Why Bihar Under Nitish is an average performer

There is no doubt that Bihar under Nitish has outperformed the previous Government under Laloo but when it comes to comparison with other States, Bihar has been an average performer

GDP Per Capita Growth (Current), 2005 to 2019, State wise growth (2019 Data is not available for all States)

  1. Telangana: 8.4 times
  2. Uttarakhand: 8 times
  3. Karnataka: 7.8 times
  4. Tamil Nadu: 6.4 times
  5. Andhra: 6.3 times
  6. Haryana: 6 times
  7. Rajasthan: 5.9 times
  8. Madhya Pradesh: 5.9 times
  9. Delhi: 5.7 times
  10. Bihar: 5.5 times
  11. Odisha: 5.3 times
  12. Chhattisgarh: 5.2 times
  13. Bengal: 4.8 times
  14. Uttar Pradesh: 4.7 times
  15. Punjab: 4.7 times
  16. Jharkhand: 4.1 times

When we consider the 16 States for which data is available, Bihar is ranked in the lower half at 10th.

The problem for Bihar

Bihar has a cocktail of problems that are peculiar to the State

  1. High Density plus High Fertility. There are far too many people living in small piece of land and having far too many children per family. While fertility rates have fallen, still a long way to go.
  2. No Rich States are neighbours of Bihar. For an economy to succeed, having a rich market close by helps, Bihar has no affluent market close by. No wonder that Manufacturing made up for just 6% of the GDP.
  3. Because of smaller budgets, Bihar is unable to invest in education and skills, also it is a small market in itself making it to difficult to build a robust service market.
  4. Though Bihar receives generous grants from the centre, it is unable to capitalise fully because of the above issues.

Major Strengths and Opportunities

  1. While Bihar is the poorest State in the country, when it comes to Trade, Repair, Hotels and Restaurants segment, it is the 8th largest. This is the biggest segment in Bihar
  2. Bihar has a robust agriculture sector that is troubled by smaller land sizes. Reforms and interventions can easily increase production substantially given the reach of irrigation in the State.

It is unclear if Bihar’s problems can be solved by better Governance locally. It needs massive central interventions for 4-5 years particularly in developing a robust consumer market that will then be a driving force for that State.

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