Ever since Nitish Kumar became chief minister of Bihar after 15 long years of Laloo Prasad's rule, there was a sense of optimism in Bihar . There has been a lot of talk about development in Bihar and its growth model . In this post i will be talking about Bihar and its new found growth model . Has it actually worked? Or is it just a media fanfare?
Bihar accounts for 3% of the total area of the country and 8% of the population.This adverse land-man ratio is reflected in the high density of population, at 880 per sq. km .The decal growth of population for 1991-2001 was 28.43%, the highest in the country. According to 2001 census, the literacy rate in the state was 47.53%, again the lowest in the country. The economy of the state is characterized by high incidence of poverty, low literacy rate, unemployment and low per-capita income. The human development indicators too were very poor as per 2001 census.
So what has changed since Nitish Kumar came to power ? For starters, there has been a very substantial increase in the growth rates of GSDP (Gross State Domestic Product):
| YEAR | GSDP growth rate |
| 2006-07 | 17.7% |
| 2007-08 | 7.6% |
| 2008-09 | 14.5% |
| 2009-10 | 10.4% |
| 2010-11 | 14.7% |
| 2011-12 | 13.1% |
The growth rate has been phenomenal to say the least. A state put in the league of BIMARU(Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh) states, these figures are astounding by any standards. GSDP of Bihar was highest in the country in the last plan years. If we compare Bihar to peers states (BIMARU) Bihar has outpaced all of them:
| Year | Bihar | Orissa | Madhya Pradesh | Rajasthan |
| 2005-06 | 0.9 | 5.6 | 5.3 | 6.6 |
| 2006-07 | 17.7 | 12.8 | 9.2 | 11.6 |
| 2007-08 | 7.6 | 10.9 | 4.6 | 5.1 |
| 2008-09 | 14.5 | 7.7 | 12.3 | 9.0 |
| 2009-10 | 10.4 | 6.6 | 10.5 | 5.5 |
| 2010-11 | 14.7 | 8.6 | 8.1 | 10.9 |
| 2011-12 | 13.1 | 7.1 | N.A | N.A |
| Average Growth over 2005-12 | 11.3 | 8.5 | 8.3 | 8.1 |
| Average Growth over1994-02 | 4.9 | 3.9 | 4.7 | 7.3 |
*source: RBI data
Now the question arises, what has fueled this unprecedented growth?
The growth has been fueled by the twin engine of construction activities and services sector.A lot of roads, bridges and other infrastructure have been built, a fact corroborated by looking at the amount of cement consumed over the last few years; Bihar has consistently consumed highest cement in the last 5 years.
Even when we compare each sector individually; the figures are very impressing :
| Growth in the constituents of SGDP | |||||||
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | 2009-10 | 2010-11 | 2011-12 | |
| GSDP (2004-05 Prices) | 0.17 | 15.69 | 5.72 | 12.16 | 7.09 | 11.29 | 13.26 |
| Agriculture and Allied | -5.61 | 22.34 | -6.39 | 10.20 | -7.76 | 9.08 | 15.67 |
| Agriculture | -6.64 | 27.51 | -7.48 | 11.71 | -8.66 | 10.89 | 17.16 |
| Industry | 9.65 | 16.16 | 19.48 | 15.84 | 14.11 | 17.01 | 18.27 |
| Mining and Quarrying | 66.24 | -17.14 | -1.72 | 121.05 | -26.98 | 15.22 | 0.00 |
| Manufacturing | -6.24 | 6.41 | 24.70 | 19.95 | -4.04 | 8.52 | 8.95 |
| Services | 1.12 | 11.97 | 8.95 | 12.02 | 12.26 | 14.45 | 16.59 |
If we split up growth rates across sectors – agriculture and industry; we find that not only has Bihar demonstrated the fastest agricultural growth in the country, it also managed to reverse its industrial fortunes!
Bihar’s average agricultural growth rate over the period 2004-09 was 8.1%, the highest in the country. Bihar was closely followed by Gujarat, with a figure of 7.4%. The corresponding figures for Orissa, Rajasthan and Madhya Pradesh were 2.9%, 1.1% and 0.8% respectively. Even though the average growth rates over the 5-year period masks wide yearly fluctuations, the figure of 8.1% is quite high.
In Industry too there was a huge jump in the last 5 years. Although rest states fared better than Bihar, still the industrial growth of Bihar is phenomenal given that it had hardly any industries to start with!
In the next part we will ask the very important question that whether these phenomenal GSDP numbers have actually lead to betterment of Biharis? Stay tuned!
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