Time Nitish plays economic enabler


By Shaibal Gupta
  • Published 3.12.15
GUEST COLUMN: Shaibal Gupta

The Mahagathbandhan government of Bihar is qualitatively different from the previous NDA government. The social base of this government is so wide it can take any people-friendly decision without fearing negative political consequences.

Nitish Kumar, as head of the erstwhile NDA government, emerged as a principal "provider" in Bihar. During his nearly ten-year-long tenure, he brought about a sea change in infrastructure in the state. In the realm of roads, bridges, energy and other infrastructure, his government's achievements have been unprecedented. He also succeeded in the realm of political "enabler", introducing "positive discrimination" for women, lower backward castes (Annexure-I) and the Dalits.

Now, in the Mahagathbandhan government, with massive support of the subaltern and an empowered section of the middle class, Nitish is required to choreograph a parallel strategy of economic "enabler", as opposed to "provider". If one makes a perusal of "Nitish Nischay" and the Mahagathbandhan's joint programme, the agenda can be divided into these two categories - one set of agendas will be under the rubric of "provider" and the other set under "enabler". These two agendas together are obviously daunting but, if pursued sincerely, they could be a game-changer for Bihar.


• The long-term growth rate of Bihar's economy, around 10 per cent in the last 10 years, should be maintained. This could be achieved through massive public investment in infrastructure, particularly roads and bridges. Most of the unfinished work should be completed soon, particularly the bridges over the Ganga. Further, some of the high traffic-density roads should be upgraded to four or six lanes, so the connectivity within the state becomes smooth and seamless, a necessary precondition for regionally inclusive growth.

Apart from massive construction of roads, bridges and provision of electricity, the new Nitish government's agenda should also include Ghar tak pakki gali-naaliyan, Har ghar nal ka jal, Shauchalay nirman, Ghar ka sammaan (Proper drains and roads, piped water in every household, build toilets, honour houses) and finally Har ghar bijli, lagatar (Electric power to every household, non-stop). Under Nitish Nischay, the chief minister is already committed to these programmes and they should be implemented in mission mode.

• The institution of the state should be further strengthened. The dialogue between judiciary and executive, under the tutelage of legislature, should be re-established. Nitish had ensured authority of the state in his first term itself. The higher rate of conviction of criminals should continue unabated. However, care should be taken to see prosecution is sensitive towards the subaltern and no innocent person is convicted or legally harassed.

On the other hand, congenital criminals, who can bend the system in their favour on the basis of their social power, should not be allowed to go scot-free. Massive support of the subaltern in the election entails that the government revisit those massacre cases where after the lower court convicted the perpetrators, the higher court released them.

• For being a good provider, the state will have to be mindful of its own resources. Finance Commission transfers, even though constitutionally mandated, are dependent on the ability of the central government to ensure revenue buoyancy. In the 10th and 11th Finance Commission transfer (between 1995 and 2005), Bihar got Rs 12,000 crore less than the projected transfer. With the slowing down of the national economy, we will have to keep our fingers crossed about anticipated devolution during 14th Finance Commission. Thus, to continue the growth process, the internal revenue generation should be enhanced.

Even though our internal resources have increased steadily in the past 10 years, Bihar's tax/GSDP ratio is still much below the national average; the state government should make all efforts to reach the national average. Incidentally, Nitish has already announced, as promised in the election campaign, that liquor will be banned in the state. From the social perspective, this is a very good decision; but from the resource point of view, it will mean a loss of about Rs 4,000 crore annually.

Apart from the pay scale given to schoolteachers, the 7th Pay Revision Commission for the central government will impact the state's finances in the near future, both creating additional pressure on the state's finances. So, financial management will be a key problem in the near future.

In this perspective, it is suggested that there should not be a blanket ban on liquor; only country liquor should be banned to save the state's resources by about Rs 2,000 crore. For investors, tourists, visitors, and a few others, complete liquor ban will act as a serious deterrent. Secondly, under no circumstances should Bihar-based liquor industry be discouraged.

• Health infrastructure is an important provider for good quality of life. There has been substantial turnaround in the field of health in the past 10 years. In the way a number of additional primary health centres (PHC's) were built in the recent past, there is also a necessity to build sub-divisional hospitals. There are just 55 sub-divisional hospitals for 102 sub-divisions.

