kumar and Chidambaram, broke ice between themselves, symbolizing the union and the state governments, and both have long innings to play in the national politics, the meeting had deep significance. In the increasingly market economy, the one to one personal rapport is more important than formal institutional arrangements for determining the economic contours.

Basically, Chidambram's visit should be examined along three parameters. First, in univocal terms, he warned the commercial banks to improve its performance and its internal governance. If the target, set by Chidambaram, to devolve additional Rs. 10,000 crore in the agricultural credit plan in the state in the current financial year is achieved, it will bridge significantly the mismatch between the savings and the investment rate in the resource starved state of Bihar. It is a dismal commentary on the performance of the banks, that 37 blocks of the state are still outside its pale, 800 branches are manned by only one officer and 700 branches of the banks have not devolved credit of single rupee in its respective area. It is indeed ironical that the poor state of Bihar could generate a sizeable deposit of Rs. 46,134 crore, but Rs. 31,326 crore of it is transferred from the state to rest of India through the machinery of banks. If Chidambaram is able to provide the promised good performance of its own institutions, as indicated by pulling up the shocks of the banking mandarins, it will be great service to the benighted state of Bihar.

Secondly, Chidambaram's chiding about poor quality of governance in the state should not be ignored. He even sarcastically mentioned that if resources have been devolved for roads or bridges or school or hospital, at the end of the day, these items should really get built. This statement implies that resources in Bihar get siphoned off lock, stock and barrel to private coffer, without tangible identifiable result. In deference to what the media usually projects, this impression is not a result of the last one and half decades; the image of Bihar as the most corrupt state (both in the rank of civil servants or politicians) continues from the immediate post independent period. To nullify this image of outright corruption, the fiction of Appleby about Bihar's good governance was created in spite of the fact that nowhere in Paula Appleby's Report there is any mention of good governance in Bihar. The stick of Appleby was used to beat all discordant voice which questioned the quality of governance in Bihar. So unless the systematic siphoning of resources is stopped, as Chidambaram hoped, Bihar will not be able to create a new benchmark in the matter of governance.

Finally, visit of Chidambaram to Bihar, will ensure that he takes cognizance about historically disabling factors that is inhibiting growth in some of the peripheral regions of India. In case of Bihar, it had to face historical disadvantage. As a first seat of British colonialism, not only the indigenous artisans and traders were exterminated, the tenurial system of 'permanent settlement' further spelled doom for our state in the matter of generation of surplus, appropriation of surplus and in turn investment and per capita expenditure. The post independent development strategies of India did not make efforts to reverse this disadvantage of Bihar. The vivisection of the state in November of 2000, between Bihar and Jharkhand, further crippled our public financial and economic edifice. Since independence, not only Bihar has lowest per-capita plan expenditure, but even in the matter of non-plan expenditure, it is still the lowest in the country. Chidambaram rightly mentioned, in an interactive session with the developmental specialist and agencies, that there is substantial jump in the 12th Finance Commission award for Bihar. But even after that, the per-capita allocation for the state is lowest in the country, even though Finance Commissions grants are expected to be 'equalization' grant. It is not often realized that the quality of governance in a given state, where the capacity for internal resource generation is limited, the Finance Commission grant is extremely important. The whole edifice of the state and its civil service is lubricated through the non-plan grant award of the Finance Commission. Even for meeting the matching grant of the Planning Commission or servicing the debt, the substantial quantum of Finance Commission award is very necessary. Long before independence, way back in 1930 in The Memorandum for the Indian Statutory Commission on the Working of the Reforms by Bihar and Orissa government indicated that, expenditure in administration, education, health and police was the lowest in the country. It identified the 'permanent-settlement' to be the main cause of limited resource generation and in turn limited administrative expenditure. The 'permanent-settlement' also stood in the way of regular survey and settlement operations, as in the 'Royatwari' areas, which forms the 'Sun rise' states of India. The historical absence of governance at the lowest levels of the state, where social arbitration is still being done by the feudal or by the mafia. In areas with militant agrarian struggles, this role is also played by the left radical organizations. If the writ of the state in Bihar has to made all pervasive, not only the non-plan expenditure has to be increased in administration, but some parts of the state structure also has to be dismantled. If fiscal management is followed by debt reduction, as exhorted by Chidambaram, the proportion of third and fourth grade employees, who do not contribute to productive governance, should not only be reduced, even in the matter of pay structure, it should be rationalized. Incidentally, the annual per-capita expenditure on state government employees is the highest in the country (Rs. 1.5 lakhs), whereas the national average is Rs. 82,000 only.
In the absence of such understanding about historical disability, one will not be able to appreciate the reasons for our debt accumulation over the years. If the cabinet of I. K. Goral could write off the debt of Punjab, one of the richest state of the country, why can't this favor be extended to Bihar as well. In any case, without expanding the market and strengthening the entrepreneurial base, we cannot hope to devolve substantially resources through market related rout. On the other hand, hardly any department of the Bihar has any in-house capacity to prepare projects which can withstand rigorous scrutiny by national and international organizations, for funding. Our cognitive world is still very limited. We still flatter ourselves about our 'imagined' heritage of 'good governance' and still involve their ideological progenies for streamlining the future economic governance. Whereas we should take Chidambaram's word with some amount of pinch of salt, but his caution for quality of governance, if ignored, will be at our own peril.

One can only hope that, even if Prime Minister ignores Bihar, it will at least be the destination of other luminaries who could help in the re-branding of the state. In that context, the visit of Chidambaram to Bihar has been one of the glorious moments for Nitish Kumar in his nine months saddle.

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