In the process, a large section of the rural population is deprived of high quality medical care. Additionally, while state initiatives should be heightened, "market" should also be given space in the health sector:

• Hospital infrastructure: It is a welcome initiative that the Bihar government has entered in PPP mode with a Delhi-based medical provider. Presently, other than Paras Hospital, there are no comprehensive healthcare providers. Patna-based initiatives like Ruben Hospital have also created an identity. One needs a large number of hospital beds to provide necessary healthcare to a 12-crore population.

Medical colleges and central institutes in Bihar are unable to attract talent. Thus, the state government should take steps to attract private players by providing incentives like abolishing entry tax on medical equipment, providing power connection on a priority basis and without heavy deposits and streamlining taxation departments to ensure easy payment of taxes without any harassment. Further, to ensure quality and specialised services, health institutions which are ready to provide new treatments, like transplant (kidney, bone marrow or liver) should be encouraged by providing early clearances and licenses. Also, license policy for drug, blood bank, narcotics etc. should be eased.

• Health policy: At present, there is no state government policy to tackle diseases that have reached epidemic proportions; for example, there is no strategy to fight diabetes, no comprehensive strategy to diagnose and treat cancer and no strategy to eliminate endemic diseases like kala azar. Most tasks in the area of health are being operated through limited number of NGOs, who have limited capacity or may not have full ownership of the project. In this background, state government programmes should be of specific nature. For example, for elimination of cervical cancer, there should be arrangement for early diagnosis through colposcopy or vaccination of adolescent child.

Bihar has a huge potential in the tourism industry, particularly through places linked to Buddhism. Bodhgaya as a pilgrimage tourist centre has as much potential as Mecca has for Muslims and Jerusalem for Christians. If these places are adequately developed in terms of connectivity (road, rail and air) and tourist facilities, it could be a valuable source of income and employment. A large part of this tourist inflow will be from Sri Lanka and some affluent East Asian countries.


The present century is "knowledge century". A knowledge society can be built, only if backward and forward linkages of education are strengthened simultaneously.

In Bihar, massive work has been done in strengthening backward linkages of education. In particular, enrolment at schools has increased and number of teachers has more than doubled from 2005 to 2015. Nitish is committed to open a high school in every panchayat. On the other hand, a number of institutions of higher learning in law, management etc - like Central University, IIT's and IIM's - were established in Bihar in the recent past. But greater thrust is required from the government for higher and technical education to flourish. It is reported that there are 8,000 vacancies at various levels in the university system.

However, for both backward and forward linkages of education, it needs dedicated attention. Until and unless there is massive infusion of world-class quality, one cannot hope to build an authentic knowledge society. Proper provisioning of both linkages will help society get enabled. To give authentic thrust to backward linkages of education and to build a knowledge society, the Common School System Report - commissioned by the NDA government during its first term - should be implemented.

On the other hand, programmes like Aarthik Hal, Yuvaonko Bal, Aarakshit Rozgar, Mahilaon ko Adhikar and Avsar Badhe, Aage Padhein are "enabler" programmes, which will take Bihar's human development capacity to a new benchmark. After ensuring women's political empowerment through "positive discrimination" in PRIs, the professional foundation for women is being created with the promise of 35 per cent reservation for women in all state government jobs.

In a place like Bihar, it is extremely important to promote entrepreneurship and industrialisation. Towards, this, the "venture capital" of Rs 500 crore, as envisaged in "Nitish Nishchay" is expected to trigger bottom-up capitalism. In the past decade, the public investment was the most critical investment. It ensured a 10 per cent growth rate for GSDP. Now, it is high time for Bihar's economy to get integrated with the national and international market.

Market engagement is the necessary precondition for the next phase of growth. There should be a concerted move to re-start the "stock exchange" in Bihar. Bihar-based firms should be encouraged to get listed. For implementing "Nitish Nishchay", this should also be done under the supervision of a high level mission.

It is almost impossible to visualise a fundamental change in traditional Bihar economy without land reforms. For this, one needs updated land records, consolidation of holding, recording the rights of the sharecropper and surplus land distribution. Without ensuring these basic agrarian reforms, a state cannot be enabled for an authentic growth strategy. The recommendations of the D Bandopadhya Committee on Land Reform, constituted by Nitish himself', should be implemented. Land reform will ensure a just society, which will not only ensure institutional centric growth but also social tranquillity.